Why Portland is giving developers a reprieve on fee hikes

Portland homebuilders and developers will receive a yearlong reprieve in proposed fee hikes to pay for city parks.

The City Council on Wednesday unanimously agreed to postpone higher parks fees until July 2016, a full year beyond the original timetable. The proposal would double and in some cases nearly quadruple parks-related fees.

A final vote is set for May 27.

The increases, initially proposed by Commissioner Amanda Fritz, who oversees Portland Parks & Recreation, have come under fire from the business community and homebuilders.

Fritz initially proposed an effective date of July 2015 but later offered an extension to January.

Mayor Charlie Hales on Wednesday proposed an additional six-month extension, to July 2016. Hales said the delay would give builders financial certainty for projects in the works.

Fees are assessed when a building permit application is deemed complete.

Hales also said the delay would allow city officials to consider more sweeping changes to fees citywide. "I am concerned about the total fee impact," he said, noting rising home costs.

Asked if that broad review would include reconsidering the same parks-specific increases the City Council is about to approve, he said, "Everything's on the table."

The proposed parks increases would affect residential and commercial development. As an example, the system development charges -- fees charged on new development to pay for parks and other infrastructure -- for a home outside the central city would increase from $8,594 to as much as $13,049, while central-city costs for an office would climb from $1,087 per 1,000 square feet to $2,370.

Parks officials say they need to increase fees to meet the city's long-term needs for new parks and improvements to existing facilities. Projections suggest Portland could collect $552 million from development fees over 20 years.

Justin Wood, a homebuilder who worked as the lobbyist for the Home Builders Association of Metropolitan Portland until last month, said an extension is welcome but that the increases are still unpopular.

"We think this SDC is extremely flawed, and I'm almost certain it's going to end up in the court system," he said.

-- Brad Schmidt

503-294-7628

@cityhallwatch

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