3.5 Pay SDCs (or finalize the waiver / exemption) · Build a backyard cottage in Portland: the project workflow

Pay SDCs (or finalize the waiver / exemption)

Once plans clear, the SDCs you estimated back at 0.2 come due — or the ADU waiver / 2025-2028 exemption gets finalized and the bill drops to near zero. Either way, this gates permit issuance.

Who

Homeowner, Bureau of Environmental Services, Portland Water Bureau, PBOT

How long

1-2 weeks

Cost

~$0 (with waiver/exemption) to ~$18,000+ (full rate)

You end up with

SDC waiver/exemption recorded, or paid SDC receipts

If you skip this: PP&D requires SDC clearance before issuing the building permit — no negotiation room here. The eligibility call you made back at 0.2 is what determines whether this bill is a few hundred dollars or ~$18K-$25K.

What's happening

You ran the SDC calculation and the waiver/exemption check back at step 0.2. Now it's invoice-and-pay time. PP&D requires SDC clearance in hand before issuing the building permit, and there's no real negotiation room here — everything happens earlier.

The two paths

Path A: Waiver or exemption applies

File the ADU SDC Waiver application (if you haven't already) and execute the 10-year covenant. Per-bureau SDCs drop to near zero.
Or, if your permit issues between 2025-08-15 and 2028-09-30, confirm the citywide housing-SDC exemption is applied to your record.
The remaining bill is typically a few hundred dollars in administrative and pass-through fees.

Path B: Full rate

BES, PWB, PBOT, Parks, and the school district issue SDC invoices totaling roughly $18,000-$25,000 for a typical detached ADU based on PP&D's 2023 sample. Larger units, higher PBOT trip-generation rates, or stormwater above the SIM threshold can push it past $25K.
Pay in cash before permit issuance.

Cashflow timing (Path B)

The full-rate payment lands roughly 5-7 months into the project, several months before you have a building you can borrow against. Plan for it:

Construction loan: ask the lender if they'll fund SDC payment from loan draws. Some will; many require owner cash.
HELOC on the primary house: the most reliable bridge. Interest-only, accessible immediately.
Owner cash: simplest. Have it set aside before plan review starts.

Other ways to reduce (still limited)

Affordability covenant: a long-term deed restriction (typically 60 years) can substantially reduce certain SDCs. Real but consequential commitment.
Demolition credit: if you removed an existing dwelling unit, partial credit may apply.
Hardship deferral programs exist but are case-by-case.

After payment or waiver finalization

Receipts (or the recorded covenant) go into the permit file. PP&D issues the building permit, usually within a week of all SDC items clearing and all plan-review comments resolved.