SDC Exemption for Home Ownership

Administrative Rules

System Development Charges

Read about how SDCs are charged as well as current rates for new development, additions, and changes of use.

Program Requirements

Eligible Developments

To be eligible for the SDC Exemption Program, the applicant must have an active building permit application as well as ownership of the property. The proposed development must meet the affordability requirements per Title 30.01 – Affordable Housing Preservation, Chapter 30.01.095 including the following:

• Homebuyer income limit: 100% AMI or 120% MFI*
  *Applications submitted for SDC exemptions prior to March 1, 2024 for homes that sell prior to July 1, 2026 are allowed to sell to homebuyers earning up to 120% of the Area Median Income (AMI) for a family of four (currently $140,280 and adjusted annually) and adjusted upward for households of more than four people.
  
  Developments that do not meet the criteria listed above must serve households at or below 100% of the AMI for a family of four (currently $116,900 and adjusted annually) and adjusted upward for households of more than four people.

• 2024 Sale price cap: $455,000
  Units must sell for less than the price cap (updated annually).
  
• Sales must be arm's length transactions. An arm’s length transaction is one in which the buyer and seller act independently and have no relationship (by blood, marriage or unrelated business dealings) to each other. An arm’s length transaction will be fair and equitable to all parties and will result in a fair market price.
  
• Occupancy: Units must sell to homebuyers who will occupy the homes as the initial occupants and who will continue to live in the homes. Properties receiving homeownership exemptions may not be rented.

Compliance Requirements

The Portland Housing Bureau (PHB) requires the applicant to comply with the terms and conditions outlined in their recorded Regulatory Agreement (view sample) per Title 30.01 – Affordable Housing Preservation, Chapter 30.01.095. 

Homes approved for SDC exemptions must be sold to income-eligible homebuyers who will occupy the homes as their primary residence. Income is evaluated based on a homebuyer’s current annualized income. If a property is sold to an ineligible homebuyer or over the sale price cap, the developer must repay the exempted SDCs plus interest and fees to the city of Portland SDC Bureaus and PHB.

Process Steps for Home Ownership Project Compliance Requirements:

1. Homebuyer completes and signs the Homebuyer Compliance Verification Form and submits it along with supporting income documentation (see page two of the form) to PHB for review prior to the sale of the property. This must be submitted at least 10 days prior to closing. Generally, the escrow officer handling the closing will help facilitate this step.

2. If it is known that the homebuyer will not meet the requirements, the escrow officer submits an SDC Demand Statement Request Form to PHBto request a demand statement detailing the repayment amounts prior to closing.

3. PHB reviews the forms and supporting documents and then emails a demand statement to escrow disclosing whether or not the homebuyer meets the affordability requirements and indicating if any repayments are due.* PHB demand statements are valid for 90 days.
    
4. There is a $1,000 processing fee per property sold, which is due and payable at closing.
    
5. Escrow officer collects and pays the applicable amounts of any repayments due.
    
6. Once PHB receives proof that the SDC Bureaus have been repaid and/or the property has sold to the verified homebuyer for the current price cap or less, PHB records a Release Agreement and the SDC Exemption Program requirements are released.

(1) The amount exempted in the Regulatory Agreement is an estimate only; do not use this figure to calculate repayments. Only a Demand Statement from PHB will list the correct repayment amounts. 

(2) Any repayments due in the case of non-compliance will be charged a $1,000 processing fee by PHB and an additional processing fee by each bureau requiring repayments. Repayments will be due based on the rate that was in effect at the time the complete building permit application was submitted, plus interest (currently 6.2%, based on the city’s interim rate effective as of February 7, 2024).

SDC Exemption Forms and Documents

Home Ownership Projects

Download and submit forms to: indirect@portlandoregon.gov

The new online form is currently in testing.
[FOR TESTING ONLY] Online form

Download forms

*Projects subject to Inclusionary Housing use a different form. Please click here for IH Forms.

How to Submit Forms

Submitting your forms and supporting documents by email is best and most efficient. As alternatives, mail, fax, and a physical drop box are available. Please note, paper forms may affect how quickly we can receive your application.

In person drop-off: Regular business hours at the PHB front desk, 7th floor. If you have questions, please send us an email.

Drop box: Look for the gray mail bin located in the building lobby, labeled "Portland Housing Bureau."

Questions

Best way to reach us is by email or phone.
indirect@portlandoregon.gov
503-823-3270

PHB is operating hybridly. Program staff are only in the building on certain days of the week.
Book in-person appointment (Tuesdays and Thursdays)

Get directions to PHB
1900 SW 4th Ave, 7th floor