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Council weighs affordable‑housing SDC exemptions, consultant warns to backfill lost revenue
Summary
Consultants told Astoria council that waiving SDCs for affordable housing without external backfill risks shifting costs and legal challenge; councilors asked staff to draft a formal program tied to funding sources such as a construction excise tax or general fund.
John Guillerducci of FCS explained that while some cities grant SDC exemptions or discounts for affordable housing, the law requires fees to be proportionate to impact and courts have struck down disproportionate impact fees.
"If you start granting exemptions because they are affordable housing... you are breaking that proportionate share potentially breaking that proportionate share requirement," Guillerducci said, cautioning that exempting customers without backfill could require other payers to absorb the cost. He pointed to ORS provisions that specifically authorize certain waivers for large multifamily projects and a companion option to use a construction excise tax to replace lost SDC revenue.
Councilors repeatedly asked for clear options to support small local affordable projects as well as larger multifamily developments. Councilor Adams said she supports the ordinance changes "but at the same time, I very much support formalizing a specific program" to encourage affordable housing while ensuring any relief is backfilled. Several councilors asked staff to return with program language and funding options (fund 140 was mentioned as a possible local source to seed assistance).
Consultant and staff offered examples other jurisdictions use to backfill waivers — general fund transfers, voluntary utility contributions, construction excise taxes — and recommended the city identify a consistent, transparent backfill source if it adopts targeted exemptions.
