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City Moves Forward with SDC Exemptions for Affordable Housing 

Side Notes 8/12-8/19

At its August 5 meeting, Bend City Council voted to move forward with an incentive plan aimed at encouraging the development of more affordable housing units. In its second and final vote, Council approved an ordinance that will waive some system development charges—the fees that help pay for infrastructure costs associated with new developments—for affordable housing projects meeting specific criteria.

As noted in the ordinance's findings, "The high demand and limited supply for housing in Bend has led to an increase in the cost of housing for both owner-occupied and rental units. Most new housing being developed is affordable only for those with above-median income."

For the construction of one single family home, the City says total City SDCs for transportation, sewer, and water add up to more than $12,000. Bend Park and Recreation District also collects SDCs for parks, but has declined to offer similar incentives.

The ordinance allows developments that receive local, state, or federal funds meant for affordable housing to be exempt from 100 percent of water and sewer SDCs and 75 percent of transportation SDCs. Eligible projects would likely include rental housing that is affordable for households making 60 percent or less of the area median income (AMI), owner-occupied or lease-to-purchase housing for households making 80 percent or less of the AMI, and homeless shelter developments.

In order to qualify for an exemption, developers will have to submit an application. If the total annual exemption requests exceed $1 million, priority will be given to projects meeting certain additional criteria, including but not limited to: utilization of outside funds and services, partnerships with other organizations and agencies, proximity to transit corridors, and provisions to increase public transit options.

If the property that receives the exemption ceases to be affordable housing within the first five years, the developer will be required to pay back the exempted SDCs, plus interest.

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