New Housing May Fund Schools

STEVE LAW
Statesman Journal
March 25, 2007
The llamas and filbert trees are gone near West Salem High School, to be replaced by 700 new homes.
Lisa Nair scans those buildable lots in her neighborhood and worries what they portend for her daughter's school. "You see these homes going in, and there's no school being built to provide classrooms for these kids," she said.
Nair and other West Salem parents have one remedy: put a fee on every new home going in.
Salem and other cities and counties across Oregon levy "system development charges" on new homes and other construction to pay for roads, parks, sewers and water systems that serve the new homes. But state law bans local governments from charging development fees for schools, in part because of the lobbying clout of the home-building industry.
In high-growth areas such as West Salem and South Salem, many residents think that's unfair, especially as they see droves of newcomers cause crowding in neighborhood schools.
Senate Bill 366, introduced this session and referred to the Finance and Revenue Committee, would allow school districts to set an impact fee, or system development charge, on new homes or lots. It does not require that fees be set or say how much they would be.
It's crucial to site schools close to where students live, said Heitsch, a co-leader of the school district's Facilities Task Force. More parents can attend teacher conferences. Students can attend after-school activities and devote more time to homework instead of riding buses. The school becomes a stronger center of community life.
Development fees could give school districts the financial means to set aside land, rather than wait for voters to OK a bond measure, Heitsch said.
Senate Bill 366 would require that development fees be spent only to meet the demands of new growth. The money could not be spent merely to replace an aging facility.
Homebuilders and allied industry groups have long opposed school development fees because they raise the price of a new house or cut into their profits.
Salem already charges nearly $12,000 per house for development fees. So far this year, the average West Salem home is selling for $293,550, according to the Willamette Valley Multiple Listing Service. In South Salem, it's $323,339.
Homebuilders are quick to point out that development fees would cover only about 25 percent of the cost of a new school, by some estimates. And some school officials worry that voters will be less prone to support school bond measures if there are school development fees, figuring that those should cover the costs.
Bond measures are the traditional way that school districts pay for new classrooms, but they've gotten much tougher to pass in elections since Oregon voters approved the Measure 47 property tax initiative in 1996.
Eleven other states allow development fees for schools, and eight other states have an alternative mechanism, Hepper said. The group senses that the time is ripe to erase Oregon's ban on school development fees, with so many bond measures going down and Democrats back in control of the Legislature.
Berger said local communities should "step up" and pay for school construction, rather than trying to raise the price of homes by tacking on more development fees. Loosening the double-majority requirement will enable local taxpayers to do more of their share, she said.
Although legislative committees have begun hearings on development fees, the real action is going on behind the scenes in negotiations with homebuilders, Stand for Children and other forces.
Hepper argues that development fees could help the housing industry and parents.
"The benefit for both," he said, "is you buy a house and sell a house in a school district that has good schools."
slaw@StatesmanJournal.com or (503) 399-6615