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Finance 101: System Development Charges

by Robby Hammond, Hillsboro City Manager

Post Date:09/09/2024

What does it mean when we say... “We want growth to pay for itself” or "We ask developers to pay their fair share for the cost of providing services."

Before new homes or non-residential buildings are built, developers pay the costs for increasing the number of people using the services and systems we all rely on, including:

Water
Sewer
Parks & Recreation
Surface Water Management
Transportation (streets & sidewalks)

For example, look at a newer neighborhood, like South Hillsboro, where thousands of new homes have been built in recent years. These newly constructed homes have increased our housing supply as demand continues to grow, and they have allowed us to welcome some awesome new neighbors.

South Hillsboro

Adding more neighbors and workers in Hillsboro means we need more capacity to deliver services to people. To create that extra capacity with new projects, cities in Oregon are allowed to charge what are known as System Development Charges (SDCs).

Developers pay these SDCs, which are typically added into the price of construction. The City works to manage costs and study the precise amount of funding needed to maintain services. In Hillsboro, this allows us to have:

Safe, clean, and reliable drinking water
Well-maintained streets, pipes, and other infrastructure
Some of the best parks and recreational facilities in the Pacific Northwest

We enjoy these services every day in large part because of SDCs paid by developers. Without SDCs, all Hillsboro residents would have to pay more for the new growth. That’s why we say we want "growth to pay for itself” and developers should “pay their fair share.”

Public Works