Council advances temporary SDC exemption to spur housing; reportback and monitoring requirements added

Portland City Council on June 25 moved forward on first reading an ordinance that would temporarily exempt many residential housing projects from system development charges (SDCs), a measure sponsors said is designed to reduce costs that currently prevent stalled housing projects from proceeding. The ordinance was heard in the Finance Committee on June 16 and referred with a recommendation to pass.

Council adopted a friendly amendment requiring the Community and Economic Development Service Area to provide written implementation reports every six months during the SDC waiver period; an alternative amendment that would have required the mayor to return to council if foregone revenue reached $63 million failed in a roll‑call vote. The council’s action advances the ordinance to a second reading; the ordinance was not finally adopted on June 25.

The proposed change would add a temporary exemption to Portland City Code 17.140.07 for new dwelling units and certain congregate living facilities, subject to restrictions: a building permit must not have been issued before the ordinance’s effective date and must be issued on or before a specified date in 2028. Committee language made the effective date and other timing details explicit to provide certainty to developers and lenders.

Supporters — including developers and housing advocates — argued that SDCs can add $15,000–$35,000 per unit (depending on project type) and that the exemption will help projects that are financially stalled become feasible, increase housing production and retain construction jobs in Portland. Sarah Zahn, managing director of development for a regional developer and president of Oregon Smart Growth, told council that developers need "certainty" that a waiver will be in effect through permit issuance; without that certainty, she said, projects cannot underwrite financing.

Opponents — including parks and infrastructure advocates and some community members — cautioned that SDCs fund critical infrastructure and parks, and that foregone SDC revenue could require reprioritization of projects or higher future rates. Bill Crawford, who represents Portland parks interests, said the parks bureau would see reduced SDC revenue and warned that if new units do not materialize as predicted the city could face funding gaps for planned projects.

Council discussion focused on tradeoffs between accelerating housing production and preserving revenue for infrastructure. Several councilors stressed the need for metrics and regular reporting so the city can assess whether the waiver is producing the intended housing units and avoid long‑term revenue shortfalls. Councilor Murillo’s amendment for six‑month written reports was adopted; Councilor Avalos’s amendment to cap foregone revenue at $63 million and require mayoral reauthorization if that threshold were reached was defeated.

Staff said the $63 million figure in some communications represented the forecasted SDC revenue that would not be collected under conservative assumptions for development the city expected to happen anyway; staff cautioned that additional foregone revenue would occur if the waiver induces additional development beyond that baseline. City staff also told council they will track impacts to specific bureau projects and return to council with details when relevant.

Ending: The ordinance will return for second reading with an adopted monitoring requirement; council postponed a final vote to allocate SDC policy decisions while staff track production data and report back on outcomes and impacts.