SDCs & Excise Taxes - City of Happy Valley
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SDCs & Excise Taxes

SDC Notice

Rates Shown for New Dwelling Permits

Increase in system development charges

July 1, 2025

TSDC from $12,556 to $12,779

PSDC from $10,296 to $10,479


What Are System Development Charges (SDCs)?

System development charges are fees paid by new development to recover a portion of the cost of existing infrastructure and to help fund the new infrastructure necessary to serve new development. Infrastructure includes streets, the water system, sanitary and storm sewers, and parks. There are two main parts to each SDC, a reimbursement fee, and an improvement fee.  The reimbursement fee is the cost to “buy into” existing capital investment in infrastructure.  The improvement fee is the cost to fund new infrastructure made necessary by new development. SDCs are collected at the time a building permit is issued for new construction.  Existing developed properties also pay SDCs when connecting to the sanitary or storm sewers.  An incremental SDC is collected when the use of a devel­oped property intensifies—for example, requiring a larger water meter or creating a larger impervious surface area.

How Are SDCs Calculated?

SDCs are calculated by consider­ing:

  1. The replacement cost of existing public facilities;
  2. Prior contributions of the property owner to the public facility system;
  3. Public facility capacity require­ments of a particular develop­ment, and;
  4. The cost of capital improvements to provide adequate capacity to new users.
SDCs in Happy Valley

SDCs paid by development in Happy Valley are:

  • Transportation, Parks, and City Storm Drainage SDCs collected and managed by the City, including an administrative charge.
  • Surface Water and Sanitary Sewer SDCs collected and managed by Clackamas County Water Environment Services.
  • Domestic Water SDCs collected and managed by the water provider (mainly Sunrise Water Authority, but in limited areas of the City, by Clackamas River Water).

Questions regarding SDCs collected and administered by utility service providers should be directed to the specific service provider.

Current SDC Charges

Transportation and Parks SDCs are adjusted each year for inflation based on the regional Construction Cost Index (CCI) for Seattle.

Current SDC rates for a Single Family (Detached) Home:
  • Transportation: $12,779
  • Parks: $10,479
  • City Storm Drainage: $216
  • Surface Water (WES): $265
  • Sanitary Sewer (WES) – based on 2,500sf residence: $9,375
Construction Excise Taxes (CET) in Happy Valley

CETs have been implemented by both the regional government (Metro) and the North Clackamas (NCSD#12) and Centennial School Districts. Currently, the Metro CET equals $0.0012 of the value of improvements for which the permit is sought. Projects under $100,000 in value are exempted, projects over $10,000,000 have a maximum flat fee of $12,000. The School Districts CET equal $1.67 per square-foot for residential, and $0.84 per square-foot for non-residential structures with a maximum of $41,800.

Building Permit fees

Building permit fees for single family homes vary based on the size of the home. For a 2,500 sf residence with 450 sf garage, the average building permit fees would be $7,355.

Total fees, including SDCs and CETs for a typical 2,500 square foot residence would be $58,364. See breakdown below.

  • SDC: $46,291
  • CET: $4,718
  • Building Permits: $7,355

This is a general example. Calculations will vary for different square footage, housing types and non-residential uses.

For More Information

If you would like more information regarding SDCs, please contact the Economic and Community Development Director, Michael Walter, AICP, at [email protected] or 503-886-8439.

For specific questions relating to transportation SDCs, please contact the City Engineer, Sally Curran, at [email protected] or 503-886-8414

For building permit fee questions, please contact the City’s Building Division at [email protected] or call the main phone line at 503-783-3800 and request to speak to a permit tech.