SDC Information

What are SDCs?

System Development Charges (SDCs) are Oregon's method of financing city and state services when new development occurs.  The costs of these services (schools, libraries, police and fire service, water, sewers, etc.) are often higher than city budgets can handle, so property taxes often increase – along with other problems associated with increasing population.  SDCs direct developer investment into their own markets to help cover the costs of new development.

Don't SDCs impede construction activity?

Despite arguments to the contrary, SDCs generally don't affect construction activity.  A 2010 SDC study of Florida counties revealed no difference in construction activity between counties that charge SDCs and those that don't.

Where can I learn more about SDCs?

• Here is a site that covers SDCs in detail, offering links to state and local SDC laws and requirements. 
• Here's what the League of Oregon Cities says about SDCs.

Why is OCVA concerned about SDCs?

Many studies show that the SDCs currently being charged in most towns don't even come close to paying for the real cost of new development.  To make matters worse, SDCs are not required to address costs for police, fire, libraries, and schools.

One of OCVA's main initiatives is to help enact legislation requiring that SDCs cover ALL of the costs of development.  We continue to work on increasing SDC coverage.

Are there other factors at play?

Yes.  We know impact fees don’t cover the costs of growth, but that only partly explains why taxes increase as communities grow.  There is another factor that increases the costs of growth but provides nothing to cover those costs: Oregon State law requires cities to provide “sufficient buildable lands within the urban growth boundary … to accommodate estimated housing needs for 20 years.” [ORS 197.296(2)].

A 20-year supply is a huge land inventory.  What's more, cities are required to perform a variety of tasks to figure out what should be included in the 20-year supply.  There are significant labor and material costs for providing this service to the real estate industry.  OCVA believes communities would have more control over the costs and impacts of growth if ORS 197.296 was either repealed or amended to provide flexibility in the amount of land cities are required to keep in their inventory for the benefit of the real estate industry.

Learn more about the 20-year land supply issue.

What can be done?

To build momentum for our efforts, we have asked OCVA member cities to submit non-binding resolutions to their city councils, and request that the council pass the resolutions. 

You can do it, too.  We've provided sample resolutions regarding SDC reform and 20-year land supply reform for your use.  If you are successful in passing either of these resolutions, please contact us.

See a list of Oregon cities that have passed SDC and 20-year land supply reform resolutions.

See our resolutions page containing other draft resolutions you may find useful.

See our resources section for links, documents, articles, and other resources you can use to make your case.

This page last modified on 2014-09-07 09:56.