91视频

Some industry professionals say costs of system development charges in Portland are trending upward, and that the situation is starting to shape the face of their business.

鈥淭hey’ve been too high and they continue to escalate and the city believes that to fill the gap of lower building permits they’ll just keep raising fees, and it makes it harder for anybody to make anything pencil,鈥� said Robert Black, associate vice president of real estate investment firm .

Black added that SDC costs are increasingly hindering many of the developers he works with.

In 2008, city officials updated the methodology used to create SDCs, which are one-time fees assessed to new developments to cover a portion of the cost to provide services such as parks, transportation and sewer. Since Jan. 1, 2009, the city has adjusted its fees four times, though not always higher.

Riley Whitcomb, manager of the SDC program for Portland Parks and Recreation, said the city increased SDCs in two stages since 2009 to recover 75 percent (up from 25 percent) of growth costs. The fees are adjusted every July to reflect market rates, and the past two adjustments have resulted in slight decreases; they’re not likely to rise again, he said.

But Sam Rodriguez, vice president of development for in Portland, said SDC hikes represent the brunt of a 102 percent increase since 2007 in the amount of municipal fees he must pay to get a project off the ground.

From 2007 to 2011, Rodriguez said he has seen the total price of municipal fees for his projects increase from $6,678 per unit for the Tupelo Alley project in Northwest Portland, to $13,200 per unit for the Savier Street Flats in the Pearl District. While total fees for the 188-unit Tupelo Alley were approximately $1.26 million, total fees for the 179-unit Savier Street Flats were $2.36 million.

Rodriguez said he appreciates that those fees help pay for necessary services, but he said that current levels are doomed to generate at least one unintended consequence.

鈥淭he only (project) that you can get financed today is the most expensive 鈥� the property that will serve the highest piece of the market, the top crust of the market,鈥� he said. 鈥淭hat represents about 15 to 25 percent of the market that can afford these units.鈥�

That’s because investors today, as a result of recessionary risk adjustments, are interested only in investments able to produce greater yields, Rodriguez said. As project costs climb, so will rent charges for tenants so that profit margins are attractive to investors. And the projects that provide those yields, he said, are upscale multifamily developments.

With developers going after those projects and affordable housing agencies focusing on low-income opportunities, Rodriguez said he believes workforce housing will be shunted.

鈥淭he effect is going to be that you’re going to have a flight to the suburbs of that middle bunch, that middle group,鈥� he said. 鈥淵ou’re going to have the top end and the bottom end living downtown and nothing in the middle.鈥�

According to the Portland Housing Bureau, the median family income for a family of four is $73,000, and the maximum rent that family can afford is $1,898. Last fall, the Metro Multifamily Housing Authority said rents in Portland rose 8 percent from the previous year and that the average rent for a two-bedroom, two-bathroom downtown dwelling was $1,585.

Black said he also saw an urban housing hole looming for the middle class and identified SDCs as a primary culprit.

鈥淭he city is not being a partner in the stimulation of development,鈥� Black said.

But Nick Fish, a Portland city commissioner, said it is a delicate balancing act when it comes to adjusting SDCs.

鈥淲henever new units come online, we have to account for the impact on our infrastructure, and if we don’t cover those costs through development, then they are simply shifted to the general fund, which of course is being cut as we speak,鈥� he said.

Fish said SDCs and tax increment dollars from urban renewal districts are the two main funding sources for the parks bureau’s budget.

According to the bureau’s website, Portland is expected to gain 70,000 residents and 100,000 employees by 2020.

鈥淭he community has made it very clear they want to see underserved areas addressed, that parks deficient areas get their fair share of parks and green spaces,鈥� Fish said.

Fish also is head of the Portland Housing Bureau and said approximately 15,000 low-income households in the city are underserved by the market. He acknowledged that while numerous programs exist to address that need, fewer programs exist to spur workforce development.

鈥淚t is true that it is sort of the stepchild here because it is not housing that we subsidize in the same way we subsidize affordable housing and it is not housing that pencils out the same way as the high-end market housing,鈥� he said.

Robert Ball, principal of , said SDCs clearly play a role in how projects pencil out.

Astor Pacific recently paid $2.5 million in city permitting fees for its 177-unit Parker Apartments building planned in the Pearl District.

Ball said he budgeted for those fees and that he was happy to pay them, so long as they worked for his project.

鈥淚t works, but I am up against the line,鈥� he said. 鈥淚’m battling the 鈥� metrics (that) the people who finance the project look at.鈥�

Ball also said he thought that, with construction costs fairly static, reducing SDC costs would impact development.

鈥淚f the costs were lower I think definitely more projects would be built,鈥� he said. 鈥淭here’s no doubt about that and it would impact our ability to build 鈥� any developer’s ability to build 鈥� in neighborhoods where rents are less.鈥�

Rodriguez said he would like to see improvements to SDC exemption programs like the Portland Bureau of Transportation’s Transit Oriented Development Property Tax Abatement, which he said is difficult to navigate.

Fish said his door is open.

鈥淚’d be happy to talk to anybody that has a concern,鈥� he said.