Learning from Our Peer Cities Regarding Growth—By Katy Brooks

Learning from Our Peer Cities Regarding Growth—By Katy Brooks

PublIshed on Oct 19, 2023

Bend is what economists call an “amenity rich” city. It’s a place where people love to visit and want to move, do business and work.

Even with Deschutes County’s population growth slowing from 3% annually to about 1%, the impacts of rapid growth over time have put infrastructure of sync with our population, including housing and the need for utilities, roads and schools.

Later this month, Megan Lawson, PhD, from Headwaters Economics, will keynote the Bend Chamber’s annual Impact Conference where businesses and community leaders will gather to talk about Bend’s growth. Lawson’s topic is how to address the needs of residents and visitors in amenity rich communities.

Much of her discussion will include insights from “The Amenity Trap,” a report by Headwaters Economics (headwaterseconomics.org) on how cities like Bend experience popularity of place and struggle to support a fast-growing local population.

The good news is that Bend is well ahead of many of its peer, amenity-rich cities. We have a diverse business and workforce base and have made public investments that have benefited residents.

But it takes much more to keep an economy and community healthy while experiencing significant population growth.

The Headwaters report delves into common themes for amenity rich communities, including rising housing costs, inadequate infrastructure, fiscal stability, and other issues that greatly impact local governments, businesses and residents.

Here in Central Oregon, the issue of rising housing costs is particularly challenging. Bend’s efforts to get ahead of the housing issue are varied, including building more densely, identifying incentives for construction of below-market housing, developing deed restricted property for the local workforce and advocating for additional buildable land.

These strategies align with recommendations in the Headwater report.

Lawson also notes in her report that these strategies can be effective but warns that they can be paradoxically resisted by locals who are reeling from growth impacts — something we have experienced in Bend.

Building also has hidden costs. Infrastructure investment is viewed by Lawson as a significant burden to cities trying to accommodate growth. Sewer, water, utilities, roads and other essentials are a financial weight and make commercial, industrial and residential development difficult especially in places like Bend, where it is more expensive to place underground utilities in rocky terrain.

To help lower and spread the burden of cost for infrastructure, the Headwaters report recommends planning holistically with other community goals like water and energy conservation. The report provided examples where reinvesting tourism taxes in infrastructure supported residents and businesses by sharing the cost. Cities have teamed up with visitor bureaus, parks services, transit agencies and local school districts to form collaborative operations to reduce costs and provide better infrastructure.

In Bend, the ability to fund infrastructure to support our growing community has additional challenges. In the early and mid-1990s, a series of ballot measures were passed to stem the increase of property taxes in Oregon. At that time, Bend had one of the lowest property tax millage rates (tax rate percentage per $1,000 assessed value of a home) in the state, and it has been frozen at a lower rate ever since.

As the population has increased, Bend’s tax rate hasn’t kept pace, affecting our ability to fund what is needed to accommodate our growth. This has forced the city to rely on other sources of revenue, including bond measures, and user fees like system development charges, construction permits, licenses and a potential new transportation utility fee.

The Headwaters report sees financial limitations like this in many amenity rich cities. While they identified examples of remedies from across the country, none was an easy fix, and most were often unpopular.

Cities can create new revenue streams generated by various visitor or gas taxes, increase taxing options for local governments and allow for more flexibility in tourism-generated tax to be diverted to support development of housing and infrastructure. They cited Visit Bend’s Sustainability Fund as an example of smart investment of tourist dollars into amenities that also benefit locals.

Bend has much more going for it than similar cities across the country, but we are well behind the curve of serving our population growth. That means we need to be strategic in maintaining a city that supports a diverse population and workforce. Learning from Lawson’s presentation of the Headwaters report findings later this month may help. The reality is that the longer we wait, the more difficult it will be to catch up, and the higher the price tag.

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