Milwaukie City Council Work Session on Transportation System Development Charges (SDCs) – September 1, 2026

The Milwaukie City Council held a work session on September 1, 2026, to discuss the methodology for updating Transportation System Development Charges (SDCs). Staff presented two scenarios for calculating the maximum allowable charge: one based on all eligible projects from the Transportation System Plan (TSP) and one based only on the financially constrained project list. Council members debated the appropriate project list, scaling of charges by dwelling unit size, and potential transit proximity discounts.

Discussion Items

• SDC Overview and Methodology: Staff (Peter Pascarelli, John, Zach) explained SDC basics: one-time charges paid at development to fund capital projects, divided into reimbursement fees (buy-in to existing capacity) and improvement fees (future growth-related projects). Growth is measured in PM peak hour person trip ends.
• Two Scenarios Presented:
  • All eligible projects (full TSP list): maximum charge of $14,560 per single-family dwelling unit.
  • Financially constrained project list (7% of total project list): maximum charge of $3,943 per single-family dwelling unit. Current SDC for single-family is $2,740. The constrained list represents a 59% increase; the full list a 489% increase.
• Scaling by Dwelling Unit Size: Staff proposed scaling the SDC based on square footage, similar to existing water/wastewater SDCs. A slide showed potential charges for units under 500 sq ft ($2,366) to over 3,500 sq ft ($7,829) compared to a uniform $3,943. Council discussed whether middle housing (e.g., duplexes, triplexes, ADUs) should have a separate reduced factor or be included in the same square footage scaling. Councilor Em argued that the ITE manual shows lower trip generation for multi-family, but staff noted that scaling by square footage is more defensible and simpler. Consensus emerged to scale all residential (including middle housing) by square footage, not by separate typology.
• Transit Proximity Discount: Staff presented examples from Oregon City (10% reduction along specific corridors) and Eugene (5–10% reduction within half or quarter mile of transit). Council debated whether to include such a discount. Some favored more information, while others opposed another work session. The mayor suggested potentially adding options without a separate work session, but no final decision was made.
• Concerns About Impact on Businesses: Council members expressed worry that a significant increase (even 59%) would burden small businesses. They noted that developers often pass SDC costs to tenants, but some argued that the city’s current rates are among the lowest in the region. The constrained list would keep Milwaukee in the bottom four of comparable jurisdictions.

Key Outcomes

• Project List: Council reached a majority consensus to base the SDC methodology on the financially constrained project list (maximum $3,943 per single-family unit). This allows a 59% increase over current rates but provides a clear, achievable capital plan. Some council members (e.g., Mayor) preferred a buffer above the constrained list, but the consensus was to use the constrained list as the ceiling.
• Scaling: Council directed staff to develop a residential SDC scaled by dwelling unit square footage for all housing types (including middle housing), consistent with the approach used for water and wastewater SDCs. No separate reduced factor for middle housing will be applied.
• Transit Proximity Discount: Council did not make a final decision. Staff was asked to return with more information on options and potential impacts, possibly without requiring an additional work session.
• Next Steps: Staff will revise the methodology based on council direction, prepare a 90-day public notice, and schedule a public hearing for adoption. Council may hold one more work session if needed to finalize transit discount details.