Neighborhoods subsidizing downtown

This afternoon’s Portland City Council Agenda features an item regarding transportation Systems Development Charges (SDCs), and there was recently a hearing on ending the so-called “transit-oriented development” subsidy of tax breaks given to new homes along bus and fixed rail lines. Jim Redden in the Tribune last week detailed some of the financial contributions of neighborhoods outside of the Central City to helping subsidize condominium development downtown. From Jim’s article:

* Downtown construction projects received around $4 in benefits for every $1 paid in charges, between 1997 and 2006.

* Almost every other section of town received less money back than it paid into the city’s System Development Charges account. The only other exception was Northeast Portland, which paid almost $7 million in charges and received just under $8 million back.

* Outer Northeast Portland paid just under $6 million in charges and received just over $1 million back.

* Southeast Portland paid around $6.5 million in charges,received less than $2 million back.

* Southwest Portland received only approximately 28 percent of its System Development Charges transportation funds back.

* Downtown developers received almost $10 million worth of transportation-related System Development Charges discounts over the last 10 years — while being assessed just under $5 million in charges.

* In the rest of the city, discounts to developers ranged from a high of just over $800,000 in Southeast Portland to a low of almost $73,000 in North Portland.

As I mentioned in Next Up at City Council yesterday, the City is also reviewing the list of projects eligible for Systems Development Charge money. Jim reports of the advisory committee’s recommendation:

“It is proposing a new list of 43 projects throughout the city, with a price tag estimated at more than $414 million.

Many of the most expensive projects on the list are in the central city, including more than $100 million for the east and west side Burnside/Couch couplets, more than $18 million for street improvements in the South Waterfront, and $7.3 million for the east-side streetcar line.

The committee does not know the amount of transportation-related charges that would go into each project. Those decisions will be made on a project-by-project basis.”

It seems to me the slicing of the Systems Development Charges pie ought to be decided as a policy matter, up front, by the Council – at least in terms of the size of the chunk to be returned to each district. Systems Development Charges are supposed to pay for increased capacity required by the new construction generating the fees. It’s not right that so much should be directed away from the neighborhoods seeing the growth in new homes. Communities outside of downtown have transportation infrastructure needs that deserve allocation of more of the funds generated within those areas. Leave the individual project charges/shares to be determined later, but each area should be assigned a budget, a pot of money that doesn’t get raided to fund projects in the Central City.