Builders say fees still going up as home sales fall

Association study finds local government charges add to cost of new homes

By Steve Law

The Portland Tribune, May 6, 2009, Updated Oct 30, 2009 (17 Reader comments)

Tribune File Photo

The Home Builders Association of Metropolitan Portland says a new study shows that system development charges continue to go up as regional home sales stall, hitting builders and buyers hard in the wallet.

As the price of housing droops in the Portland area, development fees levied on new homes being built continue to rise, according to a new study by the Home Builders Association of Metropolitan Portland.

The study found that local governments in the Portland area are charging homebuilders an average of $14,323 in “systems development charges” for a typical new home, or about 7 percent of the price of the home.

System development charges are levied on homebuilders by cities, counties and special service districts to cover the need for roads, sewers, storm drainage, water service and parks.

Homebuilders found that development charges amounted to about 3 percent of the cost of a new home in Washington County in 1999, but now are up to 7.5 percent to 8 percent in the county, said Ernie Platt, the association’s director of local governmental affairs and the man who compiles the annual survey.

“It’s becoming disproportionate to the price of a house and onerous to the buyer of a home,” Platt said.

Homebuilders are pleading with local governments to abate some fees, to spur more housing development during the recession. But that’s not flying. Instead, development fees appear to rise steadily each year, sometimes according to indexes pegged to inflation.

“They never go down,” Platt said.

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