Bend’s population isn’t expected to clear 100,000 for another decade, but if you count couch surfers, second-home owners and hotel guests, it’s already done just that.

During the summers of 2012 and 2013, Bend averaged 18,000 visitors a day, according to research commissioned by Visit Bend. Meanwhile, the U.S. Census Bureau estimated the city’s full-time population to be 81,236 in 2013. Combined with projected residential population growth and expectations of a strong tourism season, it’s likely Bend’s feet-on-the-ground population will clear 100,000 on quite a few days this summer, as it likely did last summer, too.

While lines may seem especially long and bar stools dreadfully scarce during the river-floating season, the city’s full-time plus visitor population rarely falls below 93,000, as the number of average daily visitors reaches a low of just 12,000 in the winter.

“Bend’s tourism industry has had four consecutive record summers, so there is clearly strong momentum in the industry,” said Doug LaPlaca, president and CEO of Visit Bend. “It’s impossible to know when an extended run like this will end, but with the extraordinary and historic summer lineup at the Les Schwab Amphitheater, I’m predicting another record summer.”

Bend City Manager Eric King said the city’s bloated summer population is felt most directly by the police and fire departments, which see an increase in calls for service. Thanks to the city’s transient room tax, which charges guests staying in hotels, bed and breakfasts and other accommodations, some of the visitors who come through Bend help to pay for these services.

About 85 percent of the city’s general fund is spent on emergency services. Annually, property taxes, paid directly by owners and indirectly by renters, generally contributes around $25 million to the fund, while the room tax generates about $4 million.

“The contribution from the transient room tax is actually close to being proportional,” King said, referencing the fact that during the summer, about one-fifth of the city’s population is made up of visitors.

Another area visitors impact, and where the toll of endless SUV tires is visibly felt, is the roads, which city officials say are in poor condition. The City Council is considering proposing a gas tax of 5 cents per gallon, something that both visitors and full-time residents would pay. Based on revenue generated by other Oregon cities, a gas tax could contribute about $2.5 million a year. In total, the value of deferred road maintenance is estimated by the city to be $80 million.

“There’s a significant impact on our roads from the numbers of people coming through,” King said. “A gas tax would be one way for those visiting to pay their fair share.”

Currently, a majority of visitors don’t pay the transient room tax. According to Visit Bend, of all the days spent by tourists in Bend, only 28 percent involve a hotel stay. Seven percent come from people who don’t stay the night, while 65 percent fall into an “other” category, which LaPlaca said could encompass anything from second-home owners to those sleeping on a friend’s floor. While it’s hard to estimate, LaPlaca said there’s room for about 25,000 to stay in Bend on any given night.

Despite the size of the visiting population, the city’s planning staff doesn’t directly consider tourists during discussions about how to shape the city. However, city of Bend Planning Manager Brian Rankin said related issues come up all the time.

“One of the best examples is the vacation rental debate,” Rankin said, referencing recent changes to the city’s land use code that restrict the placement of rentals. “Ten years ago, you couldn’t do this, but with better technology, you can Google ‘Bend’ and find a place on VRBO. We’re, as a city, evolving to meet these changes.”

Rankin said when planners end up addressing the city’s waxing tourism market “the issues come under the lens of livability.” At the same time, he pointed out that “the reason Bend has such a vibrant downtown” is because the economy is sized to fit the constant presence of tourists.

“The question becomes, ‘How do we strike the right balance?’ And what the City Council is doing is focusing on both livability and economic development,” Rankin said. “It’s interesting to see, because on one hand, you’re looking to manage and (mitigate) the impact from visitors, and with economic development, the goal is to create more middle-class jobs that may not be created in a tourism-only economy. The idea is to work on both at the same time.”

— Reporter: 541-633-2160, tleeds@bendbulletin.com

The last time Bend expanded its urban growth boundary, Phil Donahue was still a popular talk-show host, AIDS was a new term and Brian Fratzke was a freshman in high school.

The year was 1981, Fratzke said Wednesday during the Bend Chamber Real Estate Forecast Breakfast, which drew about 400 attendees to the Riverhouse Convention Center. Now a commercial real estate broker and principal at Fratzke Commercial Real Estate Advisors, Fratzke and four other panelists explained why the long process to bring more territory into the city of Bend is driving up the cost of residential and commercial real estate.

“Here’s why you should care,” he said. “How many of you have a business where you pay rent, you pay a lease, you own a building?” Lease rates for industrial space, for example, have nearly doubled in Bend in three years as the available space has shrunk from 1.9 million square feet to 288,000 square feet, a decline in vacancy rates from 38 percent to 5.76 percent, Fratzke said.

“Back in 2012, if you wanted to lease some industrial space you’d pay 35 cents per (square) foot per month. That’s your base rent. It’s almost doubled,” he said. “And we have some buildings that are listed as high as 80 and 90 cents a foot in town right now.”

The city in 2009 proposed bringing another 8,400 acres within its limits, a plan the state Land Conservation and Development Commission returned with a remand order, “like a teacher grading your very, very complex paper,” said panelist Brian Rankin, Bend city planning manager. Bend City Council is on track to address the state critiques in a new plan by June 2016, with possible state adoption by June 2017, he said. City elected officials, City Hall staffers and citizen volunteers have worked together, some on technical advisory committees, to revise the plan.

“This is not a complete do-over,” Rankin said. “We’re keeping elements the state approved and then we’re working on the things they told us to improve.”

With land in short supply and demand for homes in Bend increasing, the cost of housing is also increasing beyond the average worker’s ability to pay, said panelist Bill Duffey, vice president of land development for Hayden Homes. System development charges, the fees imposed on developers by the city and the Bend Park & Recreation District, add another 2 percent to 10 percent to costs, depending on the type of construction, said panelist Ron Ross, a broker with Compass Commercial Real Estate Services.

Duffey calculated that entry-level homebuyers in Bend are earning about $76,000 annually, or about $20,000 more than the median income in Bend, which he pegged at about $56,000.

“That space (between the two incomes) is a market that we’re really having a hard time trying to serve right now,” Duffey said.

Even if the state approves the revised city plan for expansion, three to five years will pass before it affords any relief to builders, employers and homebuyers who must shoulder the cost of a tight real-estate market, the panelists said. Fratzke suggested several moves they all could make in the meantime.

Commercial tenants may want to talk with their landlords about renewing their leases at affordable rates; tenants who can afford to do so might consider purchasing their own property, he said.

Developers should look for opportunities to redevelop existing properties while keeping an eye on lease rates to know when they warrant new construction, Fratzke said.

Citizens should get involved by making their opinions known to the City Council and state Land Conservation and Development Commission and Land Use Board of Appeals, he said.

“Bend’s gonna continue to grow. This is the greatest city in America,” Fratzke said. “People are going to keep moving and demand’s going to outstrip supply. So let’s keep on top of it.”

— Reporter: 541-617-7815,

WASHINGTON — The poshest of luxury homes are acquiring the cachet of a masterwork by Picasso or Matisse.

Rather than settle for garages of antique cars or a museum’s worth of paintings, billionaires are increasingly willing to pay $100 million for homes that can serve as showcases for their fortunes, according to an analysis issued Thursday by Christie’s International Real Estate.

“It tells you that there is a new class of collectible — they’re trophies now,” Dan Conn, CEO of Christie’s real estate brokerage, said of the most lavish homes being acquired.

The luxury housing market has shifted in the past year as the dollar has strengthened. Sales in Manhattan, Los Angeles, San Francisco, London and other global hubs are stabilizing after having rocketed in 2013, when many buyers cashed in on stock market gains. Now, multimillionaires and billionaires are seeking estates overseas and at resort destinations, the report said.

The dollar has appreciated 20 percent against the euro in the past year, making pied-a-terres in Paris and wineries in Bourdeaux more affordable for wealthy Americans. Sales are also surging by averages of more than 20 percent along the beaches of Turks & Caicos and the slopes of Telluride, Colorado.

Five homes sold around the world for more than $100 million in 2014, and a record 18 were listed for sale at that level, according to the Christie’s report. Last year’s purchases include a $146 million French Riviera mansion. Each square foot of the home cost $22,577 — roughly equivalent to a new Honda Accord.

This is the new top tier for billionaires scouring the globe for signature homes, a market that Conn said should continue to prosper because the world minted 200 new billionaires from 2013 to 2014.

“You’ve got this club of billionaires who just like to have unique assets,” Conn said. “But it’s also, truthfully, that they like to entertain their friends and say, ‘This is mine.’”

The luxury market contrasts with the still-struggling U.S. real estate market as a whole. Millions of homeowners still owe more on their mortgages than their homes are worth — a vestige of the housing crash that triggered the Great Recession in late 2007. Buyers remain sensitive to changes in mortgage rates and price swings that could make ownership costlier. At the same time, access to credit remains tight for some. Sales have been running below a pace associated with healthy markets.

“There’s a deeper cultural shift where people aren’t willing to get a house at any cost,” said Glenn Kelman, CEO of the brokerage Redfin.

Existing homes sold at an annual pace of 5.19 million in March, a sharp increase after a brutal winter curtailed buying in the Northeast, the National Association of Realtors said last week.

Hayden Homes is prepping nearly 22 acres in southeast Bend for an 85-home subdivision the company expects to begin marketing this summer.

The project, called Deer Ridge, will feature homes priced for first-time homeowners, said Geoff Harris, Hayden Homes regional director in Central Oregon. Homes will range from three-bedroom, two-bath units up tosix-bedroom, three-bath units. The site is along the west side of Brosterhous Road between Murphy and Knott roads.

“Primarily, our target is the price-conscious, value-driven homebuyer,” Harris said Tuesday. “There’s plenty of sparkle in NorthWest Crossing and Tetherow, and we don’t build homes in neighborhoods like that. That’s a very specific buyer with a lot of resources. Those homes aren’t affordable to people that make somewhere around median income, plus or minus.”

Median household income in the Bend Metropolitan Statistical Area in 2013 was $53,027, according to the U.S. Census Bureau. The Deer Ridge homes will range from about $250,000 to more than $300,000, Harris said. The median price for a single-family home in Bend reached $327,000 in March, according to the Beacon Appraisal Group.

Work began Monday to install a sewer line beneath Brosterhous Road that will connect the subdivision with the city sewer line at SE Marble Mountain Lane, said Chad Swindle, project manager for Taylor Northwest LLC, the contractor. Brosterhous will be closed for four weeks to through traffic between SW Marble Mountain and Windsor drives. Local traffic may access neighborhoods from Murphy and Knott roads, said Kyle Thomas, city of Bend construction and right of way manager.

Kim Ward LLC sold the site to Deer Ridge LLC in October for $2.125 million, according to records in the Deschutes County Clerk’s Office. However, Ward holds a trust deed as security on a $2.025 million loan to Deer Ridge Investment LLC. Hayden Watson is manager of both Hayden Homes and Deer Ridge Investments.

The development plan on file with the city indicates a five-phased plan with phase 1 scheduled for completion this year and the remainder each year until 2020. The property includes a city-designated Area of Special Interest, a forested area with rock outcroppings along the property’s eastern edge. Hayden may not develop that area, although the plan proposes a short, secondary access road through it, which is permitted in some cases.

Building the road would mean the loss of one juniper tree, according to the development plan. The access road is needed to complement the main access road because the property is long and narrow and bordered to the southeast and west by other properties, according to the plan. The Burlington Northern Santa Fe Railroad borders the property on the south.

Other developers have said recently that homes they built with first-time homebuyers in mind often went to retirees, downsizing baby boomers or investors, instead. Harris said he sees the market beginning to shift.

“Investors and cash buyers are a relatively small slice of the transactions we’re seeing right now,” he said. “We’re seeing (an) owner-occupied, … good, first-time homebuyer uptick this spring. It’s satisfying, honestly; that’s who we outwardly state we’re trying to serve.”

Hayden Homes builds in Oregon, Washington and Idaho. It has seven projects in Central Oregon, with another three to come in the next six months, Harris said.

— Reporter: 541-617-7815,

The State Land Board approved the sale Tuesday of a 36-acre Redmond subdivision with 63 ready-to-build lots to a Bend homebuilding company.

Under the deal, Palmer Homes will pay $3.33 million in phases over 18 months for the Forked Horn Butte development, which the state acquired in a 2009 property exchange.

Palmer, builders of Bend housing developments including Foxborough, Braebern and Stonehaven, gets half of the developed lots immediately, according to the Land Board agenda. Within 18 months, Palmer will get the remaining lots and 19 additional acres of undeveloped bare land.

The entire 36 acres was valued at $2.75 million in 2009, according to the Land Board information. The state took ownership of Forked Horn Butte in a property exchange with Giustina Resources, a private timberland owner based in Eugene.

Giustina received 620 acres of forestland in Lane County, and the state got the subdivision, which is east of SW Helmholtz Way and south of SW Yew Avenue, about a half-mile north of Ridgeview High School.

Forked Horn Butte sits on a west-facing slope with unobstructed views of the Cascades, according to a state description. It has paved streets, sidewalks, streetlights and prepared home lots on 17 acres.

The Department of State Lands began exploring a sale of the subdivision in June. But after getting two widely different appraisals on the property’s value, the state decided to solicit proposals on the best way to sell the property and held a community meeting in December in Redmond.

In the end, the state decided to accept two types of offers: full cash or phased purchase.

Two cash offers were submitted, one at the 2009 appraised value and the other at $2.21 million, according to the Land Board information. Two other phased-purchase offers were also received. One was at a lower price, and the other called for a seven-year purchase timeline, according to the information.

A development firm plans on building nine luxury condominiums on a half-acre lot in Bend overlooking the shops in the Old Mill District, with views of the Deschutes River and the Cascades.

Construction at the site, 291 SW Bluff Drive, could begin in the next month, said David Waldron, a partner with James T. Paul of Bigwater Ventures II LLC. Paul said Bigwater sold the property in the past month to another firm that was created to develop it, 291 Bluff Investments LLC.

The project, called The Atrium at the Old Mill, calls for six 2-bedroom and three 1-bedroom condos, and could be complete within nine months, Waldron said Wednesday. The units range from 1,000 square feet to 1,800 square feet, he said.

“We’re going to release four right now, three on the first level and a one-bedroom on the second level,” he said. “The one-bedroom will start at $500,000.”

Condominiums are not as popular with homebuyers as single-family homes, and they don’t appreciate as quickly, but for certain people they make sense as a home purchase, real estate brokers said.

“A lot of the reason for that is that people are looking to simplify their lives,” said broker Michelle Mills, of Re/Max Key Properties in Bend.

Downsizing baby boomers and young entrepreneurs looking for low-maintenance homes, a Bend lifestyle, or both, are interested in condos. Some buyers are looking for a primary home in Bend while maintaining a second home in a place like Costa Rica or Ecuador, she said.

Waldron said a young businesswoman from Florida has already reserved one of the Atrium units.

“We haven’t really put it out to the public, but we’re getting a lot of unsolicited interest,” he said.

Still, condominiums represent a fraction of the Bend real estate market, said Lynnea Miller, principal broker at Bend Premier Real Estate. She said the Multiple Listing Service shows 137 condominiums, of which 37 are active, 13 are pending and 87 have sold over the past year. Many are listings at Seventh Mountain Resort and Mount Bachelor Village. Some of those are fractional ownership vacation homes, and many are less than 1,000 square feet.

In The Plaza, a condominium building adjacent to the Atrium site, a 1,938-square-foot, 3-bedroom condo is listed for sale at $789,900.

“It definitely does fit a certain demographic,” Miller said.

Waldron said he designed the Atrium units with enclosed garages, climate control, energy efficiencies and sound insulation.

— Reporter: 541-617-7815, jditzler@bendbulletin.com