Transcript
Automatically generated transcript. It may contain errors and includes testimony in languages other than English that is not individually marked up for assistive technology.
Josh Roper
All right, we're starting.
Candace Avalos
Good afternoon.
I am going to call the meeting of the Housing and Permitting Committee to order at 2:02 PM on Tuesday, June 6th, good afternoon.
Diego
Pirtle-Guiney?
Elana Pirtle-Guiney
Absent.
Diego
Koyama Lane?
Tiffany Koyama Lane
Here.
Diego
Novick?
Steve Novick
Here.
Diego
Green?
Mitch Green
Here.
Diego
Avalos?
Candace Avalos
Present.
Clerk, please read the statement of conduct.
Rebecca Dobert
Thank you, Chair.
Good afternoon and welcome to the meeting of the Housing and Permitting Committee.
To testify before this committee in person or virtually, you must sign up in advance on the committee agenda at portland.gov/councilmeetingrequest.
Registration for virtual testimony closes 1 hour prior to the meeting.
In-person testifiers must sign up before the agenda item is heard.
If public testimony will be taken on an item, individuals may testify for 3 minutes unless the chair states otherwise.
Your microphone will be muted when your time is over.
The chair preserves order.
Disruptive conduct such as shouting, refusing to conclude your testimony when your time is up, Or interrupting others' testimony or committee deliberations will not be allowed.
If you cause a disruption, a warning will be given.
Further disruption will result in ejection from the meeting.
Anyone who fails to leave once ejected is subject to arrest for trespass.
Additionally, the committee may take a short recess and reconvene virtually.
Your testimony should address the matter being considered.
When testifying, state your name for the record.
If you are a lobbyist, identify the organization you represent.
And finally, virtual testifiers should unmute themselves when the clerk calls your name.
Elana Pirtle-Guiney
Thank you.
Candace Avalos
Thank you, Claire.
We have 4 main items on today's agenda.
First, we will have time for public comment on housing and permitting issues of concern or interest.
Then we will hear a resolution on Phase 2 of the Code Alignment Project.
And then we have 2 ordinances from the Housing Bureau.
Before we get to those items though, we need to adopt committee minutes for our meetings on April 7th and May 5th.
So these minutes are approved by an unanimous consent.
Are there any objections?
With no objection, the minutes are approved.
Diego, please read item 2.
Diego
Item 2, Housing and Permitting Community Feedback.
Candace Avalos
All right, so now we are going to hear from community members on their feedback for our committee.
Um, each testifier will have 3 minutes.
Diego, go ahead and call up the first person.
Diego
First we have Lacy Sutton, followed by Michael Harrison.
Candace Avalos
Thank you.
Go ahead and introduce yourself and go ahead.
Lacey Sutton
Lacey Sutton.
Um, so I found what I believe is a loophole in Title 33, and unlike most of the problems I come here to tell you about, this one could be pretty easily fixed with the addition of one sentence: a follow-up pre-application conference will be required if the project changes significantly from what was originally presented.
That's in Gresham's code and a lot of other city codes, but so far as I can tell, we don't We don't have anything like that in ours.
If we did, then I wouldn't have to be here today because I think this omission laid the groundwork for all our other problems at Cherry Blossom years after Habitat for Humanity purchased the property.
Let me explain, try, in 3 minutes.
In 2014, the city held a pre-app to discuss the development of 30 2-story houses.
Kerry Schimmel, who's now our fire marshal, reviewed those plans, and when the architect submitted the application for Type 3 design review, he included the fire code requirements she discussed at that meeting, but due to missing information, the application was placed on a 180-day hold.
After that, they requested 2 consecutive 100— or sorry, 120-day extensions as they proposed several entirely different developments, including a 5-story, 146-unit apartment building, which the Mill Park neighborhood rejected.
Finally, the Design Commission held a DAR to consider 31 townhome-style apartments.
During this recorded meeting, they discussed fire code requirements.
At one point, a commission commissioner asked, how are you getting away with that dead end for fire?
And the architect replied, there's pathways with the Portland Fire Department by using sprinklers with the townhomes as well as certain streetlights based on height.
In his plans, the buildings were 29 feet 11 inches tall, 1 inch under the maximum height for ground ladder usage, and the street was 26 feet wide— plenty of room for fire trucks.
He also said there was a turnaround near the entrance which effectively shortened the distance to the dead end.
But he didn't write any of that down, and none of it made it into the staff report.
The Design Commission went on to approve 8 apartment buildings with 31 units in 2017 using the original application submitted for 2-story standalone houses.
They checked the required pre-app box with a conference that took place 2 and a half years prior when Carrie Schimmel looked at houses.
If a second pre-app had been required due to these massive changes in the proposal, the Fire Bureau would have said multifamily apartment buildings need sprinklers.
A turnaround and signage, et cetera.
But they didn't even see it.
I'm not sure any of the bureaus did.
The reviews attached to that land use approval are for the houses.
So when Habitat bought that property, it had zero fire safety requirements.
And they took that like the blank check that it was and cashed it.
They built an entire housing development without any fire safety.
No sprinklers, no turnaround, no signage, no hydrant, no anything for buildings there were a lot of failure points along the way.
This loophole in Title 33 is just the first of them.
One sentence would have prevented all of this.
Please consider adopting it so this doesn't happen again.
Thank you.
Candace Avalos
Thank you, Lacy.
Go ahead.
Michael Harrison
Good afternoon, Chair Avalos and members of the council.
Thank you for the opportunity to be here today.
I sort of have 3 things today.
One is a thank you.
The other is an apology.
And the third is a question.
First, thank you, because the work of this committee, the work of city staff, and the work of council in general, I've noticed, is really an attempt to kind of hone code so that it's effective to meet goals.
But at the same time, it isn't just sort of regulations for regulation's sake, because they're— and so definitely appreciate that, that move.
Apology is a very important part of the work that we do.
Thank you.
Because there's been a flurry of really good activity, including the Recap 11 item that this committee passed out at your last hearing.
And I haven't been able to sort of necessarily always absorb the impacts that that would have.
Sorry, maybe I didn't introduce myself.
Michael Harrison, Oregon Health and Science University.
Don't necessarily always fully appreciate and understand the impacts thank you.
I'm not always aware of the impacts of all the regulations when they're proposed, and I didn't catch until after RECAP 11 passed one particular item, the redefinition of mechanical equipment that was included in RECAP 11, that the impacts that that would have on OHSU as well as sort of other large campus environments and probably as well on smaller properties as well.
In a nutshell, city code So if it requires a mechanical permit, it's mechanical equipment and therefore requires screening.
But the definition that is used has been, does it require a mechanical permit?
So if it requires a mechanical permit, it's mechanical equipment and therefore requires screening.
But the redefining of mechanical equipment that happened with RECAP 11 that's heading to council on Monday, I believe, is a different full definition.
Okay.
Council on the 24th includes a lot of things like gas meters, EV charging equipment, and other equipment that is sort of ubiquitous kind of across our campus.
And requiring it to be screened would have several effects.
One, it would just be very expensive to do.
Two, depending on how it's screened, it can make it more difficult to maintain the equipment.
And three, sometimes the equipment is located in areas where there's not a natural way to screen it.
It's like too close to a building, too close to a drive aisle, too close to a sidewalk.
So the last item is a request for guidance.
I know that under the new council structure, there's a desire for committee work to be the area where things get resolved, and, and then things would happen faster at the full council.
Obviously I'm too late because this item isn't on the agenda today, so I'm just not sure kind of what to do.
And there's a letter here from 3 of our institutions, so if folks could give us some guidance as to what we should do, we'd appreciate it.
Thank you so much.
Candace Avalos
Thank you.
Councilor— Vice Chair Green, did you have a comment?
Mitch Green
Thanks.
I put my hand up to ask a question of Lacey from earlier testimony, but I think I could offer here, I would really encourage you to email this document to the full council.
Okay.
So that way we understand what to consider as we deal with that then.
Okay.
That's probably the best way to move forward at this point.
Okay.
Michael Harrison
And then—.
Candace Avalos
Thank you.
Mitch Green
If you could please come back for just a moment, Ms. Sutton.
I just wanted to know, have you submitted that sentence that you referred to in writing?
And if you haven't, will you please?
Lacey Sutton
I would be happy to.
Yeah, I've submitted a lot in writing, but I don't think I have— I've gotten that far.
Mitch Green
Wasn't able to, to write that down as you said it verbally.
Lacey Sutton
I really appreciate you listening.
Thank you.
Candace Avalos
Thank you both.
Diego, please call the next person.
Diego
Next we have Cynthia Carmina Gomez, followed by Sid Hariharan Gott.
Cynthia Carmina Gomez
Welcome.
Chair Avalos, Vice Chair Green, and members of the committee.
For the record, my name is Cynthia Carmina Gomez.
I serve as the Director of Local Government and Community Relations for Portland State University.
Thank you for the opportunity to testify, and my apologies for the timing.
I echo Michael's, um, apologies.
While Recap 11 was— has passed this committee and heads to council next week for a vote, we wanted to flag a technical issue before final adoption.
We did email all of your staff yesterday with some details, but we will follow up with that letter.
Portland State University, with Oregon Health Sciences University and the University of Oregon's Portland campus, supports clarifying the definition of mechanical equipment.
Um, absolutely, but the current draft sweeps in several items that previously didn't require screening, including transformers gas meters, backflow preventers, and EV chargers.
For an institution like Portland State, what may seem like a minor technical matter can have significant implications for our community.
We are operating under serious financial strain, navigating consequential budget constraints while working hard to protect services to students and the needs of our region.
Every capital dollar we spend is one we are weighing against a classroom, A student support program, or a community need.
Unanticipated screening requirements for equipment such as transformers and utility meters would add real avoidable design, construction, and ongoing maintenance costs across our campus at exactly the moment we can least afford them.
These are the kinds of costs that compound, affecting multiple buildings, projects, and budget cycles, and they come at a direct expense of our ability to invest in our core mission, We'd respectfully ask the committee to consider whether a more nuanced and workable approach could be found.
And on behalf of our community, thank you for all you do for our beautiful city.
Candace Avalos
Thank you.
Diego
We have Sid joining us online.
Sid, you feel free to unmute and begin your testimony when you're ready.
Steve Novick
Great, thank you.
Good afternoon, Chair, Vice Chair, and committee members.
My name is Sid Hariharangat.
I want to echo both Michael and Cynthia that spoke before me and want to provide some input on Recap 11.
Before I do that, I first want to thank city staff for their work on these very important code changes and making a more digestible, predictable, and frankly, a better reading code for the City of Portland.
I'm here with a minor request consistent with testimony that we submitted online, and that testimony online is item number 336781, and that is about moving previously reviewed proposed code from another project into RECAP 11.
We asked that the proposed floodplain land division regulation, which is under Title 33-631-200, be moved out of the Columbia Corridor and Industrial Lands Environmental Overlay Zone project— I'll refer to that as CESL— which has been delayed, and rather incorporate that floodplain land division language into RECAP 11.
The CESL project is designed to update environmental overlay zones in specific industrial areas, focusing on mapping and protecting natural resources like wetlands and habitat.
By contrast, the floodplain land division regulations found in 33-631-200 are citywide development standards that are tied to FEMA requirements, flood hazard mitigation, and how land is legally divided across all zones impacting residential, commercial, and industrial land.
Placing this regulation and this code change within the CSUL project presents 2 challenges.
The first is that it misaligns the scope.
A citywide rule that becomes embedded within a geographically limited project, as the CSUL project is, risks inconsistent application and confusion for property owners and applicants.
Second, it blurs regulatory structure.
So floodplain standards already intersect with broader development codes and federal compliance standards.
These rules should be coordinated in a setting that's designed to address code-wide alignment, not site or area-specific environmental overlays.
And that brings me to Recap 11.
So Recap is specifically intended for targeted Technical zoning updates that improve clarity, remove barriers, and ensure consistency across the code.
RECAP, rather than a CECL project, is the appropriate venue to handle a regulation that applies citywide bridges, floodplain regulations, and land division standards, and requires clean integration across code chapters.
The proposed code amendment of the land division standard has been reviewed by Planning Commission and recommended for council approval.
The issue is that the Cecil project is not anticipated to go in front of council until late 2026 and more likely 2027.
This creates an unnecessary delay in a minor code edit.
I respectfully ask that the committee direct staff to relocate the floodplain land division regulation into RECAP 11.
Thanks for your time.
Diego
That concludes— sorry, that concludes testimony.
Candace Avalos
Thank you, Diego, and thank you to all the folks who came and testified.
It sounds like there are some technical asks.
And so as Vice Chair Green requested, would love to get those in writing so we can look into those further.
Oh yes, and Councilor Koyama Lane.
Tiffany Koyama Lane
Well, first I just wanted to thank Chair Avalos and Vice Chair Green for having this opportunity at the beginning of every committee meeting where we hear from people from the community.
This is exactly how it's supposed to work out.
I don't think any apologies are needed.
Sometimes when things come forward to committee or they're made more public, that's when more eyes are on them and things get thank you.
This is how this is supposed to work.
And maybe you know how legislation, how it all flows, but I will say before I started working in this building, I did not.
And so it's— I'll just quickly explain for anyone that needs to know or for people in the community that are watching.
It passed through committee, it was brought by the mayor's team, but it will go to the full council.
It's an ordinance, so it'll have 2 readings, so there'll be a chance to bring amendments.
And so this is exactly what you're supposed to do, bring us this, Email us.
And if you want to, even on your way out, stop by the District 3 offices.
You can even talk to some of my staff about— I mean, I actually— we have to look this through and see where we stand on amendments, but then that would be where we could vote on an amendment as council.
It would need at least 7 votes.
And hope that's helpful, and thank you for being here, all the people that came to testify today.
Candace Avalos
Thank you, Councilor.
All right, let's go ahead and move on to item 3.
Diego, please read that.
Diego
Item 3, direct the city administrator to reestablish a permitting improvement team to lead the second phase of the code alignment project.
Candace Avalos
All right, thank you.
So before we begin, I just want to acknowledge that this is a resolution that my office was proud to co-sponsor alongside Council President.
Thank you so much for being here, and several of our colleagues as well.
I appreciate the collaboration between our offices, the deputy city administrators, and bureau staff in developing a proposal focused on improving accountability, coordination, and efficiency within Portland's permitting system.
We hear regularly from housing providers and small businesses and community members about the challenges of navigating permitting.
So this resolution is intended to continue the work of identifying and addressing those barriers so we can make city processes more predictable and easier to navigate.
So with that, I'll turn it over to Council President Dunphy.
And is DCA Donna Paul and DCA Oliveira joining you for the presentation or no?
Council President Dunphy
We will have those, not through this part of the presentation though.
I'll walk us through what the slides are and then we'll hear from them.
Candace Avalos
Sounds good.
Take it away.
Council President Dunphy
Thank you very much, Chair Avalos.
Good afternoon, colleagues.
I'm excited to talk to you today about the Code Alignment Project 2 resolution.
This is a critical step in driving this important work forward.
When we sat down with staff months ago to scope the next round of code changes, we asked them to think bigger.
This resolution is the result of that ambition.
It ensures that the CAP team has the authority and cross-bureau cooperation that they need to tackle the most complex barriers to permitting improvement.
So here's what we'll be covering today.
Oh, do we have a slideshow?
Sure, yeah.
Yeah.
There we go.
Queesha Light
Okay.
Candace Avalos
Okay.
Tiffany Koyama Lane
Sorry, incorrect slide.
Council President Dunphy
There we go.
Thank you.
And as Councilor Avalos noted, this is co-sponsored by myself, Councilors Avalos, Murillo, Ryan, and Novick.
Thank you.
So here's what we're going to be covering today.
We're going to be talking about applicant permitting experiences and our current performance metrics.
We'll get into some history of permitting improvement efforts and the code alignment project work, where we'll discuss how CAP 2 expands on the foundational code improvements from CAP 1.
Then we're going to discuss this resolution, what it does, what it doesn't, how it fits within the code alignment work, and why it's needed to achieve the outcomes that we're aiming for.
Then after that, we will hear from our invited speakers, DCA Oliveira.
PBOT Director Williams is pinch-hitting for DCA Donipal.
We'll also hear from Sarah Radcliffe, Director of Government Relations with Habitat for Humanity, Ben Hemson, Government Affairs Director with the Home Building Association of Greater Portland, and Peter Finley Frye, who is a nationally certified planner and founding member of the DRAC, the Development Review Advisory Committee.
And then we'll get into public discussion.
Testimony.
So next slide, please.
Colleagues, it's no surprise to anybody here, but Portland is the slowest in the metro region for permitting timelines.
A comparative analysis by Johnson Economics found that Portland averages 413 days to issue a multifamily permit, where— while Vancouver averages 225 days, Hillsboro 204, and Gresham is 313 days.
Now, I'm not expecting us to be the number one permitting system in the nation, but can we please at least be as good as Gresham?
Interestingly, this study found out that the permitting processes across these cities is actually quite similar in steps.
The difference is simply how long it takes each of those permits to move through the necessary channels before issuance.
As you can see, this is reflected in the current survey metrics.
66% Of applicants rated our under review phase as difficult or very difficult.
64% Of applications said the application phase is anything less than easy.
And our own 2021 audit found that only 7% of new residential construction projects are expected to meet our own timeliness goals in a housing crisis.
This is just not sustainable.
So I wanna stress that this isn't just a problem for large developers.
It hurts small business owners and homeowners just as much, if not more, since the average person does not have the training to navigate our labyrinthian codes and procedures.
Next slide, please.
When I read through the survey responses, 3 themes came up again and again.
Permitting is prohibitively expensive, it's time-consuming, and the service and information is inconsistent at best.
One respondent put it simply, permitting projects feels like I'm being punished for doing the right thing.
I think my favorite response was from someone who described themselves as a, quote, non-expert.
It really sums up the extreme frustration that applicants feel when I say, I quote, I've found the process to build a door to be an expensive, dystopian, Kafkaesque bureaucratic boondoggle.
It's funny, but it's also not funny.
Permitting a home improvement project shouldn't blur the lines of an existential crisis.
I know none of this was intentional.
Much of it was the result of our old form of government creating a disjointed system riddled with communication silos and historical policy choices that have compounded into a complex, Conflicting code system, and all adding up to a terrible experience.
Next slide, please.
From 1997 to 2021, our city auditor has documented— city auditors have documented similar themes in their recommendations.
One, we're too slow and we're getting slower.
The city hasn't met its own timeliness goals for commercial or residential permits in years, and performance gets worse on complex projects.
There's no clear authority or well-implemented coordination process between bureaus.
Our codes are conflicting and interpretation is inconsistent.
Growing regulatory complexity was consistently named as one of the main reasons for delays, which is not surprising since our zoning code alone has ballooned from 250 pages in 1980 to upwards of 1,800 pages today.
What really struck me is how often it cited that customers customer service remains an afterthought.
The city has had a complaint system since 2007 or 2004, and yet never followed it.
Instead, it's always been that if you knew someone on city council, you got a faster response.
If you didn't, you were on your own.
The auditor called it, quote, a gray area between customer service and favoritism, and that's just not right or fair.
And as a city, we really need to heed the auditor's warnings that delays don't just frustrate customers, they cost us.
Thank you.
Last year alone, we lost an estimated $700 million in development investments.
Developers are opting to build elsewhere.
Residents aren't permitting their construction work, and Portland is losing the economic activity, jobs, and growth that come with a healthy development environment.
But the findings did drive some meaningful actions.
As you can see on this slide, in 2021, Commissioners Ryan and Maps convened the Permitting Improvement Task Force, bringing in recommendations from all council offices, permitting bureaus, and the development community.
And one of their top recommendations, create a formal ongoing code alignment process, the Code Alignment Project.
In 2022, the city auditor found that we've made some progress, but permitting speeds still lagged and we're not consistently following the 2020 or the 2004 customer complaint policy.
In 2024, Permitting and Development launched as a consolidated permitting bureau to implement the building codes and lead the permitting work.
But this was always considered a starting point, not a full consideration— consolidation, excuse me, not a full consolidation.
And staff had real issues with it.
And last year in 2025, this council unanimously passed CAP 1 and proved that even a few targeted reforms can make a real impact.
Next slide, please.
CAP 1 started with a simple but important idea: find the places where the city code conflicts, creates unnecessary barriers, and slows the permitting down.
And fix them.
With limited staff and an 8-month timeline, the team focused on small-scale residential and small business projects, delivering technical amendments to align Titles 11, 17, and 21.
It temporarily suspended 4 key requirements through January of 2029: street tree planting for remodels and additions, project value triggers for frontage improvement requirements, seismic evaluation reports for most pre-1974 buildings, and nonconforming site upgrade requirements.
But the team identified far more than we could tackle and that is why Cap 2 is going to take a much bigger swing, resolving conflicts across zoning, right-of-way coordination, change of use, seismic requirements, and more.
It focuses on reducing real barriers for housing developers and small businesses and takes on the lingering inter-bureau process inefficiencies that Cap 1 couldn't touch.
A big swing like this is needed.
It needs a resolution to guide it so it lands exactly where this needs to land.
Thank you.
Next slide, please.
Before I get into details of this, I want to be very clear about what this resolution is not.
It is not a directive to start rearranging staff.
It is not a push to deregulate building activity, bypassing important life and safety codes just to speed things up.
That's not reform, that's chaos.
What this is, is an enabling policy.
It's a way to gather up all the loose ends and start weaving them into something that is cohesive.
So here's what it does.
It establishes project authority.
Right now, there's no real decision maker about who can break a tie on what a code change should be.
Many of the conflicts live in administrative rules, which the team currently has no authority over.
Without this resolution, some of those fixes could take years of negotiating and might never get resolved or end up as compromises that don't actually move the needle.
That's costly in staff time, and it doesn't get us where we need to go.
It creates a permanent code team.
We're asking for a permanent code writing team like we used to have that works across bureaus, incorporates feedback from customers, and learns what staff sees during implementation.
Because if we spend time on the— to fix the codes, we need to make sure those fixes aren't immediately undone by bureaus still writing updates in silos.
It strengthens process alignment.
We're asking that the city administrator examines our permitting system and brings back a real proposal to finish the work from all our previous efforts.
Every person, every project, deserves consistent, reliable service.
That means digging in and making some long-term structural changes.
And it asks for community involvement.
We're requiring that this team actually listen to and implement the feedback from people with real-world experience in building here and in other jurisdictions, people who can offer practical solutions to push us towards best practices and help us simplify.
And the outcomes that we are aiming for are, as listed on this slide, faster permits, Last slide, please.
Since the auditor has also asked for sustained focus council leadership on permitting efforts since 1997, we're going to do our part to make sure that happens with CAP 2.
This can't be another policy that On a quarterly basis, we are requiring a reporting to council with iterative code packages to make sure that council prioritizes this work and that the public knows of our progress and what we're working on next.
Within 60 days, we're asking for a scoped work plan for CAP 2 so that the public knows exactly what areas of improvement we're focusing on now and what comes next.
The 150 days, we want a picture of where we are.
Thank you.
Agency agreements, current staff resources gaps, and a proposal for how do we simplify authority so the whole system can actually work together.
And it's a 2-year target.
We're asking for significant work to be done in code alignment, and that's an aggressive timeline for us.
But honestly, much of what we'd like to see is in code updates is really just do less, not more, not reinvent the wheel.
Let's just find what's working elsewhere and go do that.
So in closing, we have spent nearly 30 years as a city identifying the same problems.
We've convened task forces, we've conducted audits, we created a new bureau and passed the first round of substantial code changes.
But every one of those steps mattered.
But without this resolution, CAP 2 moves forward without real authority, without clear timelines, and without any guarantee that the next round of code updates won't just create new conflicts.
Thank you.
This resolution gives the teams the tool to finish the job and gives this council a clear directive to see it through.
Portland can be a place where permitting works for everyone, not just those who know how to navigate the system.
And that's worth doing.
So let's get it done.
And that concludes my presentation at this time.
We have some invited guests to come up and provide some testimony, and then we have some folks signed up for the public to testify, and then we'll take any of your questions in whatever order you would like us to do, Chair.
Candace Avalos
Thank you, Council President.
I— but am I understanding that first we're gonna have DCAs and then we're gonna bring invited guests, or do you want me to bring all of them up at once?
Council President Dunphy
If we could, I, I would sure love to have the DCAs at the very least up first.
Um, if you—.
Justin Wood
And then—.
Candace Avalos
Yeah, yeah.
So we'll have the DCAs first, and then we'll do invited testimony, and then we'll take regular testimony.
Thank you, Council President.
Donny Oliveira
All righty, uh, thank you for having us.
Thank you, Council President, for teeing that up.
My name is Donny Oliveira, for the record.
I'm the Deputy City Administrator of Community and Economic Development, and joining me today is Millicent Williams, Director of the Portland Bureau of Transportation, sitting in for Councilor DiCiedano-Paol.
All right, thank you.
I'll start, Director.
First and foremost, just want to thank this City Council for its continued commitment to working with the administration on improving our systems specifically related to permitting.
As the Council President mentioned, this is not the first time a City Council has contemplated improving our processes, and so we just want to thank— be thankful in advance for working with us to help us contemplate what's the best path forward.
I'm going to share a couple of thoughts about where we're at today related to CAP 2, CAP 1, and even just contemplating the PP&D change that happened a couple years ago, and then share why I'm excited and my team's excited about this resolution.
Just as a reminder, and this was mentioned by Council President, but permitting development is a relatively young bureau.
Yes, it has the roots of the Development Services Bureau with PBOT and Parks, Water, and BES staff joining it.
But even that model that we created didn't actually give us an opportunity to think holistically about what the right model could be.
We took what we had and made the best of it, and I'm very pleased with what the team's done at PP&D, continue to work with our infrastructure partners.
But we think there's a better pathway and another opportunity for us to think about it strategically.
So that's why the piece of the resolution that gives us a chance, that 150-day window, to come back with a pathway makes a lot of sense because frankly, we've oftentimes been reacting to a directive versus contemplating for ourselves what might it look like to do it well.
So first, I wanna just acknowledge that.
And the second piece I wanna share is thank you for adopting CAP 1 and you'll soon adopt RECAP as RECAP 11.
But code improvement continues to happen in the city, which we're grateful for the staff resources to do that.
And CAP 2 is very much underway.
Thank you.
And why this resolution is important for that though is we don't want CAP 2 to be the last code alignment project.
We think this, much like RECAP is at version 11, we'd love to see CAP continue to go forward as we look at our codes and frankly continue to improve work with our communities and our development community about what might success look like and not just improvement in pace, but certainty.
And I think that's something that I really want to emphasize.
Yes, there's structural and procedural opportunities that we have within the city, but what I hear more than our cost of doing business in the city with related to permitting is people want certainty.
They want to know when they enter into our system, they know how long it's going to take, how much it's going to cost, so they can plan for that.
And I think that's what CAP is starting to tease out is, can we give our builders and our home improvement DIYers and our small business community consistency on how they engage with us?
So that's what's really exciting about the CAP piece.
Thank you.
And last, about the resolution that I want to just further emphasize is if we continue to over-leverage our staff, the doers who are doing permitting, now pulling them away from that work to contemplate a new code or a new structure or a new process, we're doing 2 things.
One, we're just over, you know, we're over-leveraging and we're frankly burning out our staff.
But also we don't get the full focus of a team.
And so the idea of establishing a permit improvement team again, like the last council did, but resourced, will give us the capacity to both maintain our workload, but actually have the resources and focus to think about something different well.
So I wanna thank the Council President for giving us that opportunity to bring back an idea around that.
And that's my support for this resolution.
I wanna thank again the councilors for their continued alignment with code improvement and permitting improvement.
So thank you.
Millicent Williams
Thank you, DC Oliveira.
I will be reading DC Donapal's I will share that if I were testifying as the PBOT director, I would be able to provide a different perspective about the work that's been done and how we might be able to continue to be supportive of the work that's planned and that's proposed through this resolution.
But I am going to be reading her comments.
I don't want to stray from that, but open to answering questions if folks have those at the conclusion of our conversation.
So thank you, Chair Avalos.
Steve Novick
Councilor thank you, Mr. Mayor.
Byron Balog
Thank you, Councilor Smith.
Thank you, Mr. Mayor.
Steve Novick
Thank you, Councilor Smith.
Millicent Williams
Thank you, Councilor Dan Ryan, for the opportunity to speak to Council President Dunphy's resolution to reestablish the permitting improvement team and support the code alignment project phase 2.
The Public Works service area is fully in support of improving Portland's development permitting process.
Although the direct functions of Public Works permitting for private development are now housed in PP&D, or Portland Permitting and Development, within the Community and Economic Development service area, we remain strong partners in this work and look forward to collaborating on further improvements.
As we all know, private, private development is vital to a healthy and growing community, and how that private development interacts with the public right-of-way and commons is critical to creating a safe and beautiful city.
We all want well-built and safe sidewalks adjacent to new development.
We all want proper water and sewer lines to connect We all want a healthy tree canopy along our street network to combat the effects of heat islands and to beautify our business districts.
And none of that happens without effective public works requirements for development.
The goal of consolidating public works permitting in PP&D 2 years ago was to make sure that we continued that important work while helping our private property owners navigate the permitting process I'm pleased to be here today to support the continuation of that work.
The reestablishment and resourcing of a permitting improvement team is an exciting step.
Continuing to make the permitting process more efficient while also ensuring that it helps to advance the thriving, safe, and sustainable city that we all want is hard work, and it is work that the Public Works Service Area looks forward to lending our expertise to.
Thank you.
To and helping to advance.
Thank you.
Candace Avalos
Thank you all.
Now let's go ahead and invite our invited panel.
Um, let's see, we've got Sarah Radcliffe, Peter Finley Frye, and Ben Hempson.
Come on up.
All right, Sarah, do you want to kick us off?
Diego
Sure.
Sarah Radcliffe
Uh, good afternoon, Chair Avalos, Vice Chair Green, members of the committee.
My name is Sarah Radcliffe, and I'm here with Habitat for Humanity Portland Region.
We are so pleased to see the continued momentum around streamlining permitting and aligning code.
We fully support reestablishing a permitting improvement team, and I want to thank the staff and elected leaders who have persevered with a tedious and complicated project over many years.
Habitat for Humanity has 77 homes currently under construction in the City of Portland and 100 homes in pre-development within the city.
So we may be one of permitting and development's biggest customers.
We are primarily building middle housing, often townhomes, which provide permanently affordable homeownership opportunities through the community land trust model in partnership with Proud Ground.
Often called the missing middle, this type of housing was underproduced in American cities for decades and is in high demand because it's more affordable and family-friendly, often with small yards or shared green space tucked into existing residential neighborhoods.
It's also more complicated from a permitting perspective than constructing a square building on a square lot.
Thanks to the city's efforts over the past few years, we have seen improvements regarding building permits.
Where we still encounter challenges is around site development, public works, and frontage improvements.
This is an area where a lot of competing interests collide: stormwater, utilities, fire safety, parking, pedestrian and bike access, ADA compliance, tree canopy, street connectivity, and density requirements, creating a process that's prone to delays and code alignment issues.
Each is a laudable goal, but figuring out how to rank these goals and how to do so efficiently without incurring costs and delays is challenging.
We look forward to working with the permitting improvement team throughout this process, and because we build in neighboring cities as well, we can bring a valuable cross-jurisdictional perspective.
We actually have a few developments underway in Gresham.
Thank you for your consideration and your city— your service to the city.
Tiffany Koyama Lane
Thank you.
Cynthia Carmina Gomez
Go ahead.
Peter Finley Fry
Good afternoon.
Um, my name is Peter Finley Fry.
I'm a nationally certified land use planner.
I work primarily with business owners and property owners, but I've done a lot of work with nonprofits.
And for example, I put Self Enhancement Inc. out on Columbia Boulevard in industrial sanctuary, which was quite a feat.
The problem, as the staff has identified, is there's no single authority to negotiate the inconsistencies that occur when you have multiple areas of concern.
Most jurisdictions throughout the United States have site review, which is different than design review.
Portland does not.
Portland's the only place I know of that actually does not have site review, but we have our own solution, and that's a solution that is being advocated by the council president now, the Portland Solution, which, as you already know, directs edits through correct processes, cross-functional code team, unified permitting authority, and quarterly council reports.
So I'm here to strongly support that after almost almost 50 years of work throughout California, Oregon, and Washington.
I want to comment briefly on the fact that permitting is where fantasy meets reality.
We all have in our own heads our bubble, and we want to have beautiful things, and we want to do all this stuff, but in reality, we hit certain realities.
Yes.
These are the realities that developers and business owners and property owners encounter when they enter into the permit process because we are responsible for the permitting process.
Thank you.
For people's life and safety.
We are responsible for creating sidewalks and safe streets.
We are also wanting to make the world a better place.
And there are differences of opinion about eco-roofs and ground floor retail and those kind of things, but those are all manifestations of the public's interest to make the world a better place.
And all these things have to be negotiated negotiated and worked out.
And in the past, they were worked out through these silos, and then you would have the process in having no ability to really coordinate or deal with issues.
I'm not going to be here giving you examples, although I could.
I just wanted to focus on more of the big picture and why this focus of the council president and the— and what is before you is so important because it creates a vessel in which this can be resolved.
Permitting process needs also to be navigated by normal people, and that's the other message I wanted to clearly bring to you.
And I'm only making my observation from what I in here, but a lot of this is driven by development interests, and I don't work for them.
I work for the people, and the people are the ones who need access to the system as much as developers do.
And I do want to say that Portland Planning and Development has done a really good job of opening itself up to people with their 15-minute meetings and other ways they're trying to outreach to just normal people that have to deal with a deck or landscaping or whatever so that a person can navigate your system without having to hire an architect or a planning consultant.
I want to end by basically saying we need to protect the public safety and we need to live in a hello, Chair Avalos, members of the committee.
Ben Hemson
For the record, my name is Ben Hemson.
I'm the Government Affairs Director for the Home Building Association of Greater Portland.
Our members build homes throughout the region, but in Portland proper are largely engaged in the development of single-family infill, middle housing style homes, and small-scale multifamily.
We're enthusiastic supporters of the CAP 2 resolution before you today and urge you to support it as well.
In my role, we hold monthly meetings with the leadership in the PP&D department where we discuss issues and projects across the city.
And by and large, the issues that we're discussing are not headline-generating policy they're simple code conflicts, interdepartmental communication issues, or concerns that arise around a project being handed off from one workgroup to another.
So we're excited about the CAP2 project.
I think it really seeks to address those concerns and those problems and really start turning the tide on the timelines that you heard from Council President Dunphy earlier.
Thank you.
I will make just one note on new Director Kooch in PP&D.
He and his team are working on some other projects that we're really excited about, one of them around looking at the user experience, another around surveying folks that go through the application or the permitting process.
Excuse me.
I think this work aligns with, or that work aligns with this work in CAP-2, and we're looking forward to seeing how it all comes together going forward.
And finally, just thank you to Council President Dunphy, Councilor Avalos, and the other sponsors.
This is something we're looking forward to being engaged with, and I think we have that relationship with the folks in PPMD to provide our input as it progresses.
Thank you.
Candace Avalos
Thank you, Ben.
Thank you, Sarah and Peter, for your invited testimony.
Colleagues, we've— I see a lot of hands in the queue.
We do have a couple of folks, uh, for public testimony.
Are we cool moving forward?
And we can— okay, sounds good.
Diego, go ahead and call public testimony.
Diego
First up, Lacey Sutton.
Lacey Sutton
Hello again, I'm Lacey Sutton.
Um, so I'm aware that this permitting improvement stuff is all about the customer, the developers really especially the affordable housing developers, and not the people who will live in the houses and have to face the consequences of their shoddy work.
The city has made it abundantly clear that they don't care about us.
It's all about the numbers.
It's all about the money.
It's about making it easier for developers to build, build, build.
Okay, fine, then make it harder for them to do a bad job and make them have to come back and fix it when they do.
Create a mechanism for accountability because there is none now.
This is particularly necessary for affordable housing developers because we give them our money, lots of it.
We give them land tax exemptions.
We the people should expect a return on our investment.
So when they promise to provide safe and affordable housing, we should expect that.
We should expect them to honor their covenants.
We should expect compliance with land use codes and laws.
And we should expect Portland Fire and Rescue and Portland Permitting and Development to give a low market— sorry, low-income project in East Portland the same care and consideration that they would afford a market-rate project in the Pearl District.
When they don't do that, when on our dime they hurt the most vulnerable people in our society, people we were trying to help, we should demand accountability.
And we don't.
As a city, We just don't.
As a citizen, I have.
For over 2 years, I've been going around telling anyone who would listen about how the Fire Bureau and PP&D and Habitat for Humanity royally screwed up.
And for a long time, I truly believed that if the people in charge would just listen to me, if they would just look at the mountain of evidence, they would see that it was true, and then they would have to do something about but we're at this point where a lot of people, people who work for PF&R, PP&D, and Habitat, people on this council, a lot of people know what I've been saying is true.
They know that we're living with, with life-threatening code violations, violations that the city lied about and tried to cover up.
I stupidly believed that once the people in charge understood this to be true, they would act, because how could they not?
Yet here I— here we are, you know, here I am again because no one is doing anything.
The customer isn't just the developer, the architect, the landlord.
It's the low-income homeowner.
It's the low-income renter.
We are paying for a product that is not merely subpar, but dangerous, and we can't do anything to fix it.
We can't even move because we don't have the resources.
So let them build faster, let them build cheaper, but you must build a system of accountability for us, to us.
Thank you.
Candace Avalos
Thank you, Lacy.
Diego
Next is Byron Balog.
Byron Balog
Good afternoon.
Welcome.
I am Byron Balog from LRS Architects.
Thank you, Chair Avalos and members of the committee, for allowing me to speak to you this afternoon.
It is my pleasure to speak to you.
My name is Byron Balog.
I am a practicing architect and senior associate at LRS Architects here in Portland.
I started my professional career here in 1987, nearly 40 years ago, and I have permitted over 100 projects here in the City of Portland over that time, probably 20 or 30 of those in the past 5 years.
Therefore, I am committed to seeing Portland's revitalization.
As I begin, I want to first acknowledge the talented and hardworking professionals who work in the city's bureaus and permitting departments who have reviewed my projects over the years.
I appreciate their mission, which is to serve and protect the public, and I want to thank them for their time and their efforts.
That being said, I want to testify that over the past 40 years, I've seen the permitting process grow in complexity.
This current decentralized and multilayered system that I have experienced over the years continues to take longer and jeopardize the timeline of viable projects.
In fact, I have— I bring 2 current examples today for you, for you to consider.
LRS Architects is involved in 2 very important, much-needed affordable housing projects that are currently under construction in the City of Portland.
One of those projects took 572 days from initial application to issuance of permits, and the other took 608 days.
Wow.
Now, certainly both projects took some curves and detours along the way, but both are prime examples of what it takes for an owner to get a project built in this city.
My colleagues for both these projects would be happy to share the details with you at another time.
In closing, I reiterate that the current permitting process is too long, too complicated, very costly, and discouraging owners from developing new projects in Portland.
Therefore, I fully support the CAP2 resolution to establish a more centralized and more streamlined approach to permitting in our city.
Thank you very much.
Candace Avalos
Thank you.
Diego
Last, I have Ben Hemson listed.
If I may ask, Ben, did you have additional testimony you'd like to provide, or did you conclude your testimony during the presentation?
Ben Hemson
I concluded it during the presentation.
Steve Novick
Thank you.
Diego
Thank you so much.
That concludes testimony.
Candace Avalos
All right, thank you.
Let's go ahead and jump in the queue, starting with Vice Chair Green.
Mitch Green
Thank you, Chair Avalos.
Council President Dunphy, come on up.
Thank you.
I guess I see that Councilor Novick is a co-sponsor, so maybe this is an appropriate question for Councilor Novick.
So the big orange call-out bubble where you found the really interesting quote, did you write that?
That sounds like it's in your meter and your style of humor.
Steve Novick
I'm not that— I'm less original than you think I am.
Mitch Green
Okay, and maybe, may, you may or may or not have had a, a problem with building a door, so we'll find out.
Future friend.
Future friend.
Um, I appreciated seeing that because, I mean, I've, I did a bathroom remodel myself, um, and I used the permit process, and I think I had to add some stairs down there to make it conforming, and I think the cost of the permitting side was the cost of the actual other side of the job, and I just remember thinking at that time If I ever find my way in City Hall, I hope we can kind of work on this stuff.
I don't have to, fortunately, because you're taking the lead on this.
So thank you.
I'm broadly supportive of this, but I have a few questions.
One of the things that bubbles up for me is it's also related to the other discussions we've had around kind of core realignment and some of these kind of broader structural changes in the city.
How are we going to ensure that workers with that deep bureau-level experience who may be currently embedded in How are we going to ensure that they're going to be able to bring their knowledge to bear on the problem and sort of not be dismissed or not be sort of like laid off because they ask too many tough questions?
Like, are we going to take the change management part of it seriously here?
I guess you're not the bureau directors, but the resolution is providing the leadership.
So I'm curious if you have any thoughts on that.
I know you've thought about it.
Council President Dunphy
Yeah, I think there's going to be an opportunity for this council to weigh in on what comes yes.
Before we start talking about rearranging where people sit, let alone who they report to or whether they, you know, their jobs are in what specific bureau.
We have a lot of decision points between this.
This sets us up to go tap into the bureaus that have already been thinking about some of these serious systematic changes that need to happen and relies on their good professional judgment, but also the survey results from customers and the guidance of this body.
So I think there's going to be plenty of opportunities for us to make sure we can really dig into some of the details, ensure that we are tapping into the professional expertise, protecting jobs, and also making sure that we get good results on the backside of it.
Mitch Green
I'm grateful to hear that.
And I saw the kind of like that interplay with council and the reporting piece as an opportunity to kind of elevate labor as part of this as well.
So thanks for reiterating that intent here.
One thing that I'm really excited about, that's— it's in the kind of impact statements, there's a couple callouts that I think are important, is, you know, change of use and seismic requirements.
I have, you know, I've heard from some constituents or partners of the county that they've had some struggles trying to open a preschool using Preschool for All dollars.
And I'm curious, and I I see that we have staff in the back and I don't know if there's any need or requirement to answer directly to that, but does CAP 2 contemplate some of that?
Or if we're already solving that, let me know, then I can chill out.
Council President Dunphy
You know, yeah, we— so there's the resolution before us, which is really about getting the team in place, you know, assembling the Avengers and then deciding how we're going to, save New York City.
There's a whole— there, yeah, there's a lot between here and there.
But I can tell you that the CAP2 team, the code— the permanent improvement team that is in place right now, they showed us an Excel spreadsheet based off of just the complaints from developers.
And, you know, some developers are, I think, are pretty unreasonable.
They're like, oh, building in Portland is too expensive because of bird-safe glazing.
That ain't it.
That's not what it is.
But over and over again, the same sort of themes around frontage improvements, dollar-based triggers, noncompliant conformity attempts, things like that, all kept coming up over and over again.
And this team really did understand where the value is going to be, and they're going to be able to drive that part of it forward now that they're going to be able to have the authority to say who is on first.
The reason Cap One came through and had some relatively minor but meaningful, but still relatively minor code suspensions was because they were the simplest to get across, across multiple bureaus.
This challenge of working across multiple bureaus is the challenge right now of solving the problem.
It's not that we don't know where the challenges are, it's getting everybody in the same room and saying who is on first base.
And that, that is what we're trying to accomplish with this.
Mitch Green
That's great.
So it's— we're basically establishing council's intent To say we want to resource this and we want to make sure that we've got this kind of strike team, you know, assemble the Avengers for one last job to kind of accelerate our code change process.
And frankly, I think that's the right approach.
I've thought about, well, can I just go do these one-off amendments?
And I think that's— that maybe contributes to the same problem that we have.
I mean, this does need to be kind of an all hands on deck and kind of bureau-driven process.
Frankly, um, I think it's time.
I applaud you for bringing this forward.
Um, you know, apropos, I, I heard from an architect last week.
I went to A Better Portland Coffee, which I highly recommend anyone doing that if you haven't already.
And, um, he's working on a proposal with his firm to, um, reimagine our vacant storefronts, the, the sort of ground tail actual retail spaces as Yeah.
As places where you can have kind of modularized, lower-cost apartments.
And we usually think about the kind of office to residential, but this would be sort of storefronts to residential, which seems to solve a lot of different problems.
And that would involve surely some kind of change of occupancy considerations in that.
And so that's one of these things where it's like, here's a great idea.
Let it go to waste because it takes years and years and years.
So do you think that this team, if it stood up and properly resourced, would be able to sort of see those opportunities and say, we think this is top priority?
Council President Dunphy
I really do, because I think some of the challenges that we have are where you have that intersection of, say, for example, converting a retail space.
You're going to have both the permitting and land use folks, but also the water and sewer bureaus, the transportation folks.
They're going to have some different considerations for sidewalk improvements in front of a retail space versus a, you know, second-story walk-up apartment.
This is an opportunity to be able to really meaningfully deliver on things exactly like that that we never could have done in the previous system because the permitting bureau would send it off and then it would go to the water engineer.
I'm not— I'm just picking randomly on a water engineer.
I apologize, water.
But the water engineer who has to then have dig through all the other 500 applications and suddenly 6 months has gone by.
Yeah.
We are now gonna be in a spot with, if this resolution passes and the plan that comes back, we'll be able to actually be more directive to staff and say, actually, we need to get that permit done quickly.
We need to make sure that these things are moving through with a certain timeline.
That is the goal, is allow us to be not able to do just the easy normal things that are the book of business that are still enormously expensive, complicated, and time-consuming, but to also, yeah, meet the challenges right now of vacant storefronts, vacant office spaces.
What are we gonna do with these spaces?
And if we don't have the team and the systems in place to be able to meet that moment, it doesn't matter how enthusiastic developers or outside parties are going to be to move this city forward.
So I have every confidence that this will help.
Mitch Green
Thank you so much.
And then lastly, I'll just make an appeal to this committee, to the bureaus, to take it to heart, Lacey Sutton's testimony on sort of the other side of the coin here.
If we're going to have this reporting function on as we go through this.
I want to make sure we're not missing that kind of what is the impact to the accountability side when we do these changes, because I've heard this a couple different times now and I want to make sure we take action.
Donny Oliveira
Thanks.
Council President Dunphy
Thank you, Councilor.
Candace Avalos
Thank you.
Councilor Koyama Lane.
Byron Balog
Thank you.
Tiffany Koyama Lane
Thank you, Vice Chair Green, too, for that segue, because I was going to also say something regarding What Lacey has shared with us a few times, and to be honest, it is— a lot of what you share is really horrifying.
Um, if you have any examples, or if anyone else who's watching has examples of how other jurisdictions have built-in accountability or oversight, I would really love to have that sent to me directly.
Um, and thank you.
And thank you to my colleagues for working on this.
Thank you to all those who came here to testify, everyone, but especially Sarah, because Councilor Green, do you want to guess why?
We always have this joke.
Oh, did you teach Sarah's kids?
Yeah, I taught her kids.
Yeah.
And I appreciated what Byron said.
I tried to write it, you were talking fast, but permitting is too long, too complicated, very discouraging.
And I hear that a lot from folks.
There's also a piece of me that's like, I want to work on that.
I'm not exactly sure how.
And then I'm like, this is what we need, like a team that actually knows how to do that and has those skills and is ready to do that.
So thank you for that.
One thing I loved hearing in this presentation is that already the DCAs are like, thank you for working with us and for bringing us in.
And having partners here shows that there's been some back and forth.
Council President, can you talk a little bit about what that back and forth and engagement has looked like with the DCAs, the bureaus, with the community.
Council President Dunphy
Yeah, you know, I have had a particular interest in fixing our permitting system.
And when I worked for Commissioner Nick Fish, I lived deep in the permitting system for many years, and I knew where a lot of the flaws were.
So when I first got into office, I sat down with DCA Oliveira to talk about what are some of the big swings that we actually need to take that requires— that the bureaus couldn't do on their own and requires leadership.
From council.
And this is the first big swing that we identified, that the question of who is on first lingers through all of our codes and it taints all of our administrative rules.
If until we can identify that question, who is in charge when it comes to these questions of code writing and code implementation, we couldn't really begin to do much more to improve the system.
And so this was a part, and candidly, This was not something— this kind of council-driven leadership is not something that was easy to come by in the old form of government because of that cross-bureau requirement.
This is our first real opportunity as a city to try and answer this question meaningfully.
And so we've worked closely with the DCAs, both the— or the most applicable bureaus, actually also with the public safety areas as they have fire, and fire does a lot of permitting.
We've worked with a lot of community groups, nonprofits, and for-profits developers, folks who are housing advocates, and also folks who may not in other circumstances necessarily be friends of mine.
And everybody seems to be, you know, that we worked with gave some input into this and seems to agree or see themselves that the challenges we are trying to solve are real challenges, not ones that are so niche that it's not worth the time.
These are the big swings that everybody seems to agree on.
Tiffany Koyama Lane
So it sounds like there's been quite a bit of workshopping, which is great.
And when you say who's on first, is part of that making sure that you're empowering permitting and saying all bureaus, you need to kind of, you need to help out.
We need you to be part of this.
This is happening.
Is that part of it?
Byron Balog
Absolutely.
Council President Dunphy
Yeah, absolutely.
It's about structurally giving direction to the right.
To the various bureaus to say that this is the important, you know, order of operations, that this is how we are going to get this permit done.
We're going to get it out the door.
We're going to get it done in a time.
And this does empower those bureaus to— and gives clear direction on the path we want to move forward.
Right now, code writing and code implementation are done by different bureaus, right?
Even within the code writing, there's multiple places within the city that also write code.
And this at the very least gives us a place, I mean, day to day, I'm sure that some of the specifics won't change, but when we are able to actually see that there's a conflict, this will empower the bureaucracy to say, actually, this is how we're going to move forward.
Tiffany Koyama Lane
Thanks for explaining.
And when I was hearing about it, it was reminding me, I was making sense of it and thinking about Vision Zero work and how the ask was like it needs to be seen as citywide and we need to have different bureaus being able to be nimble and work together.
So that makes sense to me.
You can answer this, or feel free to bring up DCAs.
How—.
What do we— what is needed for this team, this work to be done properly, for it to be resourced?
What's the capacity that's needed?
Is there a financial ask?
Is there work that's not going to happen?
Is this—.
Yeah, can you speak to that a bit?
Council President Dunphy
Yeah, invariably there will be a financial We are going to need to resource these folks to be able to do this work.
I don't know what that looks like.
And I think partially I'm leaving that to council to help us decide based off of what comes back from the administration.
We wanna see what the plan is and based on what the plan is and what this council agrees to, that will help determine the resource requirements.
But that is an expected—.
Okay.
Today, this is not us obligating our future selves to anything without future proactive efforts to say, yes, this is what we're doing and this is how we're gonna pay for it.
Tiffany Koyama Lane
So we are asking in this resolution, come back to us and let us know what you need?
Council President Dunphy
More or less, yeah.
To come back and say within a set timeline, this is the permit team, these are how we're gonna move these things.
Tiffany Koyama Lane
Okay, thank you, Council President.
I think these questions are maybe for Donny and Millicent, my next 2.
I'm interested in understanding if there are changes that we need at the state level to improve our local permitting processes.
I know last year, as a city, we supported accessible housing legislation that touched on building code.
So are any of the service areas planning to work with OGR on any concepts or advocacy for the upcoming session?
Donny Oliveira
Thank you for the question, Councilor Don Oliveira, for the record.
Councilor, we are always responding to state action.
In fact, BPS is working on a code project that council will be contemplating later this year that is taking state adopted code and aligning our city code, and simultaneously we're always advocating each session for pieces that we think are relevant to improve to improve our systems both from a code perspective and authority.
We always want to retain as much local authority as possible.
So kudos to OGR for constantly fighting for that stance.
Related to this specifically, you know we touched on size.
I think that's a place that we always look at.
Land use continues to be a place that we want more flexibility from state related to everything from brownfields cleanup, even to improving our ability to navigate building code and land use code related to housing.
So the answer is yes, we'll be putting forward some ledge session issue sheets from the service area that we hope council will support as we continue to improve.
Thank you.
Any thoughts, Director?
Millicent Williams
What he said.
Tiffany Koyama Lane
Love it.
And I know we're starting to head into those conversations already with what we want to ask OGR to be talking about.
So yeah, if anything else comes up, but I wrote down local authorities, seismic, and land use.
And if you want, if it's helpful for us to be, for myself, I can say, to be talking to OGR about some of those That would be— I would love to hear, because I know permitting is very important.
Um, and then my last thing is kind of a joke but kind of not.
I just feel like we have so many acronyms, and I was like, is— are we going to call this team PIT?
And can we just not?
Can we just like not?
It like just makes me think of like the pits and also like Pitocin, um, which is what they say in, in the hospital, and they're like, give them more PIT.
Or maybe are you already giving— or is this team already called the PIT?
Donny Oliveira
We were looking at some other names, maybe PITA, trying to find an A, something more delicious.
Tiffany Koyama Lane
Or just like, just, yeah, do we need another acronym?
Like, just say the words.
Millicent Williams
Permit Improvement Team.
Donny Oliveira
Yeah, this committee loves its acronyms, Councilor.
Tiffany Koyama Lane
Ignore me, and I'll, I'll support, I'll support the PIT if needed.
Thank you.
Candace Avalos
You're silly.
Um, all right, Councilor Novick.
Steve Novick
Thank you, Madam Chair.
I actually put myself in the queue because, uh, Director Williams piqued my interest when she said she might say other things and Speaking as PBOT director, so I wanna ask you to do that.
But before that, there are 3 other things I wanted to say.
One is that I fully expect that the path forward we hear from staff in another 150 days will be a path forward that will take time and resources to follow.
Nobody's gonna make a— wave a magic wand and make everything better easily.
And Council President, there were 2 things you said I had to respond to.
One is that O.G.
Ananobi and Jalen Brunson have already saved New York City, so that's taken care of.
We don't have to do that.
And the other is that studies show that cities named after former Postmasters General of the United States have always led the nation in permitting.
So beating Gresham might be a stretch.
Director Williams.
Millicent Williams
Yes, thank you so much, Councilor Novick.
Millicent Williams, for the record, Director of the Portland Bureau of Transportation.
In my previous statement, I indicated that I'd be happy to share insights from a bureau perspective.
I will also note that Director Kooch is here from PP&D who might be able to share even a different perspective.
I will share that PBOT is excited about continuing to be a part of the process.
We continue to try to find opportunities to help to streamline, but as has been indicated pretty clearly, it's been articulated pretty clearly, the conflict is with the code.
Code.
Um, there are, um, pages and pages and reams and reams and notebooks and notebooks and tables full of code that need to be deconflicted.
And once that happens, and when that happens, uh, we can anticipate that things will move much more quickly, uh, much more, um, equitably, and, uh, in ways that are defensible by all of the bureaus.
Um, none of the bureaus wanted speak for each other.
And I think that it is important for there to be the identity that's important for each of the— especially Public Works bureaus— to maintain, because there are components of our work that's really important that we preserve.
But in each of those instances, if it's the Water Bureau, if it's BES, if it's PBOT, we're also willing to have the conversations about how can we work most closely with the development permitting team, as well as our sister bureaus within Public Works.
To identify solutions.
So there have been some individual instances when we've come together to look at how we might make things easier, how we can service a specific need.
There are tons of opportunities, and one should not have to come to this body to get quick action.
They should be able to go through the process, and that is something that we look forward to as well.
Regarding the appropriate authorities to help to make those ultimate decisions, and this is something that the DCA and the city administrator, mayor, former city administrator, and DCA, Donna Paul, discussed is the role of that ultimate decider.
Um, is that a bureau head?
Is that a DCA?
Is it the city administrator?
Or is it something like a city engineer, uh, which is not something that we have as a standalone function right now that lives within PBOT?
Uh, it is a role, it is not a position, but that is something that has been explored as we've considered how to ensure that there is a person who can serve as the referee or the arbiter between, uh, what should be happening and what is happening.
Peter Finley Fry
That—.
Steve Novick
Is that something that y'all are continuing to explore, the idea of a— yes, an overall city engineer?
Millicent Williams
Yes, and that's something that we've discussed even with, uh, Council President Dunphy, uh, in our conversations.
Steve Novick
Thank you.
Candace Avalos
All right, Councilor Pirtle-Guiney.
Elana Pirtle-Guiney
Thank you, Chair.
Um, Councilor Koyama Lane, I can't believe you want to give up the opportunity to talk about our city pit crew kicking the tires on our permitting department.
Tiffany Koyama Lane
So I can make an event, maybe.
Elana Pirtle-Guiney
Okay, I know a few people have mentioned cost already, but there's a cost to even putting together the what of what we might do in the future.
And I want to ask the question that Councilor Koyama Lane did, but about the first part of this work, which is what will it cost or what will we not do over the next 150 days while you all put together a plan for us to think about planning?
Donny Oliveira
Yeah, thanks for the question, Councilor.
So take one step back real quick.
One of the most significant things the prior council did when they created the first Permit Improvement Task Force was to resource it to be staffed.
So that allowed those staff to work with the bureaus to come up with what ultimately became PP&D and the first code element project.
So that was, you know, essentially 4 FTE over 2 years.
For us to continue CAP 2, we were able to internalize a couple of those positions, one within PP&D, one within BPS, to keep that work going for CAP 2.
But we're going to rely on existing staff.
And this is what I was alluding to earlier.
Our existing staff went within all the bureaus.
I can say this comfortably.
There's not a bureau that, that this doesn't include.
Thank you.
Everybody is overleveraged.
Our best reviewers, engineers, planners, they have full workloads.
And so now if we're asking them to not give up anything, keep your workload, and oh, by the way, now you're going to be a part of a team that is going to develop the next phase of code alignment or the next phase of permitting, that's just unfair.
So if we're asking— when we come back in 150 days, we do expect to come with a— if we want to do this well, here's what we're going to need to do.
Thank you.
Need to resource that work to make that big change.
Can we get to the first 150-day milestone with existing staff?
Yes, I think that's reasonable.
Again, I think somebody— a councilor mentioned this already— there are already great ideas in the bureaus.
We don't have to fish very hard.
We're hearing great feedback from our community partners and stakeholders.
We don't have to fish very hard for what's next.
It's do we have the time and resources to implement that next plan?
So we have the resources to get to 150-day mark We have the resources for that 60-day cap to scoping.
That's already in play, by the way.
But what comes after 150 days, that will be the question that will come back to council for, for support.
Elana Pirtle-Guiney
And that 150 days will fall sometime in between the fall TAO and the next budget, correct?
Which means there may be a bit of time we're waiting there.
Donny Oliveira
Yes.
Elana Pirtle-Guiney
Can you give us a sense of scale?
We're finishing up the this budget work, everyone is already going to start thinking about next budget.
We don't expect to have a lot of extra money.
What should we be contemplating in terms of scale needing to do here?
What are we walking into?
Donny Oliveira
I, I'm going to speak right now, just something, a brief conversation I had with DCA Donna Paul, but this does not encapsulate the full, you know, brain trust of our city.
It's possible that we're going to come with a couple of different options like the, you know, what did a 4-FTE team, would that look like for CAP 1?
And then something more robust, something that Council President's been pushing us to do, like what would be the major move, the moonshot maneuver?
And we'll put a, you know, put a resource allocation to that and then we'll discuss it.
But there's probably going to be something that looks like that, Councilor, because I don't—.
Elana Pirtle-Guiney
We're talking between 4 and 10 people-ish?
Donny Oliveira
Yes, that seems reasonable.
Elana Pirtle-Guiney
Okay.
I promise I won't hold you to a specific number.
But scale is helpful for me.
Donny Oliveira
That's right.
And again, this is the goal here is, again, we have super talented people within PBOT, BPS, PP&D, water, et cetera, but they all have incredibly overleveraged work plans already.
So to continue to tap them is just unfair.
And I think they would love a little support anyway.
So I think we can resource them to do their ongoing work and this new workload.
Elana Pirtle-Guiney
Thank you.
I agree with many of my colleagues that this is important work.
We should be a city where people know that we have policies that match our values, but an easy path to navigate them to get permits, and a path to the point that we heard earlier that we actually require everybody to follow, which is easier to do when our code is simpler.
I think this is important work.
I am not without a bit of nervousness about it though, and I want to state that for the record because I think it is important when we do reform work like this that we don't swing the pendulum too far the other way.
And everything that I have heard our chief sponsor, co-sponsors, our leads within the administration say is right on track with where I hope this goes, where the proposal goes, and where the work of the group that we presumably put together next year goes.
But I'm also looking at a 4th be it resolved that doesn't just say the administration will consider, but that the administrator must ensure that the improvements do things like address change of use and occupancy requirements, non-conforming conforming use requirements.
These are things that can start to creep into policy changes.
And what I'm hearing promised is this isn't policy change, this is streamlining, this is reformation, this is keeping the policies that ensure we build to our values but doing it better.
And so I have a little nervousness.
I'm looking at the next resolved that convenes an advisory body with external stakeholders and experts, which is critically important.
Those are the people who know best what reforms we need to make.
They are also the people who may want some of those policy changes.
And so I will be asking when we get that preliminary piece of work back in 150 days to get information and to really walk through with us what of these changes are what of these changes are deconflicting?
If so, how was the decision made about how we deconflicted?
Where do we start to border on policy changes that might require their own discussion and debate?
Not because the policy change is inherently bad, but because when we wrap up policy changes in what look at the surface like technical administrative changes, we lose trust in the stakeholders who ask for those changes— or from them, rather, right?
Every piece of code there was put there for a reason.
They don't all need to be there, but I want to make sure that the work that we are asking to have done today is the work of deconflicting and streamlining and making this a city where our permits reflect our values and allow people to navigate them in the easiest possible way of any city in the region, and that we're not stepping into that policy work in a backdoor sort of way.
Council President Dunphy
I will say that as, as the, the chief sponsor of this, it is absolutely my intention that we are not currently changing policies and that this absolutely will result in a point where some policies will need to be changed, and this council will be the body to be able to have those conversations.
This really absolutely is, as I think you were leading towards, that this is about process.
This is about arranging our own house, but that when we have those policy conversations that will inevitably come out of this, we will be able to move that direction.
Elana Pirtle-Guiney
I would ask that when those policy changes do come to us, they come as standalone policy changes.
Mitch Green
Yes.
Donny Oliveira
Separate from the more administrative Councilor, but I think you are— because I don't want to, um, understate that if, as we evaluate our permitting processes, we're going to see procedures that the administration largely has a lot of control over.
We're going to see code that we're going to need you to help us clean up because the intent is not being met how the code's being administered, and we need some true-ups there.
And there may be some things that we that need to do that we are not see in the code.
Candace Avalos
I think that's a good point.
Donny Oliveira
Actually this is a policy change.
The, the world has changed, City of Portland values have changed, whatever it may be that we think a code alignment is not just improvement but actually a change.
And we will— and, you know, to Council President's point, there will be a moment, you know, or two that will bring something that's distinct that supports the whole thing.
And I also just want to flag that because, uh, it got mentioned briefly earlier, there's the CAP2 work, but there continues to be a bunch of work around Councilor Zimmerman and Morillo's design review work, that is essentially improvement of our permitting system, very discrete.
So there's a whole suite of things that I know from a CEDSA perspective we're trying to get our hands around, like how are these things all interacting together and what is code, what is policy, what is just procedural that we need to almost Gantt chart and map out for council and the public to see, oh, these are the different moving parts.
But there—.
I don't want to undersell that there's probably a policy Certainly.
Elana Pirtle-Guiney
And I just hope that those come separate from the administrative pieces and that they're presented with clarity that this may come out of an administrative process, but it is a big policy decision, as opposed to what I hope is a robust package of more procedural changes that allow us to get moving quickly on the other parts of this.
Councilmember Herbold.
Council President Dunphy
Councilor Pirtle-Guiney, if this resolution passes today, you have my personal assurance that I will make sure that administrative easy decisions come separately from any of the meaty policy directional changes that we need to take as a city.
Those deserve the time and space.
We don't need to waste our time on some of the more boring administrata, but these sort of things, absolutely, I will make sure that we're not gonna be sneaky.
We're not gonna sneak something in as a big package or say, oh, well, you know, you have to vote on this 100 other things, but this one detail you have to worry about.
I won't do that.
For the rest of my time in office, I will take— you know, part of my commitment in bringing this is the follow-through.
It's not enough to just bring a resolution to committee.
So I want to see the same success that you see.
Elana Pirtle-Guiney
Thank you.
I appreciate your commitment and our administrative commitment on doing So thank you, Chair.
Candace Avalos
Okay, thank you.
And Councilor Koyama Lane?
Tiffany Koyama Lane
Thank you for your questioning, Councilor.
That helped me.
Um, I— it also made me look a little bit closer about the advisory body piece of this.
Can someone speak to that, when that would start, um, and about how that would be staffed?
Donny Oliveira
Yeah, Councilor, thank you.
So, um, we have experience with this many times over, uh, and when we had the first Permit Improvement Task we met on a regular basis.
We had quarterly updates, and it was really a sounding board where we, you know, we did big surveys and we would do stage gates with them.
Like, here's what we're, you know, we're thinking about.
Does this look good?
Feedback from that.
And that was really effective.
And I just want to acknowledge the comment that was made.
It was a range of stakeholders.
It was big builders, home builders, small, you know, ADU builders, tenants, developers, and and the city staff.
So we had a range of stakeholders involved, and I would make a statement here to say that we're— I'm confident that we'll have a similar mix of engaged advisory body members.
But it's something that will be built in, and we'll daylight that as part of the 150-day plan when we return.
Tiffany Koyama Lane
And this would be one of the official ABCs of the city, the appointed boards, commissions?
Donny Oliveira
Great question.
I don't—.
That's something we'll have to talk to okay.
Tiffany Koyama Lane
Yeah, I know the 3 of us were on the Governance Committee and just talking about how many ABCs do we have and let's make sure we are intentional about those.
And so I am happy to support this and maybe would love some more information about that at some point before it comes to full council.
Thank you.
Candace Avalos
All right.
Thank you, colleagues.
Seeing no one else in the queue, I would entertain a motion to move Resolution Document Number 2027 to the full council.
So moved.
Mitch Green
Second.
Candace Avalos
Moved by Councilor Novick, seconded by Vice Chair Green.
Any further discussion?
Seeing none, Diego, please call the roll.
Diego
Pirtle-Guiney?
Elana Pirtle-Guiney
Aye.
Diego
Koyama Lane?
Tiffany Koyama Lane
Aye.
Diego
Novick?
Steve Novick
Aye.
Diego
Green?
Mitch Green
Aye.
Diego
Avalos?
Candace Avalos
Aye.
Diego
With 5 ayes, the motion carries, and the resolution document number 2026-203 will move to the full council with a recommendation it be adopted.
Candace Avalos
Thank you, colleagues.
So we are gonna take a 12-minute break.
It is currently 3:28.
Please be back at 3:40 PM.
Thanks.
Okay, I am going to call this meeting back into order.
And Diego, please read item 4.
Diego
Item 4, establish 2026 sale price cap for the Homebuyer Opportunity Limited Tax Exemption Program.
Candace Avalos
All right, colleagues, like I said at the beginning, we've got 2 ordinances coming for— from the Housing Bureau to us.
This one, um, the Home Homebuyer Opportunity Limited Tax Exemption, or HOLTY, is a city program authorized by state law that helps income-qualified homebuyers purchase newly constructed homes through a property tax exemption.
State law requires that the city establish an annual maximum sale price for homes eligible to participate in the program, and so today's resolution sets the sale price cap for the 2026 calendar year.
And I will go ahead and hand it over to Interim Director Light and Josh Roper from the Housing Bureau to walk us through Good afternoon, Chair Avalos and committee members.
Queesha Light
Thank you.
Chair Avalos has provided a great summary, so I will not take up any more time.
I know you've had a busy afternoon.
As she stated, though, the HOLTI is a tax exemption incentive for developers and homebuyers intended to make homeownership more accessible to Portlanders.
And I'm going to just also tee up the next one, which I think is also a critical piece here.
The next agenda item is the approval of the The second agenda item is going to be a presentation on our proposed ordinance that's adjusting the Affordable Housing System Development Charge Exemption Program that's administered by the Housing Bureau.
And I would just say that both of these are not major policy changes.
I see them as practical adjustments that help to ensure that our housing system remains usable, you know, it remains aligned and responsive.
So I'll turn it over to Josh Roper, who will walk through both items for us.
Thank you, Councilor Smith.
Josh Roper
Thank you, Queesha.
Hi everyone, Josh Roper, Policy and Planning Director for the Portland Housing Bureau.
Thank you for having us.
I'm going to start, as Queesha said, with the HOLTY, Homebuyer Opportunity Limited Tax Exemption, resolution.
So we're going to start with a little background on what HOLTY is.
The HOLTY program aims to increase the production of affordable homes and make those homes affordable to low and moderate income households through tax savings for homebuyers.
Homes must be sold for less than the annually established sale price limit, and homebuyers must meet income eligibility criteria to qualify.
HOLTI provides a 10-year property tax tax exemption on newly constructed homes for buyers with immediate— with an income at 100% or below.
In Portland, by agreement with the county, we're limited to 500 exemption applications per year, except that nonprofits can use the program and are not subject to the annual 500-unit cap.
We're required by law to establish the sales price cap, and the statute, the state statute, allows the cap to be up to 120% of the median sales price.
In 2025, the sales price cap was $455,000, and spoiler alert, we are recommending keeping it right there.
The median home sales price in 2025 was $520,000.
That's the end of November of last year, and that's 14% above the current cap.
So you'll see we could in theory recommend a much higher sales price cap than we do recommend, and we'll explain why we're at a lower number.
But before that, I just want to flag the value of HOLTI to developers and homebuyers.
So on average, $3,500 tax savings per year.
And then a little bit about the purchase price analysis that the development incentives team engaged in and the recommendation from the Housing Bureau.
So homes sold through the HOLTI program sold last year for an average of $328,522, which is well below the maximum price program purchase price of $455,000.
For that reason, we are recommending maintaining the maximum sales price, that sales price cap at $455,000.
We had a meeting that included developers and owners in December of last year, and during that meeting, there was general agreement that this was an appropriate path forward.
And that is the presentation on Holti.
Happy to field any questions.
Candace Avalos
Thank you.
Um, we don't have anyone in the queue yet.
Do we have any public testimony?
How many, uh, do we have listed?
Diego
We have one individual signed up.
Candace Avalos
Okay, Councilor Pirtle-Guiney, are you okay with taking testimony?
Elana Pirtle-Guiney
Absolutely.
I had thought you were moving to questions, so I put myself in so I didn't miss the Okay, no worries.
Candace Avalos
Let's go ahead and do testimony, and then we'll bring you all back up for some questions.
Thank you.
Go ahead, Diego.
Diego
Lacey Sutton.
Once more for Lacey.
Yeah, that concludes testimony.
Candace Avalos
Okay, sorry.
Come on back.
Musical chairs.
Go ahead, Councilor Pirtle-Guiney.
Elana Pirtle-Guiney
Thank you, Chair.
So it looks like the housing being purchased is at a much lower level than the cap pretty consistently.
I have 2 questions about that just to understand this.
Are these generally, um, houses that are being purchased which are subsidized construction new builds, or is this market rate naturally affordable housing that is selling for that price?
What is the— what is the subsidy being used to help people purchase?
Josh Roper
Yeah, generally these are market rate, more affordable housing opportunities.
So yeah, you're naturally occurring affordable.
Lacey Sutton
Okay.
Elana Pirtle-Guiney
And as we look at that significant gap between the average price and the cap.
Is the goal to have the cap at a level that gives buyers flexibility but helps to limit us to the 500 people?
I guess I'm wondering— there's no proposal to lower it.
Lowering it would obviously give buyers less flexibility in what they purchase but might help give us a better sense of what the need is and ensure that folks with the most need are in that 500.
Can you explain why we haven't lowered it?
And also, do we push the limit of the 500?
Do we get far more applicants than that?
We're tapped out by halfway through the year, or is 500 a reasonable level there?
Josh Roper
I believe 500 is a reasonable level.
500 that are outside of the, the the nonprofit category.
That's my understanding.
I will also say that the sale price cap and the conversation we have with developers and owners, there's sort of a back and forth between the increasing cost to build, to develop, the increasing cost of the entire process that folks are going through to get these online that puts pressure on the sale price cap to go up.
But on the other hand, right, we have this historical data that suggests in reality we're looking at lower sales prices.
So for a while we've been in this kind of static, you know, pressure from both sides, and we're going to kind of land in the same place we landed last year because it's been working pretty well.
If that helps.
Elana Pirtle-Guiney
That does.
And when you talk about the exemption for nonprofits, And that is for nonprofit housing developers.
The company developing the housing is a nonprofit, and there are other exemptions for those entities.
Is that correct?
Josh Roper
That's right.
And the, the HOLTI is actually applied for by the developers, so it is sort of transferred to the homeowner when they become the owner.
Elana Pirtle-Guiney
Okay, so when you say exempting nonprofits, those are nonprofit housing developers as opposed to the HOLTI, which is designed for your for- For-profit businesses that are developing housing at various levels of affordability.
Is that correct?
Josh Roper
They can both take advantage of HULTI, but in both cases it's the developers who actually apply for the HULTI.
And then when you buy the house, if you're the home buyer, then you become eligible for the remainder of the HULTI.
Queesha Light
There's 500 for one group and 500— the 500 cap for one group and a 500 cap for the other.
So nonprofits have their own $500,000 cap and individuals, developers have their own.
Elana Pirtle-Guiney
And this level would apply to both?
Josh Roper
The sale price cap?
Elana Pirtle-Guiney
Sale price cap.
Josh Roper
That's right, yeah.
Elana Pirtle-Guiney
Okay, thank you very much.
Thanks, Chair.
Candace Avalos
Sounds good, thank you.
Colleagues, any further discussion or questions?
Vice Chair Green?
Mitch Green
Thank you.
Do you have any insights— thank you so much, Josh.
Do you have any insights on why the average sort of seems to— average sales price sort of seems to peak in 2021 and then kind of decline in level?
Like, what are the underlying factors that are contributing to that?
Josh Roper
I think it might have something to do with the middle housing efforts.
From the city because we are seeing more of those fourplexes, sixplexes, those sorts of typologies taking advantage of the HULTI.
So I would think that is probably what you're seeing in play there, that kind of taking off.
Mitch Green
And so the residential infill program for homes?
Josh Roper
Yeah, exactly.
Mitch Green
Okay, that's, that's very encouraging actually.
Yeah, that's great.
I see no reason why I would not vote for the—.
Very—.
Seems very sensible to not raise this at this time.
Uh, pretty, pretty case closed.
So thanks for the presentation.
Um, I, I think that data point though that we've just teased out is a really, really important piece for the broader— the Bureau's broader efforts, and frankly this previous discussion that we were talking about, the code alignment project.
So I'll be watching that.
I think that's, um, those are green shoots for the City of Portland and Um, uh, thank you.
Candace Avalos
Thank you, colleagues.
Um, our testifier, uh, is back.
Are we all right with letting them up real quick?
Okay, come on up, Lacey.
You all can just stay put.
Tiffany Koyama Lane
We're good.
Lacey Sutton
So sorry.
Um, yeah, it's me again.
This is the last one.
I'm Lacey Sutton.
Uh, I just wanted to make sure that you're all aware that the 10-year tax exemption period begins when the home builder receives it, not the home buyer.
We are on that agenda item, correct?
Okay.
In our case at Cherry Blossom, Habitat for Humanity got it in 2021.
So when we bought our new house in 2023, we paid $900 to apply for what Proud Ground repeatedly referred to as a 10-year tax exemption.
No one explained that that period had already begun.
So for us, it will only be an 8-year tax exemption, and there are people who moved in long after And all the neighbors I've spoken with had no idea.
They thought it would be 10 years as well.
Considering that when this exemption period ends, homeowners will suddenly have to pay hundreds of dollars more per month, I think it's pretty important that they know when to expect that to happen.
I know from speaking with affordable housing people that this looming drop-off is a big concern, and while I don't have any hard data, I think it's quite possible that families have lost their homes or will lose their homes because of this, because their mortgages will instantly increase by like $300, $400.
And this will be on top of regular increases to their HOA dues, because almost all, if not all, new affordable homes have HOAs now.
It's the only way developers can put dozens of homes on a single lot.
HOA dues are hundreds of dollars a month in addition to the mortgage.
We've already had 2 homes go into foreclosure at Cherry Blossom for unpaid dues.
It's a serious problem that is only going to get worse.
A special assessment alone could easily bankrupt families.
Low-income HOAs are a horrible idea.
But back to, to this, um, is it the Holti?
If I was here, I would have heard.
Um, I just, I feel like It might need a new acronym because the 10-year Homebuyer Opportunity Limited Tax Exemption just isn't accurate, or they need to not give years of this exemption period to the homebuilder.
At the very least, PHB needs to be extremely transparent about the fact that it's not going to be 10 years for the homebuyer.
This is especially true for homebuyers who don't speak English as a first language.
From discussions I've had, this information is just not being accurately conveyed to them.
I think most people would still happily take a 7-year discount on their property taxes, but they need to be made aware that it's up in 7 years, not 10, so they can be as financially prepared as possible for that day.
Council President Dunphy
Thank you.
Candace Avalos
Thank you, Lacey.
Councilor Koyama Lane.
Tiffany Koyama Lane
Thank you, Chair.
I'm wondering if one of you could Sure.
Josh Roper
So we are setting a price cap for what you can, as a developer, sell a house for to a potential buyer.
Okay.
Homebuyer, that's the maximum you can charge for that house and still qualify for this HOLTI tax exemption.
So if I'm a developer, I want to develop some townhouses, I can only sell those townhouses if I want the HOLTI for up to $455,000 each.
And there are also income well done.
Good, thank you.
Candace Avalos
Is that all, Councilor?
Okay.
Um, anyone else in the queue?
Any other further comments?
Okay, well then, with that, let me get the language up here.
All right, so I would like to entertain a motion to move— hold on, I don't think this is the right language.
Apologies, one second.
Um, I think the reason I'm confused is Because it says— am I— it's moving ordinance document number 2026-204.
Is that how you have it?
Diego
Resolution.
Candace Avalos
I think that's why I'm confused.
I keep seeing resolution and ordinance all over my document.
So this is a resolution.
So then I will say I'd like to entertain a motion to move the resolution document number 2026-204 to the full council with a recommendation to pass.
Mitch Green
Second.
Candace Avalos
Okay, moved by Vice Chair Green and seconded by Councilor Novick.
Uh, let's go ahead and call the roll.
Diego
Councilor Pirtle-Guiney?
Elana Pirtle-Guiney
Aye.
Diego
Councilor Koyama Lane?
Tiffany Koyama Lane
Aye.
Diego
Councilor Novick?
Steve Novick
Aye.
Diego
Councilor Green?
Mitch Green
Aye.
Diego
Councilor Avalos?
Candace Avalos
Aye.
Diego
With 5 ayes, the motion carries, and the resolution document number 2026- We'll move to the full council with a recommendation it be adopted.
Candace Avalos
Okay, thank you.
Well, uh, you all are still on the hook because we've got another one coming.
So our second ordinance from the Housing Bureau proposes to temporarily remove the income requirement for homebuyers using the Affordable Housing SDC exemption program, expanding the pool of homebuyers able to access programs.
It will also allow home builders receiving exemptions under the SDC exemption program which the council passed last July to sell units without needing to find an income-qualified home buyer.
So I'll hand it back to you all for more information.
Josh Roper
Thank you.
Um, let's see, there we go.
Diego
Sorry to interrupt, if I may, Chair, uh, open the item.
Candace Avalos
My bad.
Yes, please open the item.
Diego
No problem.
Um, Item 5, amend partial and full exemptions of system development charges for Affordable Housing Development Code to temporarily remove income requirements for homeownership units, amend Code Section 30.095.
Candace Avalos
Thank you.
All right, take it away.
Josh Roper
Thanks.
So the second item we're presenting is an ordinance that adjusts the Housing Bureau's affordable housing system development charge or SDC program for homeownership.
I'm going to start by briefly explaining why we're proposing this adjustment.
When the temporary SDC exemption program passed last year in 2025, we anticipated that there may be interactions between that new temporary program and PHB's existing affordable housing SDC exemption program that would warrant further consideration.
And we heard about one concern in particular.
We have heard about one concern in particular.
Developers who took advantage of the Housing Bureau's Affordable Housing SDC exemption program are required to sell to income-qualifying homeowners, while developers who take advantage of the temporary 2025 SDC waiver are not required to sell to income-qualifying homeowners.
I have a question.
Developers and owners have expressed that this creates a competitive disadvantage that they would like to see addressed.
Given these considerations, along with the time-limited nature of the broad 2025 SDC waiver and the overlap of these 2 programs, we believe it is appropriate to remove temporarily the income requirement from the Housing Bureau's Affordable Housing SDC exemption program.
This one is even harder to explain to a 5th grader, so I apologize.
On the next few slides, I'm going to describe the PHB Affordable SDC Program, the temporary SDC waiver— that's the 2025 change— and then the proposed ordinance that's in front of you in more detail.
Thank you.
So the Affordable Housing SDC Exemption Program, this is the one run by PHB.
So we administer this program and it provides an incentive for the development of affordable homeownership and affordable rental housing.
But we're going to be focusing on the homeownership side of this program, not the rental side of this program.
This program is separate from the temporary SDC exemption for new housing units that began in August of 2025.
For the homeownership program, homes must be owner occupied, and this ordinance would not change that requirement.
It would continue to require owner occupancy for units taking advantage of this PHB-run program.
And currently, homebuyers must income qualify by earning no more than 100% of area median income, family income for a household of 4.
And that's the piece that would be removed temporarily.
The temporary SDC exemption program.
So this is that 2025 change.
Council passed Ordinance 192082 that temporarily exempted for new housing, pretty much all new housing in Portland, exempted those units from system development charges if the permit issue date was between August 15th, 2025— or excuse me, sorry.
Yeah, council passed this ordinance.
It temporarily exempted system development charges for new housing in Portland with permit issue dates between August 2025 and September 30th, 2028.
So that period of time, generally speaking, no STC charges for new housing units.
The temporary STC exemption program applies to nearly all newly built residential housing units and is not limited to regulated affordable housing units.
Homebuyers purchasing units that received the temporary STC exemption temporary SDC exemption do not need to income qualify.
So this is where that competitive disadvantage that we're hearing about from developers and owners is coming from.
So the code amendment proposal that's in front of you, this ordinance would temporarily remove the income requirement for homebuyers purchasing qualifying homes benefiting from the affordable housing SDC exemption program that PHB runs.
Program.
Removal of the homebuyer income requirement would only apply to affordable housing SDC homeownership units with building permits issued before January 1st of this year, January 1st, 2026, and the adjustment would extend to September 30th, 2028 to align with the end of the temporary SDC waiver.
So the idea here is we're trying to address the developers and that got kind of stuck in this limbo with these overlapping programs.
This wouldn't impact or change the temporary SDC exemption program, and there are some technical fixes and a clarification around penalties for noncompliance with the program in the ordinance as well.
And that is the presentation.
Happy to discuss.
Candace Avalos
Thank you.
Thank you.
Uh, I believe we have one person to testify.
Yes, let's go ahead and call them up, and then we'll get to councilor questions.
Diego
Justin Wood.
Candace Avalos
Welcome.
Go ahead.
Justin Wood
Welcome.
Good afternoon, councilors, and thank you for the opportunity to provide some testimony in support of this proposed amendment to the STC waiver program.
My name is Justin Wood.
I'm with Fish Construction Northwest.
I've been building homes in Portland for more than 25 years with a focus on middle housing, infill development, and affordable homeownership.
That's pretty much all we've ever built.
I also just briefly want to tell you that I'm fully glad that you guys supported the CAP 2 project.
Several years ago, I was the chair of the Development Review Advisory Committee, and we had several meetings with Commissioner Nick Fish.
And when he was the Thank you.
I was the director of that department, of BDS, and I'm glad to see that we're continuing these efforts.
Over the majority— over the course of my career, the majority of homes I've built have utilized the city's SDC exemption and the HOLTI program, which you just were just talking about.
These programs have been critical tools in helping us provide homes to families at or below the median family income and helping them achieve homeownership.
Without these, many of these homes simply would not have been affordable to the families that have been able to purchase them.
Thank you.
The Portland SDC and the HOLTI programs are excellent examples of how local governments can create meaningful pathways to affordable homeownership.
I recently sat on Governor Kotek's Housing Production Advisory Council, and I frequently pointed to Portland as a way, an example of how cities can do good things to help, and that you guys have model programs for how to do that.
Last fall, when the council took an important step to encouraging housing production by temporarily suspending the SDC fees on residential new construction, Thank you.
Josh Roper
Councilmember Herbold, you have the floor.
Thank you, Mayor.
Justin Wood
Councilmember Herbold, I appreciate the question.
Me and most everybody in the housing— in the homebuilding community supported that decision as a way to increase housing production.
However, that policy change also created an unintended consequence with us for the small number of us builders who do use the affordable housing SDC program.
Beginning in late 2025, we started to see ourselves competing against new construction homes that also benefited from the new waiver— waived SDCs that the council passed.
Passed last fall but didn't require the buyers to meet the income qualifications.
Meanwhile, our homes were still subject to those restrictions, significantly reducing our pool of eligible buyers.
We have lost sales to families who preferred our home but couldn't because they might have been slightly over the income cap, and so they chose to purchase a house down the street from somebody else who didn't have the same income cap.
Um, you can ask yourself if you have a home here yes.
So if you have Home A and Home B and they're priced at roughly the same price and Home A says, I need you to submit documentation, I need you to give me your income, and I need to give you all this stuff so I can sell you my house at this price, and Home B doesn't have to do any of that stuff, why would anybody submit all the applications to do Home B?
I want to be clear, this isn't a new subsidy.
This is just, you know, these are SDCs that have already been waived.
We're just simply asking the council to fix an unintended consequence of a policy change Thank you.
This just creates a level playing field and allows us to sell homes, to continue to sell homes and affordable homes to the market.
You know, we've been a longtime partner of the city, I think, in trying to do the right thing and build affordable housing.
That's something we've always felt proud of and feel important of.
And I just ask that the council try to do the right thing and kind of keep being good partners with us.
And I appreciate PHB for taking the work on this and addressing this issue.
And happy to answer any questions you might have, but thank you.
Candace Avalos
Thank you for your testimony.
Diego
That concludes testimony.
Candace Avalos
All right, let's go ahead and get in the queue, starting with Councilor Koyama Lane.
Tiffany Koyama Lane
Thank you, Chair.
So I understand that this item would— should make it easier for developers to sell— was it about 700 homes that would be eligible.
Can I hear an explanation of how this change would benefit or be challenging to potential homebuyers?
How do we expect this change to impact families, specifically families that maybe would qualify under the current income limit, and this would be a pathway for them to get a home in Portland?
Josh Roper
Yeah, I think this is where the balancing happens.
You know, I wouldn't Councilmember Herbold.
I wouldn't necessarily be comfortable with this as a long-term strategy, but I think given the overlapping programs and this— what we've been describing as this limbo that some folks are finding themselves in and this competitive disadvantage, I am comfortable with this approach.
But I do think the point that you're raising around folks who are eligible at under 100% AMI, there is something there.
They lose out on a competitive disadvantage to a degree as well.
So I think it's a question about throughput.
It's a question about resolving the conflict between— or not even conflict, but what I'll keep calling overlap between these programs.
And this is where we landed as as kind of the balance.
But I hear your concern.
Tiffany Koyama Lane
Can you tell me a little bit if this is a balance, what kind of were the other Goldilocks options or kind of that process for what was chosen?
Josh Roper
It was pretty much status quo, how the program is designed versus this approach.
I mean, you could have gone farther.
We could have gone farther and taken away other aspects of the Affordable housing SDC program temporarily as well.
But what we wanted to do was create parity as much as possible between the temporary SDC program and the PHB-run affordable housing SDC program.
So we only focused on the income requirement.
So that's— that was already sort of a middle ground.
So that was the idea behind it.
Tiffany Koyama Lane
That was our idea for balancing these And say this were to pass, is there a plan of how to measure the impacts of this change?
What data would be planned to collect?
Would it be even possible to incorporate the impacts of the changes into larger reporting on the temporary SDC exemption program?
Josh Roper
Would love to better understand just the impact of some of these development incentives and our Yeah, at a minimum, I want to and expect to see informal reporting and analysis around what we will— how the pace of sales changes, because we do have information about home sales when they occur.
So I think we'll see that.
Yeah, I think that's a good idea.
The hope is that it would pick up and that would be the effect that we're looking for to know if this is effective or not.
Whether or not it could be incorporated into the broader, like the PP&D report that they're doing on the SDC waiver, we could discuss that.
Tiffany Koyama Lane
But at this point, it sounds like there's not anything formal in terms of if this passes, how are we going to measure the impacts?
Josh Roper
There's not specific data We have some standing data that we already have access to, so we could do kind of a retrospective analysis, which is what I, at a minimum, have been planning.
But—.
Or not even retrospective.
I mean, it could be in real time.
But no, we don't have a formal evaluation set up.
Sarah Radcliffe
Okay.
Byron Balog
Thank you.
Candace Avalos
Thank you, colleagues.
I put myself in the queue.
I wanted to know first if you all could just talk a little bit about the engagement process that led to this proposal and how feedback from builders and homeowners helped to shape the solution before us today?
Josh Roper
Yeah, it was, um, really outreach without prompting that came from developers and owners who were concerned about what they were facing in the market that prompted this conversation.
I think it was apparent, like I said, that there would be some There would likely be some issue with the, again, overlap between the Affordable Housing SDC program and the temporary waiver.
This seemed like a possibility, but we weren't sure what aspects would be creating the competitive disadvantage for, if there were one, for developers and owners.
So it was really Thank you.
Candace Avalos
I appreciate you all bringing this forward and working to address an unintended consequence that emerged after we adopted the temporary SDC exemption.
My office spent some time meeting with local homebuilders and developers who raised concerns about the interaction between these 2 programs.
And how it was creating an uneven playing field.
So we appreciated the opportunity to better understand the challenges that they were experiencing and the practical impacts this was having on projects that were already in the pipeline.
Of course, we don't want to hinder projects that already are moving.
And I also just want to thank the developers who took time to engage with council and staff and explain the issue and advocate for a solution.
I think their feedback really helped identify a problem that might not have been apparent and I think this is a good example of, you know, government listening, identifying an unintended outcome, and then making a targeted adjustment to ensure that our policies are working as intended.
Because ultimately, you know, these builders move forward under one set of rules and should not be placed at a competitive disadvantage just because they received the permits before the SEC exemption was created.
So I just wanted to name that on the record and say that I'm pleased I'm pleased to see staff bring forward this practical solution that improves the consistency between these programs while also maintaining our broader housing goals.
And I think as we continue working to increase housing production and more pathways to homeownership, it's important that our programs are fair and predictable and responsive.
So I'm grateful to your work bringing this forward and a targeted solution.
Thank you for that.
Moving on, Councilor Pirtle-Guiney.
Diego
Thank you, Chair.
Elana Pirtle-Guiney
Thank you, Chair.
When a—.
I won't say a specific new unit, but as developers are looking at how to build right now, what I think I remember hearing when we passed the SDC waiver, because we did contemplate that there could be impact on this program, I believe what we heard was that the assumption was that developers generally, I think that assumption has been true.
There are some more complex projects that have come in since that waiver was passed under this program.
Josh Roper
Generally, I think that assumption has been true.
There are some more complex projects There that have come are in since some that waiver was passed more under this program.
Complicated aspects to— there's some tree fee exemptions, some other elements that are— that actually lead to some, I believe, some limited situations where the Affordable Housing SDC program is still preferable.
But generally, that has been borne out and been accurate.
Elana Pirtle-Guiney
And in those cases where this program would be more beneficial, This waiver wouldn't actually apply.
Is that correct?
Josh Roper
That's right.
So in the ordinance, the folks who've taken advantage of HOLTY, of LTIC, and I believe another item that I'm forgetting—.
Elana Pirtle-Guiney
I think it's the street— the tree waiver.
Josh Roper
Yeah.
Are not eligible for this waiver.
Elana Pirtle-Guiney
So I'm struggling a little bit right now, and I'm struggling because it sounds like point in time when we pass the SDC waiver moving forward, one of two things happen.
Either developers choose not to build under this program, or they choose to build under this program because there are other benefits, in which case they must sell to somebody who is income qualified.
I think that's a fair point.
So from the time the waiver was passed moving forward, there actually isn't much conflict between the programs.
It's really building that was done under a set of rules where developers knew what the rules were and penciled out their projects, but who haven't sold yet, and so they're on the market potentially with developments that were built under the SDC waiver without an income cap.
Is that correct?
Josh Roper
I believe so.
Elana Pirtle-Guiney
Okay.
And do we have units that are on the market already that were built under the SDC waiver, or are those generally not yet fully developed?
Josh Roper
I don't believe they're developed yet, but I'm— are there?
Justin Wood
There are homes on the market.
Elana Pirtle-Guiney
Okay, maybe a few.
I guess I'm struggling because Councilor Koyama Lane pointed out that the loser here is somebody who is income qualified currently and can't compete with somebody who is not income qualified and really needs this middle-income housing and who won't have access to it even though the person who developed the housing developed it knowing what the rules were at that time.
And so I hear the concern and that competing with houses that can sell to anybody who can pay any price who had this same exemption, but we're not actually talking about a larger cost of development.
The SDC waiver is there for both.
What we're saying is you have the same cost of development development, you're capped on what you can sell it for, you're not capped on what you can sell it for.
And developers knew the rules they were playing by when they got in the queue.
It's just that the rules changed after they got in line.
So I'm struggling to understand why income quality— why Portlanders who want to own a home and only make 100% of median income are the losers in our solution.
And I just— am I missing something?
I guess my question there is, am I missing something here?
Josh Roper
No, I don't think you are.
I mean, I think there is a balancing here that is happening, and I think there's feedback that we're getting from developers and owners that these units are sitting on the market and are not selling.
So that is on the one side.
And the issue that you're raising is on the other.
And I think it's totally valid.
Candace Avalos
I guess I—.
Queesha Light
I think it's also the assumption that you have the buyers in the market that are 100% and below that are there and ready to purchase.
And I think that's the question that we need to have the answer to, because what we were hearing is that there are a lot of buyers that are 100% and above 100% that are on the market to purchase.
Not necessarily all.
So we— and I think that's the question, right?
Who—.
How many are in the market below that?
Elana Pirtle-Guiney
That's not a problem with the SDC waiver competition, though.
That would be a problem with whether we are overbuilding what people at 100% or below can buy.
That's a question about the viability of this program, not about competition with the SDC waiver that applies more broadly?
Queesha Light
I think it's a little bit of both, but I mean, I do hear you on that.
I think it's a little bit of both of those things.
So, I mean, but I think the balance here was we have people who have taken advantage of this program, and, and now it's like we can't— we're not able to sell because people don't have to go through all of these requirements.
Elana Pirtle-Guiney
So, but again, the Yes.
So you're saying that cost is not more under this program, it's just that the cost is now the same outside of this program to build.
Did we look at— if the, if the real challenge is not competition between programs because the cost is the same, it sounds like the real challenge is enough buyers.
Have we had more houses to sell than buyers in this program?
Josh Roper
Yeah, we're hearing about it more, certainly.
This concern about being able to sell the properties has come up more.
Whether or not that is a product of this particular friction, I can't say.
Elana Pirtle-Guiney
And did we consider a solution like— it looks like we're taking something out of the code that would raise it further.
From 100 to 120, so we're still helping people who struggle to buy our very expensive market-rate housing.
Did we consider a solution like that, or did we just jump to strike any support to make sure that folks who are earning around the average income have an opportunity for homeownership?
Josh Roper
There was some discussion about 120.
There was also discussion about, for example, after a property has been on the market for X days or X months, then it becomes eligible for this, again, reprieve.
But those are, again, kind of where you land on the balancing of these interests.
Elana Pirtle-Guiney
Yeah.
Understood.
And I think I would have concerns with the latter of those as well, because essentially then that doesn't allow the market to adjust to a rate that people who are earning 100% of median income can afford, right?
There's an incentive not to drop the price.
Um, I guess I, Chair, am struggling to see the connection between the problem that we're hearing and the solution at hand.
Um, I appreciate this coming forward.
I am sympathetic to the concerns that we have heard and I think there might be other ways to look at that, but a solution where we make it harder for folks who otherwise can't afford a home in our community to compete— because that's really what this is about.
Who are you competing with?
And are you getting outbid at every opportunity as 100% of median income homebuyer because somebody comes in who makes 50% more than you and can, can outbid you for that home.
Are we removing the cap so you can get outbid every time because the rules changed and developers want the more, um, profitable rules?
And I, I understand that and I am sympathetic to that, but I'm struggling with this being the solution.
Thank you.
For helping me make sure there wasn't anything I was missing.
I appreciate that.
Thank you, Chair.
Candace Avalos
Vice Chair Green.
Mitch Green
Thank you, Chair Avalos.
Yeah, I remember that this was a point of interest when we considered the STC waiver.
I had subsequently had conversations, I think it was actually with Mr. Justin Woods at Senator Confam had a I was on a roundtable for housing production, and this was a topic that came up.
So I've been expecting this to come back, and I'm glad that you guys have taken it up.
I guess I have a couple questions.
The first is, in the presentation, you know, I think the top line summary is that the legislation would temporarily remove the income requirement for this program for eligible families.
Yes.
So income requirement for homebuyers purchasing qualifying homes benefiting from the larger program.
So my understanding is the rest of the qualification requirements stay in place.
We're just taking away the income cap, income requirement?
Josh Roper
That's right.
Steve Novick
Yeah.
Mitch Green
Can you speak a little bit about what the rest of those programs do to sort of protect this?
So let me just get to the point.
What do I say to someone who is worried that this just becomes sort of a giveaway to like a speculator who would then just go out and buy this at any price, turn it into some sort of a rental, and end up moving us further away from the stated goals of the affordable housing program in general?
Because I understand that there's some first-time homebuyer requirements, there's some other aspects of it.
So can you speak more broadly about how, like, what this preserves in that program?
Because I don't think this just waives the program writ large and just creates a market program out of it.
Josh Roper
That's right.
It doesn't.
Mitch Green
And you can get back to me with that.
Josh Roper
Yeah, I'm debating.
I might do that because I want to be comprehensive and I might just give you a slice.
So I'll do that.
Mitch Green
And that's okay.
I wanted to make sure that I think it'll be important as we move from this committee to the council as a whole.
I guess the other piece, and I appreciate the discussion, it is a concern, but I think that needs to be weighed against the— there's a fabric of policy here.
There is a sort of landscape of policy at play.
And when we created a waiver, we did so in light of the Yes.
We created a bit of a rift in that fabric, and it's hard for me not to see the parallels between the sort of homeownership side of the affordable housing provider industry, so to speak, and also the kind of rental delivery side.
And if we've got— I think I saw the impact statement said something like 700 units that are unsold.
It's probably a subset of that because we're looking at a Yes.
That, you know, if we've got units that can't be sold because of this rip in the fabric, so to speak, then I worry that we are putting some balance sheet pressure on some developers who could then get busy doing the next project under other emerging conditions that, you know, we've got the residential infill program.
We've just adopted a MIRL, Middle Income Revolving Loan Program, that, you know, might provide a pathway for financing some of this, although I think that's largely for rental housing.
But I think the idea is we're moving towards a direction to lower the cost of production, basically.
And so I worry about tying up the balance sheets a little bit of some of these developers who cannot convert the investment into a receipt of cash and then move to the next one.
And I worry that if we don't don't solve this problem here under a temporary waiver as well, then we're adding that same— or we're sort of like continuing that imbalance that we're seeing, frankly, with the affordable housing rental stock, which is also close to market and also means that, you know, that's one reason why you have problems with lease-ups.
Obviously, there are other reasons, but these are sort of holistic dynamics that I'm And so I share some of the concern about maybe are we taking away a protection that a first-time homebuyer has to get access to this market.
But I also know that we've seen this segment of the market soften in price.
And as long as I know that there are some aspects of the program itself that do provide those guardrails, like you must be a first-time homebuyer, I think that's part of this program, if I'm not mistaken.
Thank you.
Then I think I can get very comfortable with just truing this piece up.
So I think that's an important piece of the conversation that's not in play.
And, you know, if it's appropriate, Chair, you know, we could ask the question of the practitioner in the audience, maybe to give your perspective on this from your experience, if you feel comfortable coming back up.
Justin Wood
Thank you.
A couple things I wanted to just point out.
I think your concerns are valid.
I think if we were in a an otherwise hot housing market, I think that's a totally fair assessment.
Unfortunately, we're not.
We're in a slow housing market right now.
And many of us who build houses using the SDC waiver program, we don't have big margins on our houses.
And I count on having the SDC waivers to be able to sell my homes.
If simply saying, well, just repay the $35,000 if you can't find a qualified buyer, that in a lot of cases means I lose money on the homes.
And so So if it's a choice of losing money or not selling the home, so a lot of times we sit on it.
And Councilor Green, you mentioned, unfortunately that means we have other homes in the project pipeline that we'd like to get built and add to the housing inventory stock that we can't.
So we're really just trying for, I mean, in my company, we're down to 7 homes right now that we have that are competing against other homes that we just can't move off our balance sheet because we're struggling.
And we, and I don't see in this market right now a situation where you're having Yes.
Buyers at or below 100% of MFI competing against those higher income buyers right now, just 'cause we're in a market where there is an oversaturation of product on the market and prices have declined.
And so I think that buyers who want to find homes and looking for home products have lots of options out there.
And because of the fact that they have lots of options right there, they're choosing— the buyer who makes less than 100% of MFI can go down the street and buy a home from somebody who doesn't have Thank you.
They have the same qualifications that I do.
They're not over— they're not paying more for their home than they are for my home, but they have more options there.
And in some respects, they're choosing to not buy my home because they have to pay $1,000 in fees to be able to apply for the program to buy it.
So why would they choose to do mine versus the guy next door who doesn't require it?
So if anything, this is kind of holding back the housing inventory, I think, somewhat for the few of us And I think I've heard the number 700, at least the handful of people that I know that utilize the program.
I feel like the number right now is we're probably only talking 200 to 300 on the market right now today that this will be impacted by.
But I know this has been a program that we've been big believers in, and I just want to see it be successful and continue for all of us to be able to use for years.
Mitch Green
Thank you for allowing that, Chair.
Just one quick follow-up.
You're obviously in the business of selling houses to people with an income restriction because that's your target, that's your market.
Do you provide any sort of services?
Do you help them through that process?
Do you have like a counterpart that helps them through financing, helps them through kind of that capability?
Justin Wood
Yeah, we have a couple different lenders that we work with that are really familiar, not just the STC waiver program, but more probably the HOLTI program, because a lot of lenders don't understand how that works.
So we have lenders and realtors that we're familiar with the programs that help us to do that, and we market those accordingly so that they know how to take advantage of those programs.
So, yeah, sorry, and I'll say the HOLTI program is not affected by this.
So the HOLTI program still has the income price cap.
And so a lot of the— there are a lot of homes out there that have— that are— that do offer HOLTI, and this will not be— those homes will not be affected by this because the HOLTI to qualify for that still has an income cap on it.
Mitch Green
So yeah, so that's important.
I worry that we lose that capability, which is an ancillary service provided to these homebuyers, if, you know, if we sort of get engulfed by the market segment, the sort of unrestricted market segment, because they don't bring that.
So that's my assumption.
And just, it was helpful to have that conversation.
And I think I've used up a lot of time, so I'm gonna go ahead and— To, to me, or—.
Candace Avalos
Oh yeah.
Tiffany Koyama Lane
I'm wondering, thank you, if it's okay, Chair, I'm wondering, Councilor Green, if your question was answered, because what I heard in your line of questioning and your thoughts is that if we, um, if we remove the income cap, we might— there might still be some other provisions around first-time homebuyer.
But I didn't hear an answer if that's the case.
And is that that we're not sure, or like these 7 homes, would you— are there Would it be now it's exactly the same as the other SDC waiver, or would you— does it make sense what I'm asking?
Mitch Green
It makes sense.
I don't— so I have some preliminary familiarity with this program, but I am not the expert.
And so—.
Tiffany Koyama Lane
Yeah, I'm wondering if your question was answered and I missed it, or if someone can answer it or get back to me.
Josh Roper
I think I deferred, but I got a confirmation.
So there is no first-time homebuyer requirement.
But it isn't an owner occupancy requirement.
So you wouldn't have a developer who then can just turn it into a rental.
Mitch Green
Same as like a VA underwriting, like you have to be the owner occupier.
You can't use it as a speculative rental property.
So I mean, that's one piece of my— that was one piece of my concerns that's now been settled here.
Candace Avalos
Thanks.
You're up next, Councilor Koyama Lane.
Tiffany Koyama Lane
I do want to say I understand some of the frustration and confusion, and I— the illustration of like you get in line and then other people get in line and the rules have changed, or I'm thinking like you buy a sweater and then you see it's on sale later.
That does seem very frustrating.
I am looking for some more specific data around— well, now I'm confused because there's 700 here, and then I'm hearing the number 200 to 300.
300.
I also have not heard the housing market described as slow.
I have heard it as maybe not hot, but still competitive.
This is not my complete area of expertise.
I am interested also in what can we do to also let people know about these homes that are people are trying to sell and, you know, like, let's let teachers know about these.
What data do we have specifically about how many units are on the market from the temporary SDC exemption program right now that are competing with this 200 to 700 homes from the AH SDC exemption program?
Do we have those numbers?
Josh Roper
So maybe I can address the 700 versus 200 to 300.
I'll just add one piece and then back into that question.
So the 700 was an estimate based on permitting.
So it's based on access to our permitting database.
So do you sort of fit into this, again, limbo that we've been calling it, which is different from the question of whether or not those units are active in the, you know, on the market, available for purchase right now.
Some of them may not be.
And some of those 700 units 700 are not going to be available for purchase.
May have gone on the market and sold and would be deducted from the 700.
Okay.
So it's totally plausible that you would have a smaller number on the market currently.
In terms of data that we have access to, though, we don't have a great— we don't have a way to— or I'm not aware of a way to do a close analysis of what is on the market.
Or Maybe we could, but we haven't, I should say, done a close analysis of what is on the market currently compared to basically the analysis that you're requesting.
We haven't done that.
Tiffany Koyama Lane
Yeah, I know I really love seeing data and would just— I would be interested in, and it would be really helpful for me to see that.
I mean, it is compelling to hear you're doing open houses, trying to sell a home, and then And, you know, next door there's another one that's easier to sell.
But I would like to see data in addition to the, like, I'm hearing from developers, or this is kind of just being said.
I'm not saying it's not true, but would like to know that we have some real data to back that up.
And I'm feeling this, like, I kind of would like some more information in general about a couple of these things.
And something I keep coming back to is when we do these incentives, like, what was the initial real intention or goal?
And when it was the AHSDC, it's a big part of that is to provide affordable housing, which we don't have a glut of in our city, right?
Like, we need more of that.
And then for the temporary SDC exemption, it was our mayor, our council really wants like a big boom and we want to show that Portland's ready to invest in.
So come develop.
Rebecca Dobert
Thank you.
Byron Balog
Right now.
Tiffany Koyama Lane
And so it seems like there were kind of some different points to or goals attached to those exemptions, even though there are maybe similar people doing both of those, both of the buildings.
And then the folks who, if there are developers who got the AH SDC exemption program, could those, any of those developers apply to do more housing under the temporary SDC exemption?
Josh Roper
They could.
Tiffany Koyama Lane
It would just have to be a different project.
Okay.
Thank you for clarifying.
Candace Avalos
I'm going to move to Councilor Novick if that's okay since he hasn't spoken yet.
And then I'll come back to you.
Steve Novick
Thank you, Madam Chair.
I just wanted to clarify the sales cap will still apply to these previously, to these properties, right?
So the properties will still be in the affordable range.
It's only the income requirement.
Josh Roper
That will change.
Steve Novick
Whereas the—.
Josh Roper
The sale price cap does continue to apply.
Rebecca Dobert
Yes.
Steve Novick
And I just want to go back to a point that Justin made is that, you know, right now if somebody below the income cap is looking for a house, they probably would— and some of— and any of the housing being built, you know, outside of this program but with the SDC waiver, is affordable to them, then they're likely to buy the house that where they don't have to— I mean, it's a pain in the neck to have to go through income verification.
So their preference would be to buy something where they don't have to go through that.
At least we can imagine that.
Josh Roper
Yeah, I mean, the administrative burden attached to any of these programs does add a little bit of extra friction.
We try to minimize it, but it does.
Steve Novick
It's kind of like if you had an option between 2 free health insurance programs, one is Medicaid where you have to prove your income, and one is another one that you don't have to prove your income, you would avoid Medicaid and go with the other one.
Queesha Light
Yeah, it's the same thing that we see in the rental market, right?
Is the challenges make it harder for, you know, when I've got to supply all of these documents and do all of this work, I'm going to— I, and I can pay the same price, why would I wait over here for 6 months before I can even do it?
So, okay.
Steve Novick
Thank you.
Candace Avalos
Councilor Pirtle-Guiney.
Elana Pirtle-Guiney
Thank you, Chair.
It sounds like you have the support here.
I just want to be clear, I'm very sympathetic to the challenges that the program is facing as the market changes, right?
And as the market softens, especially in this segment of the market, those spaces where there isn't always a huge difference in cost And there is a very tight margin for developers doesn't leave a lot of room for movement.
And I think that there is absolutely a space for the city to have a conversation about waiving that $1,000 fee.
I think there is absolutely a space for the city to have a conversation about raising the income cap to 120% where it sat previously.
I think there are a lot of things we could be doing to address the challenges.
Challenges that this program is facing based on where the market is at in those very tight margins for developers.
Um, I just don't think that making it even harder for folks who are making average income or less to enter homeownership is the right way for us to be addressing those challenges.
Thanks, Chair.
Candace Avalos
Thank you.
Put myself in the queue just to say, uh, I appreciate the discussion.
Like I said, my office had been working on this, and ultimately, um, I, I personally feel that this is the right solution to, um, a pipelining problem and a competitive problem.
I get the concerns, um, but I think that if we are creating this program that is adding this other barrier for how housing to get into the hands of folks and for us to keep that moving.
That is my concern and is why I think this is a solution to address that.
Is it a perfect solution?
No.
Um, but I don't think the SCC waiver was a perfect solution either.
So I've kind of— I kind of feel like my hands are tied because we already agreed to that.
Um, and now this is a hangup that, um, we have to resolve in order to keep projects moving.
And that's ultimately the whole point of the SCC exemption program, was to keep projects moving.
So I understand the concerns that my colleagues have raised.
I share them, but I do plan to support this today.
Thank you so much.
I don't see anyone else in the queue, so do I— let's see.
Now I got to get the language up.
I would like to entertain a motion to move ordinance document number 2026-205 to full council with a recommendation to pass.
Council President Dunphy
So moved.
Mitch Green
Second.
Candace Avalos
Okay, so moved by Councilor Novick and seconded by Vice Chair Green.
I see no further discussion, therefore please call the roll, Diego.
Diego
Pirtle-Guiney?
Elana Pirtle-Guiney
No.
Diego
Koyama Lane?
Tiffany Koyama Lane
No.
Diego
Novick?
Steve Novick
Aye.
Diego
Green?
Mitch Green
Aye.
Diego
Avalos?
Candace Avalos
Aye.
Diego
With 3 ayes and 2 nay votes, the motion carries and the ordinance document number 2026-1 Will move to the full council with the recommendation it be passed.
Candace Avalos
Thank you.
Thank you, Housing Bureau, for being here.
Colleagues, our next meeting is July 7th.
At that meeting, we will have a presentation on the North and Northeast Housing Strategy, and I will give you some more updates on other agenda items that we're still cooking.
And with that, I will adjourn the meeting of Housing and Permitting Committee at 4:43 PM.