Portland Affordable Housing SDC Exemption Rules 2026: Draft Changes and What 1–4 Unit Owners Can Actually Use
Updated: 6 days ago
Portland is rewriting the rules for one of its fee-waiver programs, and the comment window closes next week. If you own or are building 1–4 unit rentals in the city, most of the large affordable-housing subsidies are not written for you. The pieces that can still move a number are narrower, and one of them has a hard deadline.
What the Affordable Housing SDC Exemption Is
System Development Charges are the one-time fees the city charges when you create new housing units. Water, parks, transportation, and environmental services all get a cut. On a small project those fees can be a noticeable part of the budget. The Affordable Housing SDC Exemption Program lets you skip them if you agree to keep the units affordable under Portland Housing Bureau rules. Temporary rules went into effect September 8. Draft permanent rules are out now. Hybrid hearing is October 20 from 10 to 11 a.m. Written comments are due October 23.
The draft expands the program so it clearly covers rental units, lines the paperwork up with other PHB programs, and tightens enforcement. Ordinance 192210 also created a temporary income-limit waiver for certain for-sale homes that received a building permit before January 1, 2026, and sell to an initial buyer before September 30, 2028. That waiver does not apply to every overlapping incentive, and it does not turn a rental into an unrestricted unit.
The Temporary SDC Exemption Most 1–4 Owners Can Use
For most 1–4 unit owners the more useful tool is the separate Temporary SDC Exemption created by Ordinance 192082. It runs from August 15, 2025, through September 30, 2028. It covers new dwelling units (not ADUs or caretaker quarters) without an income or rent restriction. You submit an acknowledgment form before the permit is issued, and you have to hit a construction milestone within 12 months or the exemption can be clawed back. As of mid-January 2026 the city had already tracked more than a thousand units enrolled. Average exemption was running around $25,000 per unit on the units that had complied.
If you want the affordable version instead, the application fee for a 1–4 unit non-Inclusionary Housing rental is $725 per unit. The trade-off is real: the units must be rented to households at or below 60% of median family income, with rents set so housing costs stay at or below 30% of that income, for 60 years. That is a long restriction for a small building.
and now a couple shameless plugs.
If you are sorting through Portland fee waivers, notice rules, and the forms that keep a small portfolio legal, Portland Area Rental Owners Association (PAROA) membership gives you the landlord forms, the helpline, and the classes that walk through the current Portland overlay. Join at www.paroa.org.
When the day-to-day of screening, notices, and maintenance on a Portland Metro or Central Oregon portfolio starts eating the evenings you used to have free, Northwest Real Estate and Property Management (NWRPM) handles the operations so you can stay the owner. www.nwrpm.com.
Other Realistic Options for 1–4 Unit Owners
Outside the SDC programs, the realistic options for ordinary 1–4 unit owners are thinner. Energy Trust of Oregon updated its multifamily incentives for 2026. Stacked properties can get $1,000 to $2,000 per ducted heat pump, and there are per-square-foot incentives for flat-roof insulation that differ by heating type. County weatherization programs (Clackamas, Washington, and Multnomah partners) are mainly aimed at income-qualified households, but some will weatherize a rental if the landlord signs an agreement. The Portland Home Sharing Pilot already has its own article; it pays owner-occupants a one-time grant for renting spare rooms under tight rent caps. It is not a general rehab fund.
What you will not find is a simple state grant or low-interest loan aimed at ordinary market-rate 1–4 unit landlords for acquisition, rehab, or operations. Oregon Housing and Community Services programs, LIHTC allocations, and most PHB production loans are built for larger restricted affordable projects or nonprofits. If your building is already in an affordable portfolio and is underwater, different stabilization tools may exist, but those are not written for the typical duplex or fourplex owner.
How to Comment and What to Do Next
If you have a permit in process or are about to submit one, the practical path is to decide which exemption fits, submit the correct form before you pay for the permit, and keep the construction-milestone calendar. If you want the affordable program’s permanent rules to be clearer for small rentals, the comment window is open through October 23. Email Development-Incentives@portlandoregon.gov or speak at the October 20 hearing.
The draft rules and the temporary waiver are real, but they do not create a new pot of money for every 1–4 unit owner. The Temporary SDC Exemption is the broader tool if you are building new units. Everything else requires either a long affordability restriction or is limited to specific upgrades or owner-occupied room rentals.
Christian Bryant
President of both the Portland Area Rental Owners Association (PAROA)
If the Portland overlay and the fee-waiver paperwork are eating time you do not have, PAROA membership keeps the current landlord forms and the helpline one call away. Join at www.paroa.org.
When screening, notices, and maintenance on a Portland Metro or Central Oregon portfolio start running the calendar, Northwest Real Estate and Property Management (NWRPM) takes the day-to-day so you stay the owner. www.nwrpm.com.
Sources
Portland.gov notice of temporary and draft permanent rules, Affordable Housing SDC Exemption Program
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