Portland Permitting and Development — Part 1 of 2

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Breadcrumb: 4 ced › Community-and-EcDev---Vol-1 › Portland Permitting and Development

Portland Permitting and Development Community & Economic Development Service Area Portland Permitting and Development Donnie Oliveira, DCA - Community & Economic Development David Kuhnhausen, Interim Director Portland Permitting & Development 1.2% City Budget 98.8% Site Development 3.1% Public Infrastructure Permitting 12.7% Administration and Support 32.4% Plan Review 8.9% Neighborhood Inspections 3.1% Land Use Services 8.7% Combination Inspections 9.0% Development Services 8.8% Commercial Inspections 7.9% Compliance Services 5.4% Bureau Overview Requested Revised Total Change from Percent Requirements FY 2024-25 2025-26 Prior Year Change Operating $103,293,093 $97,418,852 $(5,874,241) (6)% Capital Total $103,293,093 $97,418,852 $(5,874,241) (6)% Authorized Positions 344.90 334.90 (10.00) (2.90)% City of Portland, Oregon - FY 2025-26 Requested Budget 11

Portland Permitting and Development Community & Economic Development Service Area Portland Permitting and Development Interim Bureau Director Director’s Executive Deputy Director Assistant David Kuhnhausen Budget & Finance Elshad Hajiyev Customer Public Public Works Building Hiring Equity & Director’s Land Use Building Code Infrastructure Support & Property Operations & Permitting Permit Digital Services Policy Office Services Review Development Permitting Compliance Administration Review Inspections Development Services Review Business Building Engineering Development Code & Policy Process Administration Commercial Administrative AMANDA Arts Administrative Official Structural Planning Development Improvement Permitting Support Support & Empowerment Support Review Development Services Development Program Environmental Building Design Engineering Communications Life Safety Review Commercial Development Cannabis Code Review Customer Cannabis Team Plan Review Electrical Hub PDX Licensing Appeals & Historic Permit Support & Facilitation Transportation Digital Resources Engineering Special Program Site Commercial Compliance Facilities & Review Business Review Projects Special Development Plumbing Services Fleet Services Empowered Projects Land Division Water Urban Process Communities Electronic Plan Performance & Development Forestry Management Commercial Program Dangerous Review Analytics & Environmental Review Structural/ Buildings & VI Water Continuous Mechanical Empowering Programs Records Records Inspections Improvement Engineering Neighborhoods Management Conversion Solutions Review Program Housing Safety & Facility Permit Inspections Emergency Pre-application Residential Program Management & Early Permitting Equity & Liquor Assistance Services Field Policy Dev Public Records Licensing Coordinator Inspection Coordination Solar Trades Remodel Recruitment Neighborhood Planning Addressing Program & Hiring Technology Inspections & Zoning & Success Remote Video Residential Small Business Noise/Title 18 Title Reinspection Specialty Empowerment Training & 33 Program Program Rental Workforce Inspection Development Residential Program Inspections Site Inspections Zoning Inspections 12 City of Portland, Oregon - FY 2025-26 Requested Budget

Portland Permitting and Development Community & Economic Development Service Area Bureau Summary Bureau Mission Portland Permitting and Development (Permitting & Development) promotes safety, livability, and economic vitality through the efficient and collaborative application of building and development codes. Bureau Overview General Description PP&D is instrumental in enhancing the safety of buildings and the livability and economic vitality of Portland’s neighborhoods and is an integral part of the City of Portland. The bureau’s stakeholders can be divided into three groups: those who are proposing development and directly seek bureau services (such as property owners, developers, architects and engineers), those who seek services to enforce regulations (tenants, neighbors, and others who make complaints about their own unsafe housing, or activities in their neighborhoods), and those who live, work and play in spaces that are regulated by codes PP&D administers, both now and in the future. PP&D is committed to eliminating racism and all discriminatory practices in service delivery and in the workplace because it understands the positive value of equitable systems. The bureau defines equity as conditions that allow everyone to flourish so that race, gender, ability, and other held identities do not determine access or outcomes. PP&D plays a crucial role in the development of the City of Portland through administering and enforcing State building codes and local development codes. Bureau staff works collaboratively with developers, builders, homeowners, neighborhood associations, and the community to guide and facilitate the development review process. The bureau prides itself on assisting customers from concept all the way through construction. PP&D manages programs that ensure construction and land use codes are consistently followed. To this end, staff review land use applications and construction plans, issue permits, and inspects industrial, commercial, and residential construction to ensure compliance. In addition to administering electrical, plumbing, mechanical, structural, and building codes, PP&D is also responsible for implementing many of the City’s locally adopted policies and regulations, including:  Zoning and land use  Tree preservation and planting in development situations  Site-related regulations such as erosion control and grading  Sign and mural regulations  Property Maintenance Codes  Cannabis and liquor licensing  Noise Code  Stormwater facility inspection  Public works project review  Source control review City of Portland, Oregon - FY 2025-26 Requested Budget 13

Portland Permitting and Development Community & Economic Development Service Area The bureau is also responsible for responding to code violations and working with customers to bring development into compliance with the codes. This Requested Budget includes 334.9 FTE and an operating budget of $84.7 million. Approximately 98% of the bureau’s ongoing revenues comes from permit fees and assessments. The remaining 2% comes from the City’s General Fund to support Liquor Licensing and a portion of PP&D’s local City Code enforcement programs, Neighborhood Inspections, and Noise Code Enforcement. Balancing Service Permitting & Development’s vision is to be the best development services agency in Provision and Fiscal the country by: Responsibility  Collaboration with City bureau partners. As of July 1, PP&D was formed with what was Bureau of Development Services (BDS) and development review programs from Portland Bureau of Transportation (PBOT), Bureau of Environmental Services (BES), Water, and Parks to improve City delivery of development review. While these functions have been unified under one entity, PP&D will continue partnering with the other City bureaus involved with development and permitting (PBOT, BES, Water, Fire, Parks, and Portland Housing Bureau) to staff and deploy programs, technology, and systems that meet the time-sensitive needs of the development industry  Addressing neighborhood and community members’ concerns about the quality of development and access to development-related information and services. This commitment to provide excellent and equitable programs and services is met within the context of a commitment to operate in a fiscally responsible manner. The bureau seeks to balance several goals:  Establish and achieve equitable and practical service level goals to ensure programs and services are effective, efficient, and equitable  Provide excellent programs and services and utilize technology to respond effectively to bureau customers’ and the community’s changing needs  Staff adequately to meet the needs of customers, stakeholders and community members  Pursue cost recovery for services whenever appropriate  Maintain prudent financial reserves to cushion the bureau against economic downturns  Set reasonable fees and keep any necessary fee increases as low as possible. In addition to maintaining service delivery (reviewing land use and permit applications, performing inspections, etc.) it is critical that the bureau dedicate ongoing funding for making improvements, including:  Utilizing technology to make services and processes efficient, convenient, user- friendly, and accessible;  Anticipating the need to adapt programs, services, and processes to meet changing needs; and  Identifying and implementing process improvements to gain efficiencies. 14 City of Portland, Oregon - FY 2025-26 Requested Budget

Portland Permitting and Development Community & Economic Development Service Area Bureau Revenues, In FY 1988-89, City Council established an operating fund for PP&D and charged Funding Sources, the bureau with fully supporting its State-mandated construction programs and Reserves through permit fees and charges. State statutes regulate these programs and, in most circumstances, prohibit their revenues from being used for City Code enforcement programs. PP&D works to maintain full cost recovery for many of its construction programs and services. The bureau implements gradual fee increases as needed to minimize the impact on customers and community members. The bureau achieved full cost recovery for its state-mandated programs from FY 2011- 12 through FY 2017-18. Until FY 2019-20, PP&D had not raised most of its fees since FY 2012-13 and reduced some fees in FY 2013-14 and FY 2016-17 in response to discussions with the development community, due to the bureau’s sustained high cost-recovery rate, and its healthy reserve balance. In FY 2024-25, the impacts of high interest rates, low investor confidence, a negative perception of Portland, and declining market values for properties in the downtown core have resulted in continued low levels of construction permitting activity. Reserves stood at $19.1 million on January 1, 2025, as the bureau has drawn at a rate of $1.0 million per month through the first half of FY 2024-25. PP&D implemented cost savings measures to slow the draw on reserves, including layoffs of contract workers, temporary workers, and employees under probationary status in November and December of 2023, and broader layoffs across all divisions of 56 FTE regular employees in January 2024, and an ongoing hiring freeze to further reduce expenditures through natural attrition. PP&D is expecting low project activity to continue into FY 2026-27. The requirement to be self-supporting, combined with the challenge of accurately predicting construction activity and fee revenues, makes it important for PP&D to maintain sufficient reserves to ensure bureau services remain stable when revenues fall below expectations. After the 2007-09 recession, PP&D strengthened its reserve goals and focused on rebuilding its reserves from FY 2010-11 through FY 2017-18. With the decrease in revenues, reserve levels have dropped for most programs, and overall reserve levels have declined since FY 2017-18. PP&D will continue to closely monitor reserve levels through FY 2024-25 into FY 2025-26. PP&D’s local City Code enforcement programs (Land Use Services, Neighborhood Inspections, Environmental Soils, Signs, Zoning Enforcement, Site Development, Noise, Liquor, Cannabis, Environmental Review, Transportation Review, Water Review, and Urban Forestry Review) are funded through a combination of program fees and fines, and do not receive support from State-mandated permit fee revenues. The Neighborhood Inspections Program is supplemented with crucial support from the City’s General Fund. PP&D’s advisory committees have consistently supported the ongoing use of General Fund monies to support the Neighborhood Inspections Program, in recognition of the benefits it delivers to the entire community. Noise and Liquor Licensing also receive a small amount of support from the City’s General Fund in combination with program fees. City of Portland, Oregon - FY 2025-26 Requested Budget 15

Portland Permitting and Development Community & Economic Development Service Area State Statutes and The City of Portland has been regulating construction since the late 1800s, with Administrative Rules local ordinances passed by the City Council as early as 1892. In 1973, the State legislature passed requirements for a State Building Code mandating uniform statewide enforcement, which required Portland to begin enforcing the State- adopted codes with State-certified personnel. PP&D is also responsible for administering a variety of local regulations adopted within the City Code, including the Zoning Code under Title 33, Floating Structures (Title 28), Erosion Control (Title 10), Signs (Title 32), and Property Maintenance (Title 29). The Public Infrastructure Review program administers portions of Trees (Title 11), Title 17 (Public Improvements) and Title 21 (Water). Additionally, PP&D administers the Noise, Cannabis Licensing, and Liquor Licensing programs. Executive Leadership Portland Permitting & Development is led by  Interim Director | David Kuhnhausen  Deputy Director | Elshad Hajiyev Major Work Groups Permitting Services, Reviews development proposals before construction, manages the flow of the Plan Review and permitting process, from intake and plan review to issuance and reviews proposed Land Use Services development for compliance with applicable regulations such as the City’s Zoning Code (Title 33). Public Works and Reviews private development proposals to ensure seamless integration with the Infrastructure City’s sewer and water lines, streets, sidewalks and tree canopy. Inspections Performs structural, electrical, plumbing, mechanical and zoning inspections on construction projects in Portland and urban unincorporated Multnomah County. Property Compliance Enforces regulations and administers the City’s Property Maintenance Code (Title 29) and Noise Control Code (Title 18) to protect and enhance the natural and built environment and to maintain and improve neighborhood livability. 16 City of Portland, Oregon - FY 2025-26 Requested Budget

Portland Permitting and Development Community & Economic Development Service Area Recent Accomplishments  Portland Permitting & Development was created by City council to unify the development review teams of five bureaus into one entity. It was also established to resolve conflicts and concerns more quickly, establish uniform customer service protocols across review teams and continue improving the timeliness of reviews and inspections.  Created the Portland Permit Metric Dashboard to help customers understand the average times involved in different phases of the permit review process and to uphold a commitment to transparency and responsiveness.  Provided pre-approved plans for detached accessory dwelling units that meet certain building code requirements. These efforts support the City’s housing goals and accelerate the customer’s time in the permitting process. Soon, pre- approved plans for other types of structures will be available.  Streamlined the online application process for permits to build new single- family homes, detached accessory dwelling units and solar systems. These improvements make the process more efficient and helpful for customers.  Adjusted requirements for seismic upgrades for office buildings seeking to convert to residential use. These building projects may waive system development charges, up to $3 million, as seismic upgrades are completed. The Permitting Services team works with building owners and their representatives to help navigate this process. Challenges & Opportunities Funding Portland Permitting & Development is mostly reliant on fee revenue to sustain its operations. This makes the bureau susceptible to significant economic changes that affect construction activity. The bureau needs to supplement its fee revenue with a more stable base of funding. Technology The future of permitting services relies on better online systems that are both efficient and user-friendly. Most community members expect to be able to access permitting services online. Changes are being made to create an updated organizational structure that is more effective and efficient in creating solutions, prioritizing and managing work, and creating a team approach. However, ongoing funding must be provided to ensure PP&D has both the capacity and capability to accelerate progress in developing and improving these online systems. Strategic Business End-to-end evaluations of practices and procedures within PP&D will map current Process Analysis processes, identify pain points, propose improvements, and set goals for implementation Downturn in In FY 2024-25, the impacts of high interest rates, low investor confidence, a negative Development perception of Portland, and declining market values for properties in the Activity downtown core have resulted in continued low levels of construction permitting activity. As a result, the bureau reserves have drawn down substantially. PP&D responded in Winter 2023/2024 with a staffing reduction, slowing the draw on reserves and enforcing a hiring freeze to further reduce expenditures through City of Portland, Oregon - FY 2025-26 Requested Budget 17

Portland Permitting and Development Community & Economic Development Service Area natural attrition. PP&D met with local economists on the PP&D Financial Advisory Committee in November 2024 and January 2025. This committee reviewed PP&D’s growth rate projections and advised that the current downturn is expected to extend an additional 18-24 months before PP&D experiences a sizeable increase in activity. Coming to City Council  PP&D brings its annual fees ordinance to the council each May prior to the start of the next fiscal year which begins on July 1. These fees cover most of the bureau’s services and factor into its budget request.  PP&D has more than a dozen advisory bodies, from the Design Commission to the Development Review Advisory Committee to various code appeal boards, appointments to which require City council approval.  The Code Amendment project is a cross-bureau effort intended to identify code conflicts that cause significant confusion and/or impediments in development and create a process to address these issues. What’s New or Different Vacancy Reduction PP&D is eliminating 12.0 FTE vacant positions in the FY 2025-26 Requested Budget. The downturn in development activity is expected to last 18-24 more months. This reduction in position authority recognizes this downturn through the elimination of vacant positions which are not expected to be filled in the foreseeable future. Realignments This Requested Budget includes reductions in PP&D position authority resulting from realignments within the City. These include realigning 2.0 FTE GIS Technician II positions within the Community & Economic Development Service Area from PP&D as part of an effort to consolidate GIS services under one team. In addition, 2.0 FTE, Business Systems Analyst III and Supervisor II, are being realigned from PP&D to BTS to serve in a Product Manager capacity within BTS. This move is a result of an FY 2024-25 budget note directing BTS and PP&D to develop organizational and budget recommendations addressing the future of permitting software development as an enterprise application team. 18 City of Portland, Oregon - FY 2025-26 Requested Budget

Parent: Community-and-EcDev---Vol-1 · PDF: pp. 531-538