SDC Exemption Program for Rental Projects

The SDC Exemption Program has different requirements dependent on whether the exempted unit will be sold to home buyers or rented. This page covers information for building owners that intend to rent out the exempted unit.
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System Development Charges

Read about SDCs and 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 site control and the proposed development must meet the following affordability requirements (per Title 30.01 – Affordable Housing Preservation, Chapter 30.01.095):

Rental Projects

  • Exempted units must be restricted for a 60-year period.

  • If a proposed rental housing development has units which do not meet the above requirements or includes a commercial component, the actual exemptions will be prorated as applicable to the residential portion of the development subject to the affordable housing restrictions.

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). The compliance requirements are as follows:

PHB’s Risk Analysis & Compliance department conducts annual audits of each project receiving SDC exemptions. Project Sponsors must certify tenant incomes and rents annually through the Web Compliance Management System (WCMS). See PHB’s Development Incentives guidelines.

Log in to WCMS    Development Incentives

Frequently Asked Questions

  1. What is the benefit of the SDC Exemption Program for rental projects? The SDC Exemption Program exempts the SDC’s due on a building permit for affordable rental housing units. Both for‐profit and non‐profit developers may use the program to reduce the cost of providing affordable housing.

  2. How do I know how much the SDCs will be for my building? The bureaus assessing SDC’s (Water, Transportation, Parks, and Environmental Services) will determine the amount due based on the building permit application including the plan set and the information provided on, but not limited to, the SDC Form, submitted to Bureau of Development Services.

  3. Who determines what the amount of the exemptions will be? PHB will work with the individual SDC bureaus to determine the eligible exemption amount after the bureaus have calculated their charges. The benefit of the exemptions varies by the type of building (i.e. residential only or mixed-use), the total number of units versus the exempted units, as well as whether or not a project receives credits for existing infrastructural improvements to the property.  Exemptions are pro‐rated to exclude any portions of a project which are not affordable or residential including common areas and commercial space.

  4. How and when do I apply for the exemptions? Applications are submitted to PHB after the building permit application is submitted to Bureau of Development Services. PHB must approve exemptions prior to issuance of the building permit.  

  5. What are the affordability and compliance restrictions of the program? Affordable units must be rented to tenants earning 60% or below of the area median family income (MFI), as adjusted for household size and determined annually by the U.S Department of Housing and Urban Development. Monthly rents and expenses associated with occupying the affordable units (such as utilities) may not exceed 30% of the maximum monthly MFI level determined by bedroom and household size. A project must maintain affordability for a period of 60 years for the number of exempted units. PHB will record a Regulatory Agreement on title to the property.   Tenant income and unit rents must be submitted to PHB’s Risk Analysis and Compliance annually for the affordable units.  

  6. What happens if I sell the development or no longer want to provide affordable units during the 60-year affordability period? PHB needs to approve any transfers of the property to confirm program requirements will continue to be met. Projects not meeting program requirements will need to repay all charges exempted, plus interest and fees.

SDC Exemption Forms and Documents

Rental Projects

Not subject to Inclusionary Housing:

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

Contact Information

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