Portland’s Incentive Stack: What It Covers, and When It Ends
Portland is waiving system development charges (SDCs) on new housing for every building permit issued from August 15, 2025 through September 30, 2028. In its first year, the waiver covered 2,871 new units and will cost the City more than $50.9 million in forgone fees if all of them qualify. The bigger number is property tax. Since March 2024, the 10-year MULTE exemption covers every unit in a qualifying building, market-rate included, worth about $2,500 per unit per year on average. Together they lower the cost of a new Portland apartment building on a fixed timetable, and the timetable ends.
Source: City of Portland, October 12, 2026. Data through August 14, 2026.
Four charges, waived.Through September 2028.
City Council passed Ordinance 192082 on July 16, 2025. It exempts new dwelling units from the four one-time SDCs that Portland charges to pay for infrastructure: sewer and stormwater (Environmental Services), water, parks, and transportation (City of Portland, Housing SDC Exemption).
What qualifies
New apartments, middle housing, congregate living, additions that create units, and conversions such as office to housing. There is no affordability requirement, so market-rate units qualify. In a mixed-use building, only the residential portion is exempt, except the stormwater and water-meter charges, which are exempt for the whole development.
What does not
Accessory dwelling units (they have a separate waiver), caretaker quarters, and transient lodging. The waiver does not cover the Construction Excise Tax or permit review fees. Permits issued before August 15, 2025 cannot be exempted after the fact.
The condition
A project must pass its foundation or concrete-pour inspection (insulation and vapor barrier for conversions) within 12 months of permit issuance, or post a completion guarantee from a financial institution before the permit issues. Miss the milestone and the City can bill the SDCs back, at the rates in effect when the application was complete, before the certificate of occupancy.
Dividing the City's estimates gives roughly $18,000 to $25,000 per unit: $63 million in forgone revenue over three years across 2,559 forecast units at adoption, and more than $50.9 million across the 2,871 units covered in year one if all of them qualify. Actual savings depend on unit size and location.
What the waiver produced.Permits, by stage.
The City reported to Council on October 6, 2026, using data through August 14.
| Stage | Units |
|---|---|
| Covered by permit applications | 2,871 |
| Enrolled, permit not yet issued | 1,687 |
| Permit issued, not yet qualified | 208 |
| Permit issued and exemption received | 976 |
Source: City of Portland, October 12, 2026.
Of 45 developers and owners who answered the City's survey, 80% rated the SDC exemption a high or very high factor in their decision to build, ahead of market conditions (60%), zoning and code (52%), interest rates (43%) and labor and materials costs (23%). At least 68% of their projects avoided a delay or cancellation because of it.
$2,500 a unit.Every year, for 10 years.
MULTE, the Multiple-Unit Limited Tax Exemption, removes property tax on the residential improvements of qualifying new buildings for 10 years. Land and commercial space stay taxable (Portland Housing Bureau, MULTE).
Seneca estimates the residential property tax on a new Portland apartment at about $2,500 per unit per year on average; the actual bill depends on assessed value and location. At the 2026-27 combined rate for City of Portland levy code 001, $27.5984 per $1,000 of assessed value, that average matches residential improvements assessed at roughly $91,000 per unit (Multnomah County, 2026-27 levy code rates). Under MULTE, that bill is waived for a decade.
Seneca estimate: $2,500 per unit per year times 68 units, held flat over 10 years. Actual bills depend on the assessor's value, levy code and rate changes.
That gap is the point. A 68-unit building completed without the exemption keeps paying about $170,000 a year on its residential improvements. A new building that qualifies pays none of it for 10 years, so two buildings on the same block can carry very different operating costs.
What changed in March 2024.
Portland's Inclusionary Housing rules require buildings of 20 or more units to set aside 20% of units at 80% of median family income, or 10% at 60% (Portland City Code 3.103.040). Before March 1, 2024, outside the Central City, MULTE exempted only those affordable units. The market-rate units, typically about 90% of the building, paid full property tax.
Since March 1, 2024, in eligible neighborhoods outside the Central City, the same commitment of 10% of units at 60% of median income exempts every residential unit in the building, market-rate included, per the City's February 2024 presentation to Multnomah County and the Housing Bureau's MULTE matrix. Ordinance 191610 extended the exemption to these developments. The affordability commitment did not change. The share of the building that pays no property tax went from about 10% to 100%. In the Central City, the exemption could already cover all residential units. For the full rules, see Portland's 10-Year Property Tax Abatement.
A state law, and a deadline.2026 to 2028.
In March 2026, the Oregon Legislature passed SB 1521, which requires cities that mandate inclusionary zoning to fully offset its cost through cash, tax exemptions or fee waivers (Ballard Spahr, March 2026). The Portland Housing Bureau says it is working on compliance.
The SDC exemption itself has a calendar sunset. Permits issued after September 30, 2028 pay full SDCs unless Council acts again. No extension had been adopted as of October 2026.
The incentives arrive while new supply is falling. Portland is on track to deliver about 2,200 new apartments in 2026, less than half of 2025's total (Northmarq, 2026).
Building Portland.From the ground up.
A vertically integrated multifamily developer in Portland, Oregon, building ground-up apartments with construction and property management in-house. Seneca raises capital under Rule 506(c) from verified accredited investors only.
Become an investorFrequently asked.
Does Portland's SDC waiver apply to market-rate apartments?
Yes. The exemption has no affordability requirement. Any new dwelling unit on a building permit issued from August 15, 2025 through September 30, 2028 can qualify, subject to the 12-month foundation milestone.
Does the property tax exemption cover market-rate units?
Yes, since March 1, 2024, in eligible neighborhoods. A building that sets aside 10% of units at 60% of median income gets a 10-year exemption on all of its residential units, not only the affordable ones. Before that change, outside the Central City, only the affordable units were exempt.
Which fees does the waiver not cover?
The Construction Excise Tax, permit review fees and other one-time fees. Accessory dwelling units use a separate waiver.
Can a project lose the exemption?
Yes. If it misses the foundation or concrete-pour inspection within 12 months of permit issuance and has no completion guarantee in place, the City can collect the SDCs before the certificate of occupancy.
This article is for educational and informational purposes only. It is not an offer to sell, or a solicitation of an offer to buy, any security. Any offer will be made only by a private placement memorandum and related subscription documents, and only to investors whose accredited investor status Seneca has verified. Investments in private real estate development are speculative and illiquid and involve a high degree of risk, including the loss of some or all principal. Program rules change; confirm current terms with the City of Portland. Nothing here is financial, legal or tax advice.
Sources- City of Portland, first-year report on the housing SDC exemption, October 12, 2026
- Ordinance 192082
- City of Portland, Housing SDC Exemption
- Portland Housing Bureau, MULTE
- Portland City Code 3.103, Inclusionary Housing and MULTE
- Sightline Institute, Portland inclusionary zoning
- Ballard Spahr, SB 1521
- Northmarq, Portland multifamily completions