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Street fees could stunt new housing By Jessica Smith Proposed increases in development charges would mean better roads in Medford, but critics say street upgrades likely will come at the expense of another city priority: affordable housing. "We need the money to be able to take care of the city�s transportation projects," said Jerry Nordahl, a local appraiser and real estate broker. "But what this does is put the skids on development. No one will be selling land and no one will be buying." Fees would be state�s 2nd highest Here�s how Medford�s new system development fees would, if approved, stack up against other Oregon cities: Medford (including proposed increases) Single-family home: $6,362 20,000-square-foot office building: $108,733 60-unit apartment complex: $230,816 Eugene Single-family home: $4,698 20,000-square-foot office building: $58,286 60-unit apartment complex: $162,435 Bend Single-family home: $4,608 20,000-square-foot office building: $52,504 60-unit apartment complex: $187,720 Portland Single-family home: $4,222 20,000-square-foot office building: $100,111 60-unit apartment complex: $140,943 Salem Single-family home: $7,487 20,000-square-foot office building: $59,119 60-unit apartment complex: $242,517 According to Nordahl and others, a proposed 120 percent increase in city fees charged to housing projects could stunt growth in the affordable-home market by driving costs up for developers. The proposed new fees will be used for Medford�s most-needed road improvements, from overhauling the south Interstate 5 interchange to rebuilding the bumpy intersection at Crater Lake Avenue and McAndrews Road, one of 13 high-priority but as-yet unfunded road projects the city has identified. Medford�s City Council will take up the issue at a meeting at 7 p.m. Thursday at City Hall. Opponents of the fee increase contend that developers who want to maintain their profit margin likely will build in surrounding cities, where costs are less. That would leave only the most pricey homes in Medford, they argue. Rising housing costs could slow development, Medford city officials concede, but they say costs could climb even higher if the city doesn�t do something to improve roads and relieve congestion. If the city doesn�t take care of its roads, it can�t meet growing traffic demands and it can�t amend zoning laws to allow for increased growth, said Cory Crebbin, director of public works. "That just constricts the supply of land which causes lot prices to go up. That hurts developers and affordable housing," he added. "It�s a two-headed beast and you�ve got to find a balance between the two." City officials say they�ve found the right balance � street-development fees will be increased along with street utility fees, paid monthly by Medford households. If approved by the council, beginning Oct. 9 the city would more than double the street fee and charge an extra $1,630 for each new house. Likewise, the street utility fee will jump from less than $3 a month to about $5.50. City leaders already approved increases to fees charged for acquiring new parks. Beginning in October, the fee for parks system development will jump from $592 for a single-family home to $1,086. Increases in the parks and street fees, combined with other system charges, will bring the total city charges for a single family home to $6,362, about 33 percent more than is now charged. The costs would be more for multiple-unit and commercial developments. Joe Suste, a local real estate agent who is building a set of duplexes, said the street-fee increases alone mean another $16,000 tacked onto the cost of his project. He didn�t realize the city was increasing the fees when he purchased the land for his project, he said. "That�s $16,000 I don�t have," Suste lamented. "I�ve got to go get that money from someplace. I need to find it." Crebbin said he empathizes with developers facing bigger bills, but the statewide defeat of the proposed gas tax increase in May left city leaders little choice. "We can�t just pretend that our transportation problems don�t exist because we didn�t get the gas-tax increase," Crebbin said. No one at City Hall wants to put the road work off and fee increases are the best way to pay for it, he explained. Most of the increase in the street fee would go to pay for the overhaul of the south Medford freeway interchange. A $1,000-per-unit surcharge will pay for both the $5 million contributions agreed to by the city and the private sector in a deal with the state to get the interchange project done despite its current lack of funding and its low-priority spot on the state�s road project plan. As part of the agreement, the state would come up with the remaining $5 million for the $15 million project. The $1,000 interchange-overhaul surcharge would disappear in seven or eight years, when enough money has been raised to meet the city�s and the private sector�s commitments, city officials say. Likewise, a substantial portion of the remaining street-fee increase will be retired in 15 years, when the city expects to finish paying off the loans that will fund the 13 major street projects. Questions about the fee increases and their impacts on development can be directed to the city public works department at 774-2100. 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