Struggling to find funding for improvements to the city of Lake Oswego’s infrastructure, the City Council is considering creating a fund paid into by developers that would go toward projects like pathways or stormwater facilities.
In a work session Tuesday, March 19, the council deliberated the efficacy of charging an additional fee to developers of single-family homes and duplexes so that it could incrementally improve areas of town lacking pathways or adequate stormwater facilities. The city has identified many millions of dollars worth of such projects but cannot fund most of them anytime soon.
The discussion came after the council decided in 2023 to require developers of middle housing (like triplexes and quadplexes) to build these types of infrastructure. When the council came to that decision, it also directed staff to bring forward options for adding similar requirements for the less dense housing types.
At the meeting Tuesday, the council felt it was more practical to establish a fund than to simply require improvements upon development. The council felt this would allow the city to complete full infrastructure projects rather than having a piecemeal of developer-completed projects. The effectiveness of this program would depend on how quickly development or redevelopment happens; the city has approved an average of 58 residential building permits per year in the last five years.
The city previously shifted its focus to pedestrian improvements in 2022 by raising the street maintenance fee to pay for projects.
“It’s kind of shocking that we allowed all of this development to occur (over decades) without requiring any of these improvements. And now we see the on-the-ground consequences of it every day. And we hear from residents every day about pedestrian safety, the stormwater issues that have been caused by this,” Mayor Joe Buck said at the meeting.
Councilor John Wendland, however, opposed the idea of imposing an additional fee on developers, saying that it will only lead to higher housing prices.
“I would rather funding sources apply to everyone rather than people in development. I see this as a big increase in housing costs and I think we need to go the other direction,” Wendland said.
The developer-paid fee program would also come with complications. For one, staff noted that, legally, the money would have to go toward a project that mitigates the impact of the development. City engineer Erica Rooney said a whole neighborhood in certain instances could be considered a zone where funding sources are collected and used, but that money collected on one side of town could not be transferred to projects on the other side. Further, it will take ample staff time and planning to establish zones where money could be spent.
“You have to do a lot of work to set up those areas, identify the projects the money would be used for and then start collecting,” she said.
City Manager Martha Bennett said staff would bring back a more detailed assessment of such a program and how much money it would likely collect, as well as projected administrative costs, at a later date.
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