City defers builders' fees to encourage building.

Byline: Andrea Damewood The Register-Guard

SPRINGFIELD - In an attempt to tackle the housing slowdown locally, the city has taken the unusual step of telling home builders to "build now, pay later."

The City Council unanimously agreed this week to temporarily defer all of the city's planning, building and systems development charges for home builders until they find a buyer and secure a final occupancy permit.

Upfront costs for builders can be anywhere from $4,000 in city fees for a $130,000 home to $8,700 for a $370,000 home. In a tight economy, that extra cash flow could inspire builders to get to work in Springfield, Development Services Coordinator Bill Grile said.

Though city finances are also tight, seeing some money later is better than having no development now, he said.

"One hundred percent of nothing is still nothing," Grile said. "Unless we get some development applications, we're not getting anything."

Grile noted that the city typically sees about 250 new houses a year, but recently planners have only been receiving about a half-dozen permit applications each month.

Grile said the program - put together by city staff in just two months - will serve as a good experiment on what cities can do to get things moving on their own.

"I think Springfield is putting down a new path here, and I feel really good about that," he told the City Council.

Local builders said they were surprised and pleased that Springfield moved to help them during what one builder said is the worst slowdown for the industry since the recession in the 1980s.

"I didn't know something could move that quickly in a city," said Ed McMahon, executive vice president of the Home Builders Association of Lane County. "That tells me that city staff is willing to carry part of the burden, too."

Putting off the fees will ease the pressure on builders who won't have to pay interest during construction, McMahon said.

The deferral of city fees doesn't come without strings attached: The city, for example, will retain a lien on a property until builders pay their fees.

The council also agreed to have further discussion before going through with a long-planned raise in the city's transportation systems development charge.

The deferral program is meant to inspire contractors to get to work fast - the chance to apply for a deferral expires Oct. 15.

Builders are allowed a maximum of six total deferrals and they can only be used for single-family or duplex housing.

McMahon said that, should Springfield's pilot program work out, each of the 14 chapters of the Home Builders Association in Oregon is likely to bring a similar model to their local governments.

"I hope it is a model for other communities, including Eugene," McMahon said.

The Willamalane Park and Recreation District also will discuss deferring its building-related fees at its next meeting, McMahon said. As the city program develops, McMahon said he hopes to ask the Springfield Utility Board, Metropolitan Wastewater Management Commission, the city of Eugene and Lane County to consider taking similar actions.

"I feel like everybody should pick up a piece of this burden and carry it through the down economy," McMahon said.