You can zone land for housing, approve development plans, and lower permitting fees, but none of it matters without water to the tap, sewer to the main, and a road to reach the lot. Bend is maintaining aging water and sewer systems, extending service to growth areas, and planning for a population state forecasts say will need 34,000 more housing units over the next 20 years.
Water Infrastructure
Bend's water system serves a growing city in a high-desert climate where water supply is not unlimited. The city draws from a combination of groundwater wells and the Deschutes River, and managing supply to meet increasing demand while respecting environmental flows is an ongoing challenge.
The Second Street Waterline project is a current example of the investment required. This project replaces aging water infrastructure in one of Bend's older areas, where pipes that have been in the ground for decades are approaching the end of their useful life. Aging water mains that go unreplaced break, causing service interruptions and water loss the system cannot absorb.
For new development, water availability is increasingly a gating factor. Extending water service to new growth areas requires main extensions, pressure zone management, and often new storage capacity. The cost of this extension is captured in System Development Charges, but the timing depends on the city's capital improvement program priorities.
Sewer Capacity
Sewer infrastructure follows a similar pattern: maintain existing capacity while extending service to new development. Bend's wastewater treatment capacity has been expanded in recent years, but collection system capacity, the pipes that carry wastewater from homes to the treatment plant, varies significantly across the city.
Some older areas have undersized sewer mains that were designed for lower density. As middle housing and increased density arrive through HB 2001 and ADU development, these systems may need upgrades to handle increased flows. Areas planned for new development, like Caldera Ranch, require entirely new collection systems designed from scratch.
For properties in unincorporated areas outside city sewer service, septic systems are the alternative. Septic permitting adds both time and cost to development, and not every property's soil and lot size can support a system that meets current standards.
Transportation
Bend's transportation system is car-dependent, with limited public transit, an incomplete bicycle network, and road capacity that struggles during peak hours.
The Transportation System Plan (TSP), which plans through 2040, identifies needed improvements across the road network. Current and planned projects include:
The Hawthorne Connections Study examines how to improve connectivity in the Hawthorne Avenue corridor, one of Bend's busiest east-west routes. Better connectivity in this area could relieve pressure on parallel routes and improve access to commercial and residential areas.
The Midtown Crossings Project focuses on Franklin Avenue improvements, including bike lanes and separated sidewalks. This project reflects the city's broader goal of creating safe, comfortable alternatives to driving for trips within the urban core.
Transportation infrastructure directly affects housing development. Areas with good road access and connectivity are more attractive for development and command higher property values. Areas with poor connectivity or traffic congestion face both market resistance and practical limitations on development capacity.
How Infrastructure Shapes Where Development Happens
There's a simple rule in development: housing follows infrastructure. Developers build where water, sewer, and roads already exist or can be extended economically. This creates a predictable pattern:
- Infill development (building on vacant or underutilized lots within developed areas) is attractive because infrastructure already exists. The cost of connecting to water, sewer, and roads is relatively low.
- Edge development (building at the city's perimeter, within the UGB) requires infrastructure extension. The cost depends on how far services need to be extended and what capacity is available.
- UGB expansion areas require entirely new infrastructure. This is the most expensive scenario and often takes the longest because new mains, roads, and treatment capacity must be designed and built.
The city encourages infill and density within existing areas through policies like middle housing and ADU allowances. Building on served land costs less and moves faster than extending infrastructure to new areas.
Impact on Home Values
Infrastructure quality and availability affect property values in ways that aren't always obvious:
Properties with reliable city services (water, sewer, paved roads) are generally worth more than comparable properties on well and septic with private roads. The reliability and maintenance responsibility differences are significant.
Areas targeted for infrastructure investment often see value appreciation. When the city announces road improvements, water main upgrades, or new park facilities, nearby properties tend to benefit.
Areas with infrastructure constraints may see suppressed development and slower value growth. If sewer capacity limits new construction in an area, reduced supply can support existing home values, but the lack of neighborhood investment can offset that effect.
The Funding Challenge
Infrastructure is expensive, and funding it for a rapidly growing city is a persistent challenge. The primary funding tools include:
- System Development Charges on new development (recently reformed to a tiered system)
- Utility rates paid by existing customers for water and sewer operations and maintenance
- Transportation bonds approved by voters for major road projects
- State and federal grants for specific projects
- Developer contributions for infrastructure improvements required as conditions of development approval
Each funding source has limitations. SDCs only generate revenue when new development occurs. Utility rates are limited by what ratepayers can afford. Bonds require voter approval. Grants are competitive and project-specific. The gap between infrastructure needs and available funding is an ongoing tension in Bend's budgeting process.
What Buyers and Homeowners Should Do
When evaluating a home purchase in Central Oregon, consider the infrastructure context. Ask about water source (city or well), sewer connection (city or septic), road maintenance responsibility (public or private), and any planned infrastructure projects in the area. These factors affect both livability and long-term property value.
For homeowners, stay informed about capital improvement plans in your area. The city publishes its capital improvement program, which identifies planned infrastructure projects and their timelines. Infrastructure investments near your property generally benefit your home's value.
Our housing market reports include context on infrastructure developments affecting different parts of Central Oregon. Our team can help you evaluate specific properties with infrastructure considerations in mind.