Portland's experiment with waiving development fees for new housing is getting results, but the city admits it isn't a cure-all.
On Oct. 6, the city's development review and public works bureaus gave the City Council a report on the first year of Portland's temporary exemption from system development charges, or SDCs, for new housing. According to the city's summary, permits for a total of 2,871 new housing units fell under the program as of Aug. 14, the end of its first year.
SDCs are fees charged on new development to help pay for the added load on the city's sewers, parks, water systems and streets. Anyone who has priced a project in Portland knows they can add up fast.
How the program works
In July 2025, the City Council adopted an ordinance that temporarily exempts most newly created housing units from SDCs, under certain conditions. The goal is 5,000 new homes in three years. The exemption applies to most permits for new housing units issued from Aug. 15, 2025, through Sept. 30, 2028.
There's a catch. To keep the exemption, a project has to meet eligibility rules and hit certain construction milestones within one year of the permit being issued.
The report sorts the 2,871 units into three groups:
- 1,687 units are "enrolled." These projects have building permits in process and have said they want the exemption, but their permits haven't been issued yet.
- 208 units have permits and applicants who want the exemption, but they don't yet qualify for it to be made permanent.
- 976 units have permits and have received SDC exemptions.
For contractors, that breakdown works like a map of the pipeline. The 976 exempt units are permitted jobs that need to keep moving to hold onto the waiver. The 1,687 enrolled units are still in permitting, which is usually when bids get priced and schedules get set.
If all 2,871 units get built, the first year alone would cover more than half of the 5,000-unit goal. If every one of them qualified, the city would give up more than $50.9 million in fee revenue.
What builders told the city
Portland Permitting & Development emailed 116 applicants and property owners in the program, including developers of larger multifamily projects, and got 45 responses. According to the city:
- For at least 68% of the respondents' projects, the exemption prevented delays or outright cancellations of permit applications.
- 80% rated the exemption as having a high or very high impact on moving projects forward. That was higher than market conditions (60%), zoning or other code issues (52%), interest rates (43%) and labor and materials costs (23%).
That said, the report is honest about the limits. Construction activity in Portland is still below pre-pandemic levels. The city points to local factors like stagnant job growth, modest income growth and downward pressure on rents from vacancies in existing buildings, plus regional and national factors like modest population growth, rising construction costs and higher interest rates.
The report acknowledges that the SDC exemption, "while meaningful, has not been enough to counter stronger forces such as construction costs and interest rates that impact the development of new housing in Portland," according to the city's summary.
The report was presented by Donnie Oliveira, the deputy city administrator for community and economic development, and Millicent Williams, the interim deputy city administrator for public works.
A presentation on the report is expected at a meeting of the City Council's Housing and Permitting Committee later this fall. The bureaus will keep tracking participation and report back to council every six months, as the ordinance requires.
Why it matters for Contractors
If you're building housing in Portland, the SDC waiver can take real money off the table, but the clock matters. Projects have to hit construction milestones within a year of permit issuance to keep the exemption, so a permitted job sitting idle could lose it. That makes scheduling and crew availability more important than usual. With 1,687 units still in the permit pipeline and the program running through Sept. 30, 2028, there's a lot of work queued up. Builders and subs who can start quickly after permits are issued will be the ones developers want on these jobs.