This week, Gresham City Council voted to adopt an HBA System Development Charge (SDC) administrative reform proposal with the aim of reducing the cost of new housing. In its first reading of the Council Bill, the council unanimously approved Gresham Revised Code amendments that allow for the deferral of SDCs until final inspection. If approved upon second reading next month, deferred collection of SDCs will take effect November 8. SDC deferral represents a change from the current system, under which SDCs are charged and paid when building permits are issued to begin construction. This means that if developers use loans to pay for their SDCs, they pay the carrying costs of those SDCs throughout the construction process. Additionally, construction loans and hard-money lending typically incur higher interest rates than conventionally-secured loans in order to secure the higher levels of risk taken on by builders. As a result, the costs of SDCs are higher in real terms the earlier they are charged. These factors mean that by collecting SDCs closer to the time of construction completion, Gresham is actively reducing the cost burden to developers and builders of new homes. Depending on project size and timeline, this simple reform can reduce the cost of building a new home by thousands of dollars without reducing the fees the city collects for important growth-related infrastructure, ultimately lowering the cost to homeowners. In Gresham, SDC deferral is already available for commercial, industrial, and multi-family. By passing SDC reform for single-dwelling and duplex structures, Gresham would encourage those types of builders to enter its housing market, thereby supporting a competitive business environment for single and duplex development. Additionally, as single-dwelling and duplex builders realize reduced carrying costs, they are able to re-allocate those dollars toward additional housing units in the city, supporting housing supply and affordability. Within HBA’s six-county territory, the cities of Newberg and Tigard, along with some special districts, also defer SDC collection to later in the construction process. To learn more about HBA involvement in Gresham and SDC reform generally, contact Roseann Johnson at firstname.lastname@example.org.