It’s early, but the city of Portland’s moratorium on development fees appears to be moving some multifamily developers off the sidelines and into building, according to permitting data and interviews.

In fact, it led one developer to propose a new project. Joe Westerman on May 1 requested early assistance from Portland Permitting & Development for a four- to five-story mixed-use building with 158 apartments in 213,644 square feet at Northeast Sandy Boulevard and 52nd Avenue.

If the project were to advance, it would represent a rare boost of supply to Portland’s tight housing market.

“I’ve been building apartments in Porland for 30 years, and I kind of got away from it when working with the city got so unruly,” Westerman said.

So, what changed?

“Portland is incentivizing developers with not having to pay the system development charges,” he added. “It’s probably going to be $3 million that you don’t have to pay. That’s – that’s nice.”

System development charges fund city infrastructure through various city bureaus, but the fees have drawn blame for discouraging housing proposals by increasing costs.

SDCs average about $20,000 per unit; they can range from $15,000 to $35,000 per unit, according to a City Council document.

Only 818 market-rate housing units were produced in Portland in 2024 — the lowest rate in more than a decade. In response, the City Council last summer approved a moratorium on SDCs that will last until Sept. 30, 2028.

The development fee moratorium is helping keep projects alive, said Ezra Hammer, a land-use attorney at Ballard Spahr.

“For a pro forma that has seen compression over an entitlement period, the SDC waivers are helping with that compression,” he said.

Hammer said he’s also fielded increased interest from “out-of-town folks who are pleasantly surprised about the tonal shift we’re hearing.” That’s after Portland’s reputation soured amid pandemic shutdowns, protests and regulatory obstacles.

“The city appears to want to attract investment in multifamily housing,” Hammer said. “I haven’t seen those projects materialize yet, but it’s a big shift from the world we were in before where capital had absolutely no interest in Portland.”

Portland Permitting & Development is tracking an uptick in building permits issued since the fee moratorium began in August 2025. Some projects that had apparently stalled were given building permits.

As of Jan. 15, 265 new housing units complied with the program for a total of $6.68 million in SDC exemptions — an average of $25,221 per unit. An additional 207 units have had their permits issued and are on track to receive $4.17 million in development fee exemptions but have not yet completed compliance in the program, according to the agency. The city ordinance that created the exemptions requires new housing projects to pour a concrete foundation within 12 months of permits being issued.

PP&D is expected to present a full report on the program to the City Council after Aug. 15, when the exemptions will have been in place for a year.

“We see indicators that the SDC exemption is helping new housing units get developed,” PP&D spokesman Ken Ray stated in an email. “It is early in the program, and we expect we’ll have a clearer picture this fall after we’ve had a year’s worth of activity to review.”

The moratorium and builder-friendly vibes could even be enough to get someone like Westerman — a longtime Portland investor — off the sidelines. His JMW Properties owns four multifamily properties in Portland, one in Vancouver, Washington, and one in Medford. Westerman has brought on board Koble Creative to design the Sandy Boulevard project, which is named Rose City Mixed-Use in early planning documents.

“This could be a really amazing project,” Westerman said. “It has a beautiful southern exposure. You could have on the second floor an atrium, and … units on the inside. You could have fresh air in there; you could have skylights in there.”

Westerman said he wants to build relatively roomy studios and apartments with one or two bedrooms rather than the micro-units that some developers have built to boost rental rates per square foot.

Westerman owns the entire block, including the building at 5137 N.E. Sandy Blvd. that hosts the discount store Friday Deals. The larger building at 5201-5223 N.E. Sandy Blvd. includes G.O.A.T. Bar and Hollywood Fitness, a longtime neighborhood gym owned by George Camalli.

Westerman said he hopes Hollywood Fitness will be the anchor tenant in the new building, in a 10,000-square-foot storefront space. “I like that — having to deal with one tenant,” he said.

The project could also affect the Rose City Food Park. But the food carts may be able to move to the block’s west end, Westerman said.

Koble Creative previously designed Westerman’s Cedar Commons development in Medford.

“They’re a good local architect,” he said.

Westerman, a contractor, expects to perform the construction in-house.

A new outlook in the city government gained Westerman’s attention, he said, in contrast to what he considered an anti-developer stance when the permitting agency was overseen by former city commissioner Chloe Eudaly.

“The permits center became an area of ‘no,’ and I think that’s changing,” he said. “We are going to early assistance to find out all of the issues if there are issues, and then we’ll do a cost model and a pro forma model. And we’ll see if it papers out.”

Westerman also owns a large swath of land in Gateway that he’s so far been unable to redevelop. He also suggested he’d be happy to take on investors for the Sandy Boulevard development.

“Anyone who would like a partnership, give me a call,” he said.

Portland needs more housing, and it also needs some good news, Westerman said.

“It’s easy for me not to be happy with Portland,” he said. “But the bottom line: I would like to be part of the solution.”

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Two Portland city councilors are pushing a resolution to reform the city’s design review process and perhaps provide a temporary exemption for housing proposals.

The effort represents a serious challenge to design review, which is overseen by Portland Permitting & Development. Developers have long blamed the process for delaying construction and adding costs, but supporters say it improves the design of proposed buildings that go through review and allows the public to weigh in on what’s built in the city.

Councilors Angelita Morillo and Eric Zimmerman are sponsoring the resolution, which will be discussed during Wednesday’s meeting. It directs the city administrator to deliver a report to the council within 120 days. The report would:

• include an overview of the types of design review, along with design overlay zones, design districts and historic districts to which design guidelines apply, and
• offer an economic impact analysis of design review on commercial and residential development timelines during the past five years, and projections for the next five years.

The city administrator would then provide options for a temporary exemption from design review and propose potential changes to the city code that underpins the design review process.

Design review “gets talked a lot about as a barrier, but what is the barrier gets a little fuzzy,” Zimmerman said Monday.

The report will “allow us to cut to the chase,” he added. “I would like to hear from the staff – what do they think are the most attackable problems?”

The design review study dovetails with other efforts to facilitate development in Portland. In July, the City Council approved a three-year waiver on system development charges for housing projects.

It’s still an “open question” whether a moratorium on design review would affect commercial projects as well as housing proposals, Zimmerman said.

He expressed concern that design review could deter unique proposals.

Local developers “know what gets through design review,” he said. “That worries me a little bit, because I want to see someone push the envelope a bit as far as awesomeness or uniqueness or density.”

Permitting & Development is open to discussing design review reform, according to agency spokesman Ken Ray.

“We look forward to working with the City Council on ways to bring more flexibility into design review to ensure the process supports thoughtful growth and investment in Portland’s buildings that meets the needs of the people who live, work and do business in them,” Ray stated in an email on Monday.

Design review has come under fire in other cities, including Seattle, where the process has become a roadblock to development.

“We can all agree that nice-looking buildings are a good thing and probably make it more popular to build stuff, but we can’t agree on what nice looking means,” said Michael Andersen, who studies cities for the nonprofit Sightline Institute. “It’s not something you can achieve from regulation.”

Portland’s design review process isn’t as dysfunctional as Seattle’s was before the Seattle City Council suspended design review requirements in September, Andersen said.

“F�ǰ��ٳܲԲ��ٱ����, Portland Design Commission hasn’t been utterly ridiculous,” he said. “But anytime you introduce discretion, you introduce risk.”

Bruce Studer, president of the Pearl District Neighborhood Association, said there’s an appetite to streamline design review in Portland.

“I think people would want a little bit smarter way to go through design review,” he said. “I don’t think just being able to block things by stalling it out is something we want to have. You want developers to be able to build things that are smart, sustainable and create lasting growth.”

The Design Commission is composed of seven members who serve staggered four-year terms for up to eight years. Members hail from architecture, development, landscape architecture, arts and related fields, along with a member representing the public at large.

Zimmerman and Morillo’s resolution passed the council’s Climate, Resilience and Land Use Committee on Nov. 13 by a 4-0 vote.

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Oregon Gov. Tina Kotek and Portland Mayor Keith Wilson have announced a city initiative to usher in the development of 5,000 new housing units as an early action of their Multifamily Housing Development Workgroup that was launched earlier this year.

A proposed Portland ordinance will go before the Revenue Committee in early June and then the City Council, according to city spokesman Cody Bowman. If passed by the City Council, the ordinance would waive System Development Charges (SDCs) in Portland until either 5,000 housing units are built or three years pass.

The city of Portland has applications for projects totaling over 6,000 housing units in the queue; however, many projects don’t move forward because their costs are slightly too high for developers to attain financing, according to a press release.

The Oregon System Development Charges Study, the press release states, found that the average total SDC charges for projects in Oregon is roughly $15,000, and can be as high as $50,000. These charges can be the equivalent of 3 percent to 6 percent of the total development cost.

On March 6, Kotek and Wilson formed the Multifamily Housing Development Workgroup, which was convened to recommend potential actions to facilitate more multifamily projects in Portland. The proposed ordinance originated from one of the draft recommendations.

The initiative is intended to be an expedient action that lowers developers’ costs during the crisis.

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While the 2,300 acres of the South Cooper Mountain Annexation Area are now mostly undeveloped, the city of Beaverton is getting ready for future growth. To help pay for road improvements in the area, the Beaverton City Council will hear the first reading of new transportation system development charges at its July 7 meeting at 6:30 p.m. A second reading will take place July 14.

The transportation SDCs will pay for new roads and improvements to old ones in the area, said Luke Pelz, the city’s senior transportation manager.

“The South Cooper Mountain transportation system development charge is an important funding source that ensures transportation system enhancements are constructed to support the additional traffic generated by future development,” he said.

Other money for road infrastructure is coming from the Washington County Transportation Development Tax and the Major Streets Transportation Improvement Program as well as construction by developers, he added.

According to the South Cooper Mountain Concept Plan at www.beavertonoregon.gov/DocumentCenter/View/8289, north-south traffic is too reliant on the corridor featuring Southwest 170th and 175th avenues; new connections and improvements will make a more complete road network. Key projects, according to the plan, will include improving 175th Avenue at its “kinked” intersection with Kemmer Road; connecting 175th Avenue to 185th Avenue via Kemmer Road with a new road east of 190th Avenue; upgrading Tile Flat and Grabhorn roads; improving Scholls Ferry Road to five lanes west to Tile Flat Road; and connecting Tile Flat Road to Roy Rogers Road.

The transportation SDCs will be imposed when a developer receives a building permit, Pelz said, but so far the only applicant is the Beaverton School District. It has submitted a land use application for a new high school.

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The Portland City Council won’t vote whether to increase system development charges (SDC) for parks until Wednesday, but developers already have an extension.

At the May 20 council meeting, Mayor Charlie Hales introduced an amendment to the proposed ordinance that will delay its implementation until July 2016. Originally, it was supposed to take effect in July 2015, and a subsequent amendment, now superseded, would have set the implementation date for January 2016.

The amendment passed unanimously, but Commissioner Amanda Fritz noted that exemptions as noted in the plan can be filed 30 days after final approval of the ordinance.

The new SDCs for parks would mean higher costs for homebuilders and developers, but allow Portland Parks and Recreation to increase capacity and buy land for future parks, according to the bureau’s website. The fees could not be used for parks maintenance.

The proposed plan has drawn criticism from several sources. Dave Nielsen, CEO of the Home Builders Association of Metro Portland, has complained that the new rates are not fair because they more than double commercial rates and unfairly penalize construction of big houses. Sandra McDonough, president and CEO of the Portland Business Alliance, wrote to parks director Mike Abbaté and stated her concern that “the city still lacks a plan” for park maintenance. – Beverly Corbell

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Higher costs will be in store for builders and developers in Portland if proposed system development charge rate increases for parks are approved by City Council.

Voters last year approved a bond measure to provide for parks maintenance and restoration, but there was no provision for expansion of capacity to keep up with population growth.

Portland Parks and Recreation wants more money to buy land and increase capacity for future parks, and that money, they hope, will come from SDC fees. Those dollars, according to the parks department’s website, can be spent only on capital improvements to increase parks’ capacity, and not for operations and maintenance.

are tacked onto building permit fees for new development, both residential and commercial. Development of the proposal to increase rates began in December 2012 via a task force of stakeholders appointed by Commissioner Nick Fish and parks director Mark Abbate, according to the parks department website; Commissioner Amanda Fritz endorsed the task force’s work when she took on parks oversight in 2013.

Public comments on the plan will be received by Portland City Council during its April 15 meeting at 2 p.m.

Instead of using five residential categories as in the past, ranging from single-room occupancy with a flat fee of $4,942 to single-family occupancy with a fee of $8,594, the new plan calls for residential rates determined by size. The lowest would be $5,454 for a new building smaller than 1,000 square feet inside the central city, and the highest would be $13,185 for a new house larger than 2,500 square feet outside the central city.

The proposed SDC parks fee for non-central city development would be more equitable, according to the parks department, because it would account for use of city parks by employees of businesses in areas outside the city center. As a result, the fee for a new non-central city warehouse of 122,640 square feet would jump from $6,623 to $24,528, the fee for a 10,000-square-foot retail building would go from $3,800 to $14,400 and the fee for a 15,000-square-foot industrial structure would go from $3,600 to $13,650.

The commercial SDC rate would continue to be based on a certain amount per square foot in five categories. Parks SDCs for a new hospital inside the central city, for example, would jump from $1.15 per square foot to $2.52. For a hospital outside of the central city, the rate would increase from 51 cents per square foot to $1.93.

Some stakeholders say the rates would be too high. Dave Nielsen, CEO of the Home Builders Association of Metropolitan Portland, said it’s not fair to more than double commercial rates and penalize people with big houses. He said that people with big houses are less likely to have an impact on public parks because they tend to have big backyards, as stated in a critique by the HBA in February.

“It is more reasonable to assume that the smaller urban multifamily units will use the city’s parks in greater numbers than the single-family home residents as they do not have the option of recreating in the front or rear yards or using local HOA parks,” the report states.

But Jennifer Yocom of Portland Parks and Recreation said the SDC is based on the availability of the park system to everyone and is determined by the average number of persons in dwelling units, developed from data from the U.S. Census. Larger dwellings have an average of more people, she said, and Nielsen’s assertion “does not account for the fact that Portland Parks provides many, many recreational opportunities that are not available in the yards or HOA amenities of large homes.”

Sandra McDonough, president and CEO of the Portland Business Alliance, last month stated in a letter to Abbate her concern about fee increases “while the city still lacks a plan” for park maintenance.

The parks department states on its website that funding for all park maintenance will continue to come from the city’s general fund, which McDonough sees as a problem. She said her group endorsed the bond measure “with the provision that a long-term financing strategy … be developed for ongoing maintenance of city parks.”

McDonough wrote that her organization is “extremely concerned” with the negative impact of the increases on new development and that SDCs for parks are already among the highest.

McDonough suggested that a sliding scale be used for workforce and affordable housing developments, and added that the replacement value of Forest Park should not be included in the new rate proposal because “it skews the level-of-service measurements.”

She also urged the parks department to “keep the recovery rate at 78 percent and not the proposed 86.6 percent.” She suggested that higher fees could be phased in over time “to minimize adverse impacts on development.”

McDonough also complained that the proposed rate increases were not revealed until the task force’s final meeting in January.

“A better process would have been to allow this group of stakeholders to see, question, comment and review the actual proposed rate changes,” she said.

But Yocom said the entire report was distributed to the task force at its Dec. 8 meeting.

“The task force had an additional month to consider those rates, and they were discussed again at their final meeting held on January 14,” she said.

On the 14-member task force, Raihana Ansary represented the Portland Business Alliance and Justin Wilson represented the Home Builders Association. Other members include community members and representatives from the League of Women Voters, Coalition for a Livable Future, Portland Development Commission, Development Review Advisory Committee, Concordia University and the Portland Parks Board.

If City Council approves the proposed SDC rates for parks, they will take effect July 1.

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When Portland architect Raphael Goodblatt helped bring into city compliance a project that increased the number of units in an existing apartment complex, the idea struck a chord with him.

Goodblatt, a principal with Ah Ha! Architecture, believes Portland-based Stark Firs Management owner Moe Farhoud, has found a great way to provide more affordable housing in Portland. This is one reason why he argues the city of Portland should incentivize apartment conversion projects like Farhoud’s that create more housing by reducing or waiving system development charges.

“I just think he hit on the perfect solution from affordability, sustainability and to create jobs,” Goodblatt said.

Farhoud hired Goodblatt, who previously worked for the city as a life safety plans examiner, after city building inspectors figured out the second chance landlord converted the Alder Royal Apartments without permits. The project, which made the Southeast Portland complex profitable, took 40 two-bedroom, two-bath apartments and converted them into 75 one-bedroom and studio units.

Farhoud said he converted the Alder Royal Apartments despite city building officials telling him multiple times that it couldn’t be done without compromising fire safety. He disagreed.

“I said, ‘This is doable because we can maintain the life safety.’ ”

As Goodblatt helped Farhoud navigate the process of bringing the project up to code and paying the appropriate fees, they noticed that each city department made no distinction in SDCs for renovating an existing building to add more units. Farhoud, whose company owns12 apartment buildings in outer Southeast Portland, said he was charged as if he was constructing a complex from the ground up.

“We’ve tried to repeat this project in other buildings,” he said. “The city of Portland treats us like a new project.”

Goodblatt contends that the city should offer reduced SDCs for conversion projects like Farhoud’s because they often require simple adjustments to existing buildings. City officials forcing Farhoud to spend $80,000 to widen sidewalks in front of Alder Royal was completely unnecessary, he said.

“The goal is scalable SDCs,” Goodblatt said. “People should get credit for what they have.”

He has written a report proposing revised SDC policies for apartment conversions and reached out to city officials with the proposal.

Portland Mayor Charlie Hales‘ spokesman Dana Haynes said in an email that the mayor’s office could not comment on the issue until after staffers can discuss the proposal with Goodblatt later this month.

If the city were to reduce or waive SDCs for apartment conversions, the number of projects would increase, Goodblatt said. The result would be similar to how accessory dwelling unit construction exploded in Portland after the city waived SDCs fees for the backyard cottages, he said.

“If you want to be a sustainable city, then remodel existing buildings,” he said. “If we do scalable SDCs, it incentivizes developers to create affordable units all over town.”

Farhoud said he hopes to encounter fewer barriers from the city when he increases the number units in other existing apartment buildings.

“There’s a lot of bureaucracy here,” he said. “I’m trying to do business with the city of Portland. I think they work against you.”

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An Old Town Chinatown revitalization plan approved recently includes incentives for developers to build apartments in the neighborhood for middle-income residents.

The Portland City Council last week approved the Portland Development Commission‘s Old Town/Chinatown Five-Year Action Plan. It calls for a waiver of the city system development charge for construction in Old Town of up to 500 units for renters who earn up to 100 percent of the region’s median family income, or $48,580 for one person.

The aim is for the development subsidy – estimated to total $7 million over the next five years – to diversify the neighborhood’s housing stock, said Jillian Detweiler, policy director for Portland Mayor Charlie Hales‘ office. Currently, 72 percent of apartments in Old Town are restricted to low-income renters, compared to 6 percent citywide.

SDC waivers for middle-income apartments would apply only to new construction and be similar to those the city currently offers to encourage development of low-income housing, Detweiler said.

While PDC officials were developing the Old Town revitalization plan, neighborhood residents and other stakeholders pointed out that the area already has a high percentage of low-income housing, but lacks market-rate apartments, she said.

“They identified something that didn’t come up in other places,” she said. “They were looking for a tool to introduce more market-rate housing. They’re saying we’re oversaturated (with low-income housing).”

Old Town has already attracted some private investment in middle-income housing. Portland-based developer Gerding Edlen is planning a $37 million, six-story mixed-use development on the corner of Northwest First Avenue and Davis Street that will include 58 units of workforce housing. The project would qualify for the new SDC waiver, and the developer has expressed interest in applying for it, Detweiler said.

Another proposed PDC program in the action plan would provide $5 million worth of incentives to encourage seismic retrofits of the neighborhood’s unreinforced masonry buildings.

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Home builders who specialize in accessory dwelling units might have cause for celebration this Wednesday.

The city council is scheduled to vote on a resolution that would extend a suspension on system development charges for ADUs for another three years to July 31, 2016. Adopted in 2010, the suspension was slated to expire in 2013.

ADUs are small apartments – often converted garages or mother-in-law cottages – that are built onto existing residential properties. While the price to build one can start at $80,000, the SDCs alone can often cost between $8,000 and $13,000.

Matthew Grumm, policy manager for Commissioner Dan Saltzman’s office and the Bureau of Development Services, said the existing suspension had proven to be successful in promoting ADU development. In a Sept. 25 article in the Daily Journal of Commerce, Hammer and Hand owner Sam Hagerman said the SDC suspension had increased the number of yearly permits for ADU construction from a couple handfuls to a couple hundred.

The goal of the resolution is to foster continued ADU development. Wednesday’s city hall meeting begins at 9:30 a.m. and is located at 1221 S.W. Fourth Ave. Information on the resolution can be found .

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City officials in Dallas are considering extending a discount on system development charges to help spur homebuilding in the town of 15,000 people located 15 miles west of Salem.

The discount waives sewer SDCs for new homes and cuts the SDC for water in half for homes less than 1,700 square feet. The city began offering the discount in February, and 29 applications for new homes have been submitted since.

At least 23 of those applications are for home that would qualify for the discount, said Dallas building official Ted Cuno.

Only 13 applications for building permits for new homes were submitted in all of 2011.

The discount was supposed to end Sept. 30. However, city council members decided to extend the program at least through October and perhaps longer.

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