Background

Municipalities charge SDCs, or development impact fees, to developers to recover some of the costs associated with the new development. Under state law, local governments may charge SDCs for five types of infrastructure: transportation, water, stormwater, sewage, and parks and recreation facilities. But many studies show that the SDCs currently being charged in most towns don't even come close to paying for the real costs of new development. AGO's recent Assessment of Statewide Growth Subsidies in Oregon documented over 1 billion dollars in subsidies to growth!

Having the ability to charge developers for the true costs of growth is a powerful tool for local communities struggling to fund needed services. When communities realize the enormous financial consequences of growth, they may begin to question whether future growth is desirable.

AGO is working in coalition with schools, police and fire, and non-profit organizations such as 1000 Friends of Oregon and Oregon Communities for a Voice in Annexations, to pass Senate Bill 511, which would allow communities to charge developers for the true costs of growth, including the costs of providing the schools, police and fire services, and libraries needed to accommodate the new growth.

Sample Letter

Select the text of the letter in the shaded area below, then copy and paste it into your email. Add a personal touch by inserting your own sentences or statements after you've pasted it into your email!
 

Senator John Doe
Oregon State Legislature
Salem, Oregon

Dear Senator Doe:

I am writing to urge you to support the Systems Development Charges (SDCs) legislation being considered by the Oregon State Senate.  The bill is designated as SB 511 and is being sponsored by Senator Charles Starr.

Research shows that residential development usually aggravates city budget problems. Typically the system development charges collected from the developer and the taxes collected from the new residents don't even come close to offsetting the costs of the new services that such development requires. An attempt to "build our way out" of our current budget woes will only exacerbate the problem.

According to the City of Redmond, Washington, new residential housing costs between thirty to fifty percent more than it adds to city coffers in SDCs and tax revenue. The American Farmland Trust (AFT) conducted surveys in 12 U.S. communities and found in each case that residential development constituted a net fiscal drain. AFT reports, "The results of this analysis show that over a wide range of densities the ongoing public costs of new residential development will exceed the revenues from such development." 

In a 1995 study for the Oregon Department of Economic Development, Portland State University economist Anthony Rufolo writes, "Increasing development that leads to increasing population creates a demand for public services and infrastructure that is likely to offset any tax revenues gains." In his 2002 report "Assessment of Statewide Growth Subsidies in Oregon," author Eben Fodor determined that the average new house in Oregon costs taxpayers $34,955 in infrastructure costs, which results in a net loss to taxpayers of $27,204 per new house once average SDCs are subtracted.

Many people do not even want to see their community grow any larger. A 1999 poll conducted by the University of Oregon Survey Research Laboratory found that 95% of Oregonians say Oregon's current population is just right or too big already. Oregonians have witnessed increasing traffic congestion, over-crowding of schools, declining government service levels, crumbling roads and bridges, and higher taxes.

Please consider supporting the SDC legislation so that new growth can at least pay its own way. We can't afford to do business any other way.

Thank you.

Sincerely,

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