Southeast Bend developers will pay new fee for local road upgrades through SDC

(Update: adding council meeting outcome, comments from City of Bend chief operating officer)

BEND, Ore. (KTVZ) -- The Bend City Council approved a new transportation fee Wednesday night for future development in a specific part of southeast Bend, creating a shared way to pay for road projects the city says will be needed as the area grows.

The council approved the supplemental transportation system development charge, or SDC, without opposition during its October 7th meeting. The resolution took effect upon adoption⁠.

What is an SDC?

System development charges are one-time fees imposed on new development, generally when a building permit is issued. The money, paid by the permit applicant, helps pay for infrastructure needed to serve growth, including transportation, water, and sewer projects.

“Citywide system development charges help pay for large-scale, systemwide improvements that are needed because of growth,” City of Bend Chief Operating Officer Russ Grayson told KTVZ. “And then the supplemental transportation SDC is to help pay for project-specific improvements.”

The new supplemental charge is separate from Bend’s existing citywide transportation, water, and sewer SDCs and the supplemental sewer fee already in place for the southeast area.

It applies only to new development within a mapped section of southeast Bend⁠, generally bounded by Southeast 15th Street, Ferguson Road, Southeast 27th Street, and Knott Road.

Owners of existing homes and businesses will not receive a new standalone bill simply because the fee was adopted. It will be assessed when applicable new development seeks a building permit. If a developer pays the charge while building a new home, however, that expense could ultimately be factored into the home’s sale price.

How much will development pay?

The city calculated a base charge of $3,323 for each evening peak-hour vehicle trip a project is expected to generate. After adding an administrative and compliance fee, the adopted rate is $3,389 per projected trip.

The amount charged to an individual project will depend on its size and use.

The city’s adopted fee schedule⁠ lists an average supplemental charge of $3,084 for single-unit and middle housing. Residential tiers range from $1,830 for a dwelling smaller than 600 square feet to $3,626 for one larger than 3,001 square feet. Multi-unit housing with more than four units is listed at $1,762 per dwelling.

Rates for businesses and other nonresidential development vary more widely because they are based on the type of use and the traffic it is expected to generate.

Housing affordable to households earning 80% or less of area median income, homeless shelters, and childcare facilities are exempt from the supplemental fee. Bend also offers SDC deferrals and five- or 10-year installment loans⁠ for qualifying projects.

Why did Bend create another fee?

The Southeast Area Plan covers land divided among multiple property owners. According to city council materials⁠, area owners, developers, and the Central Oregon Builders Association asked the city to create the fee so the cost of shared road improvements would be distributed among the developments expected to benefit.

Without that system, one developer could be required to spend millions of dollars upfront on a roundabout or road improvement that would eventually serve several developments. Others might wait for that project to be completed before moving forward.

“In theory, it allows everybody to move faster, and not one development is saddled with that initial capital outlay to go build the two-, three- or four-million-dollar roundabout,” Grayson said. “They only pay as development occurs.”

What will the money fund?

The city estimates the fee will generate $13.33 million for three components of the southeast transportation network:

• $4 million for a roundabout at Southeast 27th Street and Southeast Caldera Drive, also known as Diamondback Way;
• $2.5 million for an internal roundabout at Southeast Caldera Drive and Southeast Journey Way; and
• $6.83 million toward bringing portions of Southeast 27th Street and Knott Road, from Ledger Lane to Ferguson Road, to current urban standards.

The supplemental fee will cover 36% of the eligible Knott Road and 27th Street work, while the city’s existing citywide transportation SDC project list accounts for the remaining 64%, according to the city’s methodology report⁠.

Revenue from the new charge can be spent only on the projects in the adopted list. 

Approval of the fee does not mean construction will begin immediately. The city will collect revenue as development occurs, then program and prioritize the projects through its transportation capital planning process when the work is warranted.

The city can adjust the charge annually for inflation. Grayson said staff will also monitor the pace of development and actual revenue to determine whether the assumptions behind the fee remain accurate.

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Earlier Story -- October 7th, 2026 -- BEND, Ore. (KTVZ) -- Future development in a growing section of southeast Bend could soon face an additional fee, intended to help pay for new roads and other transportation improvements.

This evening, the Bend City Council will hold a public hearing on a proposed supplemental transportation system development charge (SDC) for the Southeast Area Plan. SDCs are a one-time fee, generally collected when a building permit is issued; the proposed charge would distribute the cost of major shared transportation projects among future developments expected to benefit from them.

According to the agenda, councilors are expected to consider adopting the fee at Wednesday's hearing.

The proposal is not approval of a specific subdivision or development -- it would apply to future projects within a mapped area, generally bordered by SE 15th Street, Ferguson Road, SE 27th Street, and Knott Road.

The amount paid by each project or development would vary based on the size and type of development and the traffic its expected to generate.

The new charge would be added to existing citywide transportation, water, and sewer SDCs, as well as a separate supplemental sewer fee already established for the SE area. Certain affordable housing, homeless shelters, and childcare facilities would be exempt.

The Bend City Council business meeting begins at 6:00 p.m. at Bend City Hall. People can attend or testify in person, while those who want to testify remotely must register for the Zoom meeting before 6:00 p.m. Written comments can also be emailed to council@bendoregon.gov.