June 14, 2017

Mayor Ted Wheeler, MayorWheeler@portlandoregon.gov
Commissioner Nick Fish, nick@portlandoregon.gov
Commissioner Amanda Fritz, Amanda@portlandoregon.gov
Commissioner Chloe Eudaly, chloe@portlandoregon.gov
Commissioner Dan Saltzman, dan@portlandoregon.gov

RE: Transportation System Development Charge Update

Dear Mayor and Commissioners:

The Cully Association of Neighbors would like to offer comments on the Transportation System Development Charge (TSDC) Update.

As background, the Cully neighborhood was annexed to the City in 1985. Consequently, we share with East Portland a lack of adequate transportation infrastructure such as sidewalks, safe bike routes, paved streets, and connectivity. We are therefore pleased that a number of projects important to our neighborhood are proposed to be eligible for TSDC funding. At the same time, we are aware that transportation improvements, while needed and desirable, make our neighborhood more attractive to developers, investors and home buyers, driving up prices and exacerbating displacement.

Due to these pressures we, adopted an Inclusive Cully Policy which proposes a variety of strategies, including:
• Encourage moderately-priced individual homeownership.
• Encourage renters to become homeowners to build wealth and stabilize families.
• Encourage alternative designs for infill such as accessory dwelling units, small house “cottage clusters,” and other strategies to promote more affordable, market-rate, infill housing.
All of these strategies could be served by a slightly amended rate schedule for TSDCs.

The proposed rate schedule offers three rates for residential development—single family, single family less than 1000 square feet, and multi-family. The rate for a small house is half the rate for a larger house and virtually the same as an apartment. We appreciate that the proposal acknowledges the need to incentivize smaller housing units. As it stands, however, the proposal does not accomplish that. The only housing that will be built smaller than 1000 square feet is an ADU, so there is no incentive to build smaller, market rate housing. Meanwhile, the apartment rate means that a 4000 square foot penthouse will actually pay a little less than an ADU.

Proposed Residential Transportation SDC Rates
Residential Dwelling Non-Central City Rate per Dwelling Unit Central City
Rate per Dwelling Unit
(20% reduction)
Single Family $5,141 $4113
Single Family < 1,000 Sq. Ft. $2,570 $2056 Multiple Family $2,504 $2003 The rate schedule for Parks SDCs, adopted in 2014, offers a good example. It lists five residential rates for different sized units, regardless of whether they are single or multi-family. This rate structure creates a clear incentive for developers to build smaller, and therefore more affordable housing. Size of Residential Dwelling Non-Central City Rate per Dwelling Unit Central City Rate per Dwelling Unit Less than 700 square feet $5,772 $4,648 700-1199 square feet $8,634 $6,953 1200-1699 square feet $10,381 $8,359 1700-2199 square feet $11,787 $9,491 2200 or more square feet $13,049 $10,507 We understand and support the new methodology, using “person trips” to calculate TSDC rates. The Parks Bureau already has a study showing that larger dwelling units have more people in them, on average. It is intuitively obvious that more people results in more person trips. We hope that the TSDC will follow Parks’ lead in adopting a rate schedule that offers true incentives for smaller units. This could set the precedent that other bureaus will follow in setting SDC rates. We fully expect that such a system will encourage the development of more affordable housing, in Cully and throughout the City. Sincerely, Laura Young, Chair On behalf of the Cully Association of Neighbors