Photo: Getty Images

Governor Tina Kotek and Portland Mayor Keith Wilson announced a city initiative to usher in the development of 5,000 new units of housing in Portland as an early action of their Multifamily Housing Workgroup launched earlier this year. If passed by the City Council, the City of Portland would waive the System Development Charges (SDCs) in Portland until 5,000 housing units are built or three years have passed. They were joined by Portland City Councilor Jamie Dunphy, Sarah Zahn (Oregon Smart Growth Board), Tom Kilbane (Managing Director at Urban Renaissance Group), and Andrew Colas (CEO at Colas Construction, Inc).

“Portlanders are impatient for more progress on the city’s housing supply crisis. So am I, and so is the Mayor. Even in tight budget times, we need to get creative and try new things,” Governor Kotek said. “We have to put our whole weight behind building Portland into the vibrant, safe, and prosperous city we know it can be. Things are getting better all the time, and the Mayor and I are ready to double down.”

“By temporarily waiving these fees, we can make the numbers work and turn stalled plans into real homes for real people,” Portland Mayor Keith Wilson said. “Right now, developers are ready to build over 4000 homes in Portland. But too many projects stall because of costs— Waiving SDCs can cut thousands of dollars of the cost of building a home and can be make the difference in someone being able to make the decision to build homes in our city.”

Since the Governor’s first day in office, she has been focused on solutions to create a healthy, affordable housing market. As a result, the Housing Accountability and Production Office (HAPO) and a moderate-income revolving loan (MIRL) fund to support cities and counties in developing more housing have already been established. By July, the state estimates that 2,800 affordable housing units will be financed, and over the next two years, needed infrastructure to support over 25,000 affordable and market rate housing units will be in construction.

“As a lifelong Portlander, I know firsthand that we’re facing a housing affordability crisis," Colas said. "The solution is to be pro-housing and accelerate housing production. Governor Kotek and Mayor Wilson’s new initiative to deliver 5,000 new housing units sends a clear national message: Portland is open for business. Thank you, Governor Kotek and Mayor Wilson, for your united leadership in driving real action to build more affordable homes.”

This partnership with the Mayor is part of the Governor’s ongoing work to break down barriers to housing affordability, including her effort to legalize middle housing in more places (HB 2138), the creation of the Governor’s Infrastructure for Housing Program (HB 3031), and a recommended budget of $1.06 billion to build on the state’s progress and increase Oregon’s housing supply in every part of the state.

“We are in a crisis when it comes to multifamily housing development in Portland. I see firsthand how challenging it has become to make projects financially feasible,” Zahn said. “That’s why we’re so encouraged by the leadership of Governor Kotek and Mayor Wilson in taking bold, tangible steps—like the proposed moratorium on System Development Charges, which can add up to $20,000 per unit for developers looking to build. Portland is serious about jumpstarting housing production. It’s not a silver bullet, but it’s a critical first step. We look forward to continuing to work with city and state leaders to create the conditions that will allow housing development to thrive.”

The City of Portland has applications for over 6,000 units of housing in the queue, many of which don’t move forward because the projects’ price is just out of reach to secure financing. A temporary SDC waiver can change that bottom line enough to move the project over the finish line.

SDCs are an essential tool for local governments to facilitate the provision of urban services. The intent of this initiative is to be a temporary, crisis-time opportunity for developers to build with lower costs in Portland.

According to the Oregon System Development Charges Study, the average total SDC charges in Oregon are roughly $15,000, and can be as high as $50,000. These charges can be the equivalent of 3-6% of total development cost and can limit the number of firms building new housing and the number of projects pursued by existing affordable and market-rate developers.

On March 6, 2025, Governor Kotek and Portland Mayor Wilson kicked off the Multifamily Housing Development Workgroup, convened to recommend potential actions the Governor and the Mayor can advance to move more multifamily housing projects forward in the City of Portland. This announcement is an early action being taken on one of the draft recommendations.

Source: Oregon Governor's Office

Armstrong & Getty