Proposed Transportation Charges Stifle Growth

By Ben Shelton

It’s fair to say growth should pay for itself. Yet, Portland city planners seem more and more willing to curtail development before it even begins.

Next year the city plans to impose two new transportation overlay charges in the Portland State University and Central Eastside districts. These new impact fees, which will be in addition to citywide transportation fees, will effectively double the transportation charges for development.

The Portland Bureau of Transportation calls these new overlays, and last year’s North Macadam overlay, “a new innovation.” But where the city sees innovation, developers see extra costs. The overlay scheme adds a layer of fees to the original transportation charges imposed in 1997, saddling developers with the cost of transportation projects like Milwaukie light rail. City planners hope the overlay charges will generate $20 million for this project alone.

These new fees come while cities around Oregon are cutting development charges to encourage growth. In spite of this statewide trend, Portland city officials claim that the new costs will not hamper development whatsoever.

If Portland wants development, it must abandon this faulty logic and lay aside the plan for new overlay charges. If transit projects like Milwaukie light rail are too expensive to fund with current fees, the city should give them up and seek more cost-effective alternatives.

Ben Shelton is a research associate at Cascade Policy Institute, Oregon’s free market public policy research organization.