Bend Considers Changes to System Development Charges

The City of Bend is proposing changes to the fees it charges developers for adding new buildings. The methodology and code updates would lower fees for some while increasing fees for others, based on factors such as house size and building types.

SDCs help pay for growth-related infrastructure through development. The fees help cover the cost of new transportation, sewer and water systems.

The City proposed these updates to enhance transparency, recover growth costs and align with Council priorities, such as housing production, housing affordability and complete communities.

According to Sarah Hutson, senior management analyst for the City of Bend, these charges are overdue for an update. “What often precipitates a methodology update is infrastructure master plan updates,” said Hutson. The recently updated water and transportation master plans prompted changes to SDCs, to stay in line with the City’s goals.

This update would change how residential SDCs are calculated, basing fees on the size of a home. For housing, fees are currently the same across the board at $21,760. The update would create a tiered system, charging people with smaller homes lower rates and those with larger homes higher rates. With the new code, a house between 600 and 1200 square feet would incur $16,139 in SDCs. For a home larger than 3,000 square feet, the charges would increase to $31,080.

“By scaling it, we think that there will be alignment with Council’s priorities around housing production and affordability, because less of that cost gets passed on to the consumer,” said Hutson.

The updates would give affordable housing developments a complete exemption from water, sewer and transportation SDCs. They would also encourage denser, less car-dependent buildings by offering a 30% lower transportation SDC for these types of properties in the core part of the city. Hutson added that this update, the urban rate area, wouldn’t increase rates outside of that area.

City leaders hope to streamline fees for commercial properties. With the current SDC system, commercial buildings are assigned fees based on where they fall in 60 different categories, determined by the building usage. The proposed changes would lower the number of categories and keep the fees consistent for water, sewer and transportation charges in all categories.

The proposed changes mean certain types of development might see higher SDCs while some might see lower. “Everything is based on data. We’re consistently looking at it across the board and using the best data that we have available,” said Hutson. “In doing so, because it had been a while since we last updated these SDCs, you’re going to see some changes as a result.”

Following the Dec. 6 work session, the City will hold a public hearing on SDC changes on Jan. 17 and is set to implement the new fee schedule on July 1.

“We realized it’s a pretty cumbersome system, so we’re making an effort to make it easier for folks and reduce some of that complexity and that administrative burden on both sides,” said Hutson.