Portland’s Temporary Housing SDC Exemption Program
The City of Portland’s temporary System Development Charge (SDC) exemption program, effective for building permits issued from August 15, 2025, through September 30, 2028, exempts most new residential dwelling units and congregate living facilities from SDCs. These one-time fees fund infrastructure expansions for sewer, water, parks, and transportation to accommodate growth.
The program targets the production of approximately 5,000 new housing units by reducing upfront development costs often cited as barriers by builders. Eligible projects encompass new construction, additions creating units, and conversions of non-residential space to housing. Accessory dwelling units, caretaker quarters, and transient lodging remain ineligible, following separate programs.
No separate application is needed—developers acknowledge terms during the permitting process. To retain the exemption, projects must meet milestones, such as an approved foundation inspection within 12 months of permit issuance, unless supported by a financial guarantee.
City projections estimate $63 million in foregone revenue over the three-year period, broken down as $27 million for parks, $22 million for sewer and stormwater, $10 million for transportation, and $4 million for water. Average per-unit SDCs exceed $20,000 (ranging from about $15,000 in multifamily to $35,000 for single-family), representing 3–8% of total project costs in many cases.
Early activity shows interest: As of late September 2025, the Home Builders Association of Greater Portland reported over 950 requests for new construction under the program, with a majority for single-family homes and the largest a 150-unit multifamily project.
While the waiver aims to stimulate market-rate and mixed projects without affordability mandates, it has raised concerns about delayed infrastructure improvements. Waiving transportation SDCs—estimated at $10 million—has prompted concerns over delayed active transportation and transit improvements, particularly as regional providers like TriMet face service reductions amid funding shortfalls. As economist Thomas Sowell observed, “There are no solutions, only trade-offs”—a reminder that policies like this one involve balancing housing production goals against long-term public infrastructure priorities.
Appraisal Implications
Residential Properties
For appraisers valuing proposed or under-construction single-family and attached homes in Portland, this temporary relief reduces replacement costs in the cost approach, potentially supporting higher land values or improved feasibility in submarkets where margins are tight. Savings may offset other expenses rather than directly translating to lower sale prices.
Lenders, REALTORS, and investors should track permitting trends, as accelerated timelines could increase near-term inventory pipelines.
Multifamily Properties
Scaled savings prove substantial for apartment and mixed-use developments—a $20,000+ per-unit reduction on a 100-unit project exceeds $2 million—bolstering internal rates of return and highest-and-best-use analyses that favor residential redevelopment.
Market Context
New construction comprises a small share of regional sales, heightening the potential impact of fee relief on supply. As detailed in the Portland region’s Q3 2025 market update, new detached single-family sales fell 25% regionally year-over-year, with Multnomah County experiencing a steeper 48% decline amid builder caution over costs and financing.
This program directly targets those barriers, complementing ongoing efforts to address low production levels seen in recent years.
Sources & Further Reading
- Temporary SDC exemptions for new housing units (2025–2028): Official program overview
- Passed ordinance 192082 and fiscal analysis: Revenue impact, per-unit savings, and projected units
- Home Builders Association update (September 2025): Early program requests and project types
- Infrastructure funding concerns with SDC waiver: Transportation and neighborhood impacts
- The Portland Region Q3 2025 Market Update: PortlandAppraisalBlog
- TriMet Begins Targeted Evening Bus Service Reductions: PortlandAppraisalBlog
Thanks for reading—I hope you found a useful insight or an unexpected nugget along the way. If you enjoyed the post, please consider subscribing for future updates.
CODA
Are you an agent in Portland and wonder why appraisers always do “x”?
A homeowner with questions about appraiser methodology?
If so, feel free to reach out—I enjoy connecting with market participants across Portland and the surrounding counties, and am always happy to help where I can.
And if you’re in need of appraisal services in Portland or anywhere in the Portland Region, we’d be glad to assist.
Portland Appraisal Blog 