City Council grapples with SDCs, housing

Current development projects are in progress or near completion in Sisters and are expected to move the needle somewhat on housing affordability - but deficits remain, especially in workforce housing.

In the Sisters City Council's workshop meeting of January 22, Regional Economist Nicole Ramos, reporting on Sisters' demographics, suggested the lack of workforce housing is likely why two-thirds of Sisters' 1,945 workers commute.

When developers assess affordable or low-income housing projects, their estimates find the projects are not financially viable. Because of this and housing deficits, there are incentive programs available from federal, state, and county to make housing both affordable to buyers and profitable to developers. There are also incentives which cities can offer to attract development of low-income, affordable, or workforce housing.

Photo by Susan Cobb

The Grove is a multi-family housing development that is designed to ease the workforce housing crunch in Sisters.

In recent years, the City of Sisters has been asked by developers if the City's Development Code allows for a deferral of System Development Charges (SDCs). The answer has been no. SDCs are what developers pay to cover their portion of a city's expense to expand public facilities into formerly undeveloped properties.

Sisters Associate Planner, Emelia Shoup, presented background on the advantages and disadvantages of deferring SDCs, gave examples of other cities' deferral programs, a list of recommended strategies, and a draft of applicable changes to Development Code, Chapter 13.25 SDCs. Shoup's documentation may be found at http://www.ci.sisters.or.us; click Agendas & Minutes-Recent Meetings-Jan. 22 Agenda Packets or click on video (Shoup starts 40 minutes into the video).

Councilors Michael Preedin and Gary Ross suggested opening the deferral incentive to include workforce housing to fill that deficit. The draft by staff was incentivizing development of "affordable housing," which means selling at a price affordable to those earning 80 percent or lower of Average Median Income (AMI) in the local area. "Workforce Housing" widens the developer's price range of homes built to those earning 150 percent of AMI or lower. After some discussion, the Council gave a nod to this change.

Mayor Jennifer Letz asked what developers might pay in SDCs. Shoup noted it could cost from $13,000 for single family projects to $300,000 or more for large efforts such as multi-family housing projects. Council will need to decide if what the SDCs developers will pay is to be calculated based on rates at the time of signing the agreement, or the rates when the deferred payment comes due, which could be higher. Staff will present council these two alternative changes to Chapter 13.25, to expedite their final decision, perhaps in February.