OHCS HB 3040 Review of System Development Charges

In 2021, the Oregon legislature passed House Bill 3040 (HB 3040), directing Oregon Housing and Community Services (OHCS) to prepare a study of System Development Charges (SDCs)— a form of one-time impact fees charged on new development to help pay for infrastructure that serves or provides capacity for growth. OHCS contracted with ECONorthwest and subcontractors FCS GROUP and Galardi Rothstein Group to undertake this report. The legislature requested that the study cover the history of the charges, methodologies for setting the fees, recent trends in fee levels, how the fees relate to other development costs, and how they ultimately affect the cost and production of housing. The team drew its findings from reviews of national and local studies; surveys of cities, counties, and special districts; interviews and focus groups with local government officials and housing developers; original data analyses; and decades of experience conducting SDC studies, analyzing residential development, and evaluating infrastructure funding mechanisms.