A Portland ordinance intended to minimize the spread of hazardous materials during residential building demolitions has been largely effective, according to a new city report analyzing the first 18 months of implementation.

Portland City Council in 2018 adopted updates to the building demolition code as a means to protect neighbors of structures undergoing demolition. Prior to passage of the residential demolition ordinance, the city had no regulations in place for containment of materials such as asbestos and lead-based paint. The Oregon Department of Environmental Quality was responsible for enforcing asbestos abatement rules, but lacked the resources to do so.

Stakeholders including contractors, the city’s Development Review Advisory Committee, neighborhood representatives, state agencies and city staff convened over the course of six months to craft the ordinance, which gained approval in February 2018 and took effect in July 2018.

The ordinance applies to residential buildings with up to four units, and includes garages and other accessory structures. Among its provisions are requirements that plastic sheeting be placed around demolition sites and in waste bins to prevent soil contamination and runoff, removal of exterior surfaces by hand rather than with mechanical equipment, use of water spray to contain dust and debris, and prohibition of mechanical demolition when wind speeds exceed 25 miles per hour.

In addition, the ordinance requires the Bureau of Development Services to expand the geographic reach of mailed and door-hung demolition notices, makes demolition permits susceptible to BDS staff review, requires contractors to submit demolition plans and materials surveys prior to starting work, and mandates three inspections over the course of a demolition – one each before, during and after the project. An interim administrative rule adopted earlier this month updated the policy to require two inspections during the demolition process.

From implementation in 2018 through the end of last year, the city accepted about 550 demolition permit applications that were subject to the new rules and took 47 enforcement actions for violations of the ordinance. After an initial correction notice, penalties for noncompliance start at $5,000 for the first offense, $10,000 for the second, and $15,000 each for subsequent violations. Through Dec. 31, 2019, the city issued 42 correction notices, two stop work orders and three first offense citations.

According to a BDS report presented to Portland City Council this week, the ordinance – the strongest of its kind nationwide, as stated in the report – has resulted in a reduction in both off-site demolition impacts and complaints to the bureau about dust from mechanical demolition activities.

City staff and stakeholders have identified several areas for improvement in the code, and are drafting updates to the rules, including requiring those performing demolition work to have lead-based paint certifications (regardless of whether that person is a contractor), and removing a requirement that somebody with certified asbestos accreditation be on-site during mechanical demolition. Revisions to the ordinance are being finalized by BDS staff and are slated for presentation to City Council next month.

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A unique ordinance requiring deconstruction of older houses in the city of Portland is likely to soon become more expansive.

The city in 2016 became the first in North America to enact legislation disallowing mechanical demolition of homes of a certain vintage. The Deconstruction of Buildings Law requires builders seeking a demolition permit for houses and duplexes built before 1917, or those designated as historic resources, to disassemble the structure using a licensed deconstruction contractor.

An amendment to the ordinance would broaden the law to encompass homes built in 1940 or earlier.

Currently, approximately one-third of all demolition permits are subject to deconstruction regulations. Officials anticipate that expanding the date threshold will double the number of home deconstructions performed annually in the city.

The ordinance was enacted with the stated purposes of maximizing the salvage of reusable building materials, lowering the amount of demolition waste in landfills, reducing carbon emissions from mechanical demolition equipment, and minimizing emissions of hazardous materials including asbestos and lead.

Expanding the law, Portland Mayor Ted Wheeler said during a City Council meeting on Wednesday, is in keeping with the city’s sustainability goals.

“Deconstruction nourishes our continuing initiative to build a circular economy, where we move away from a linear model of using something once and then throwing it out and having it go to the landfill, instead finding ways to creatively reuse materials,” he said.

The ordinance was phased in with incentives beginning in 2015, when the city provided owners with grant funding to help offset the cost of deconstruction. More than 200 houses in the city have since been dismantled, with 2.4 million pounds of materials salvaged for reuse instead of being burned or sent to a landfill.

Following Portland’s lead, cities including Milwaukee, Minneapolis, San Antonio and Vancouver, British Columbia, have either enacted similar ordinances modeled on Portland’s approach or installed grant programs and other incentives for deconstruction.

The change to the date threshold to 1941 was originally set forth in as a goal of the 2016 ordinance. Three years in, according to Bureau of Planning and Sustainability construction waste specialist Shawn Wood, the city’s infrastructure for supporting deconstruction has grown. There are now 12 city-licensed deconstruction contractors, along with three more in training. Also, at least two new salvage retail operations have opened.

“Because of the increased competition and innovation, the cost to deconstruct has come down over the past three years,” Wood testified before City Council. “During that same time period the cost to mechanically demolish has gone up.”

In 2016, Wood said, deconstruction costs were about $8,000 higher than those of mechanical demolition. Today, due in part to shrinking markets for wood as industrial fuel as well as new site and dust control requirements implemented by the Bureau of Development Services, the city estimates that deconstruction costs have dropped to anywhere from $3,000 higher than demolition to equal in cost.

Those figures are disputed by the Home Builders Association of Metropolitan Portland, which opposes expanding the date threshold.

“We believe that the cost (of deconstruction) is significantly more expensive, and that cost hasn’t been appropriately represented by city staff,” said Ezra Hammer, HBA’s director of policy and government relations.

The city is miscalculating the true cost of deconstruction, according to Hammer. The city’s figures fail to take into account the carrying costs associated with a longer deconstruction timeline – up to 21 days longer than mechanical demolition, he said. With carrying costs of a standard lot in the city of Portland around $7,000, and a higher contractor fee for deconstruction, Hammer estimates the process to cost around $10,000 more than demolition.

Those costs, Hammer said, will be passed on to buyers and renters and exacerbate the city’s ongoing housing affordability crisis. Further, city staff is not supporting an exemption sought by the HBA that would allow demolition in cases where houses would be replaced by affordable projects. The city’s lack of support for the exemption will mean more public subsidies are needed to ensure affordable housing gets built, Hammer said.

“In many regards, the city speaks in a consistent voice with its desire to support affordable housing,” he said. “Unfortunately, it’s not doing that here, and we feel that its failure to do so is a disconnect from its overall policy of advancing and supporting affordable housing.”

Applications for demolition permits have declined steadily since 2016, when 121 were received for pre-1916 houses. That number is projected to be 58 for 2019, along with 58 more anticipated for structures erected between 1917 and 1940. The proposed change of the date threshold would thus increase the total number of deconstructions to around 2016 levels.

According to Wood, it is an ideal time to increase the threshold. The businesses that have started in response to the deconstruction ordinance have expanded their capabilities with investments in staff, equipment and retail space, and are primed to take on more work. Doubling the number of permits presents little risk of overwhelming the city’s deconstruction infrastructure, he said.

“The industry has a firm footing, and has adapted in ways we couldn’t have imagined,” he said. “I have no reason to believe that won’t be the case going forward as the landscape changes.”

The ordinance proposal will receive a second reading before City Council next week and appears to have universal support. During a straw poll, Wheeler and commissioners Chloe Eudaly, Amanda Fritz and Nick Fish indicated they would vote yes. Commissioner Jo Ann Hardesty took exception with what she argued would be insufficient fines for violations, which Fish suggested could easily be updated by the city’s Development Review Advisory Committee.

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Rebecca Esau took over as director of the Portland Bureau of Development Services in April, succeeding Paul Scarlett.

Esau had spent the previous 14 years as manager of the bureau’s Land Use Services Division, where city planners, architects and landscape architects are responsible for administering the city’s zoning code.

Initially named interim director by Commissioner Chloe Eudaly, Esau was appointed permanent director in October. Eudaly opted against a national search, saying the best candidate was already on the job.

Esau was raised in central California in a family of farmers, and later studied landscape architecture at California Polytechnic State University in San Luis Obispo. She joined what was then the Bureau of Planning in 1996 as an entry-level planner.

Esau comes to leadership at a critical time for BDS, which has faced criticism for processing building permits too slowly. In recent years, the bureau has been plagued by low staff morale. Staffing levels have surged and receded at the bureau along with the economy, and the slowdown in new multifamily developments could cut the bureau’s revenue.

The 91��Ƶ spoke with Esau at BDS’ office in south downtown. The interview has been edited for clarity and condensed.

91��Ƶ: I wanted to ask about permit times. What permit times are you seeing for design review, and how long is it taking for projects to go through, and how can that be improved?

Rebecca Esau: It’s taking too long in many cases. It’s largely dependent on how well-prepared the applicant is, and the quality of the submittal we get. For a well-prepared applicant, it can go really quite fast.

So for permits for new houses, they range anywhere from 1.5 months to – we had another one that took 12 months, but it was the applicant who was inactive in dealing with it for seven of those months. It’s a very iterative sort of process, working with the applicant back and forth to get the information that’s needed to be able to approve the plans.

For commercial permits, the span from the quickest to the longest is much broader: seven to 12 months for most projects.

91��Ƶ: Commissioner Eudaly and Mayor Wheeler have discussed a project to get all of the permitting agencies working together. Is there any progress on that?

Esau: Since taking this position, I’ve started meeting with the development directors group; (that) is what I’m calling it. Prior to this, they had not met regularly. So those directors are from PBOT, BDS, Water, Parks and Fire. Those are the key ones that have staff who are involved in the permitting process.

So we’re at the beginning stages of starting those meetings and developing our work plan. We’ve heard from the Development Review Advisory Committee (DRAC) – they obviously want things faster. They want when we raise our fees, for example, or another bureau raises its fees, for City Council to look at those holistically so you can take a look at what’s the cumulative effect of fees and SDC charges on a development and it penciling out at all, rather than taking them in silos, which is what’s gone on in the past. So that’ll be one of the projects I’ll be working with the directors on is putting a combined package together for City Council when any of us want to increase fees so that it’s presented together and the cumulative impacts of those fees are explained to City Council so it’s not death by a thousand cuts for the developers.

91��Ƶ: I’m sure you hear this a lot, but with construction costs as high as they are now, time is money.

Esau: Absolutely, and we’re not at all at this point able to deliver the services as quickly as we’d like to. We have a lot of vacancies. And I’m working with those directors also on getting the sufficient staff they need to deal with the workload and deliver the services in a more timely way.

91��Ƶ: How are staffing levels at BDS now? Do you continue to be understaffed?

Esau: We have about 50 vacancies currently. It’s incredibly difficult in this economy to find candidates for these jobs we have that are so technical. We’re in competition with surrounding cities and one of the union contracts has just been negotiated. We have a tentative agreement now. Part of the problem has been we have not been able to offer competitive wages compared to some of the surrounding cities for things like building examiners and plans inspectors. So it’s difficult to attract, much less retain, qualified people to do the work – especially when everyone else is busy as we are. Maybe on a smaller scale in surrounding cities, but everybody’s busy.

91��Ƶ: It’s been my impression that when the economy is good and when people are building, BDS tends to need to staff up, and that when the economy’s slower, there can be layoffs. Is that a challenge to let employees go and then rehire when things heat up?

Esau: It’s incredibly inefficient to be in that cycle and to lay employees off – trained, skilled employees – during a downturn. I went through the last downturn, where we lost half of our bureau. Some people you can get back when it picks back up again; other people, they leave town, they move onto other jobs, other careers, and you never get them back.

To groom new people and get them trained is labor-intensive. It takes a long time. You hire a new employee here, whether it’s a city planner or plans examiner or an inspector, it takes nine months to a year to get up to speed. It’s a long learning curve.

So our bureau is tightly connected to the economy and what’s going on. That’s why it’s important that we have reserves set aside to help us survive those downturns and not lose staff.

91��Ƶ: So are you trying to set some revenue aside as reserves?

Esau: Yes, we do set revenue aside and we’re closely watching the economy. We’re just starting our budget planning process for this next fiscal year, and so we work with a team of economists that we bring in. We had our first meeting (in late November). We’re tapping their expertise as to what’s on the horizon and how long this busy building season is going to be. It’s looking like a year and a half, two years. Although we’ve also met with some of our larger industry customers. We’ve met with OHSU, TriMet, the Port of Portland – all of which have huge, multimillion-dollar projects coming in the next five years. So we need to be able to handle those and to be able to deliver the service to them.

In the last downturn, even though some of the private projects dropped off, there were a lot of institutions that continued on and kept going through the recession. So it’s a question of what will drop off first, and what will continue through the next recession and how deep will the recession be and how long it will last.

91��Ƶ: Inclusionary housing has been a huge topic among developers. It seems like since that passed there has been a big slowdown in large multifamily applications coming in. What impact are you seeing?

Esau: We’re having a few projects come in. We knew that there would be a drop-off right after Feb. 1 when it went into effect. And there has been a drop-off. A lot of people rushed the dates, got their projects in and got them vested under the old code so they didn’t have to comply with the new requirements.

So those projects are in the pipeline working their way through the system. But we have had some projects, a couple of them were in under the old code that decided to abandon their vesting and apply under the new code because they wanted the trade-off of not having to provide parking. Because the code allows if you’re within a certain distance from a transit corridor then you don’t have to provide parking under the new code. So they wanted to take advantage of that, and go ahead and provide that required affordable housing. That was worth it to them.

There’s been six or seven projects that have come in since the code changed. I continue to hear that we’re just not going to see, that we’ve gone over the cliff and we’re not going to see more apartment mixed-use development. As a result of that, the Bureau of Planning and Sustainability, who wrote the code that we’re administering, are paying close attention to that. They’re giving it some time to see if it plays out, what everybody is predicting. But we continue to hear that the faucet has turned off.

91��Ƶ: You work under Commissioner Eudaly and Mayor Wheeler. What have they told you about what they would like to see out of BDS?

Esau: Where to begin? POPS, our technology project, is a huge priority. That’s probably no. 1. It needs to be delivered on time and on budget, and it needs to work. So I’m working with the project manager on that. The POPS (Portland Online Permitting System) project is not just an upgrade to our computer permitting system. It’s a transition from paper plans to digital.

There’s a lot of changes. It will be easier for our larger commercial-permit customers who already have electronic plans, compared to somebody who wants to do a 200-square-foot kitchen addition and has drawn it on a napkin.

So we have to set up a system that accommodates all ranges of customers and their resources and their ability to provide digital plans.

It is horribly inefficient to work with paper plans. I wish that we would have done it years ago. But we’re doing it now.

Other priorities: Obviously, the housing crisis that we’re in. That’s a huge concern, as well as affordable housing. We have been working with the Portland Housing Bureau to do expedited reviews and working closely with them to do early assistance to make sure those projects go through quickly and seamlessly. That’s been going well.

But, yeah, I have concerns about the inclusionary housing situation and what that does to the supply and what that does ultimately to affordability.

Equity is a big priority and serving all members of the community. So we’re going to be developing a new program to work with small businesses and provide a liaison to them. Say you want to open a coffee shop that was a record store before and maybe you don’t know what you’re doing as far as permitting. For the people who don’t and need some help, we’d like to have a single point of contact to help walk them through the process so it goes quickly and easily and provides the resources they need to get through the permitting process. It’s a complicated and intimidating process to a lot of people. We don’t want people to be so intimidated and reluctant to apply that they go do work without permit, and things are unsafe or just not built properly. We want things to be safe.

91��Ƶ: I’m sure in your 14 years you worked under a number of directors. What did you learn from your predecessors, and how do you approach your leadership style?

Esau: When the planners first came over to what was the Bureau of Buildings, Margaret Mahoney was the director. As far as I know, she was the first female director of the city’s building bureau. It’s very much a man’s world. She, for me, is a role model as to how to navigate in this environment. We’re dealing with contractors, developers, people in the trades – and there are some preconceived notions about women oftentimes, even in 2017. So it exists today and I encounter (it). My female employees encounter it. So that’s an issue in trying to break that down. We’ve done a lot of gender-equity training at the bureau as well as equity training to raise awareness and change the culture.

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There are lots of new faces these days at Portland’s Bureau of Development Services. Steady population growth has led to heavy demand for housing projects and a double-digit increase in permit activity. Revenues have allowed the agency responsible for processing development applications and issuing building permits to add more than a hundred new positions.

There are so many new employees at BDS the city is renting several stories at the CH2M Hill Center to accommodate them.

This has been difficult for everyone to handle, according to industry professionals.

“There’s definitely a changing game for everybody to react to,” said Jennifer Marsicek, an architect with Scott | Edwards Architecture and a member of the city’s Development Review Advisory Committee (DRAC). “We’ve been talking office-wide about what we can do to improve our process and make it smoother, based on the kind of review comments we’ve been getting back and how we can address them next time around.”

Today, one in four BDS employees is in a position created in the past 12 months. Twenty-four positions focusing on land use, permitting and inspection were approved last month in supplemental budgeting to help address the current workload.

BDS now has 407 permanent full-time positions, but it has struggled to fill them; currently, only 338 are filled. Plus, the bureau needs about nine months to fully train a new employee because of the complexity of development regulations and the city’s computer system, according to BDS spokesman Ross Caron.

“In times when construction activity is so busy, we’re competing with the private sector to find qualified candidates,” he said, “so it’s challenging to find employees to fill positions such as plans examiners and inspectors.”

Also, Chloe Eudaly, a reform-minded city commissioner elected in November 2016, last month abruptly dismissed longtime BDS director Paul Scarlett. A nationwide search is under way to find a replacement for Scarlett, but for now, senior planner Rebecca Esau is serving as interim director.

In a manner of weeks Esau has restored some faith in the bureau, according to a phone poll of industry professionals. She’s already begun convening weekly meetings with the directors of the bureaus that participate in the review process – i.e., the Bureau of Transportation, the Water Bureau, the Bureau of Environmental Services, Portland Fire & Rescue and Portland Parks & Recreation’s urban forestry division.

Inter-bureau coordination has long been an issue for the city of Portland. Because each permit application requires multiple bureaus’ stamp of approval, such coordination will be critical in reform of the permitting process. Oftentimes what happens now is different aspects of a permit application proceed slower or faster than others.

“BDS is only part of the development review process,” Caron said. “Service delivery is only as fast as the slowest review group.”

The computer system the city uses for permit tracking is out-of-date. BDS is performing an upgrade to a newer version of the TRACS program; completion is expected by the end of the year. A larger, trickier effort is the one to transition to fully electronic plan review. That project, now called the Portland Online Permitting System (POPS), floundered under Scarlett, running millions of dollars over budget and years past scheduled delivery. Following a recent “reset” by the City Council, officials are evaluating the results of a pilot project, Caron said.

Despite plans for future success, at present, city performance measures are missed consistently. For example, the city’s TRACS website, which displays expected turnaround times for given projects, frequently displays times double or even triple recommended averages. And zero “turnaround time” targets for plan review were hit in the previous fiscal year. Turnaround time goals were met for only 56 percent of commercial projects, and only 70 percent of residential projects, across all bureaus in the fiscal year.

Caron notes that more than half of all permits awarded by the city in the past year were issued the same day, over the counter.

However, project owners prefer as much certainty as they can get, and designers often fret over how to help them plan without knowing when they’ll get their permits.

Portland’s population grew 1.9 percent from May 2015 to May 2016. Correspondingly, BDS’ workload related to permitting, land use and inspections has increased steadily over the last few years.

From April 2014 to April 2017, the number of permit applications received by BDS increased by 26 percent and the number of permits issued by BDS increased nearly 25 percent. Also during that span, inspections for residential projects increased 16 percent, and inspections for commercial projects increased 11.4 percent.

Additionally, during this time the value of work increased by 34 percent, from $1.75 billion to $2.37 billion. This jump shows that work passing through the bureau is becoming more complex, according to Caron.

In permitting, government staffing levels tend to follow development, because staff costs often come directly from permit fees. This means that when development activity in Portland drops, BDS staff reductions are inevitable. But some DRAC members want the city to rethink how it funds these positions, to help ensure institutional memory is preserved and employee retention is improved.

Some DRAC members support cross-training employees, so that when development slows, they can be relocated where needed, rather than laid off. This is more complicated under Portland’s unique weak-mayor form of government because elected commissioners often are protective of the staff members under their supervision.

Delays in the process add up, said Paul Grove, a spokesman for the Home Builders Association of Metropolitan Portland. And in development, of course, time is money. Members of the home builders association regularly note unnecessary delays.

Timeliness was a major issue during Scarlett’s tenure, Grove said.

“We recognize that they face challenges, and certainly on the staffing front,” he said. “But we’ve been encouraged by what we’ve seen (lately).”

Scarlett’s tenure was marked by regular reports of low morale among employees as well as several scandals, including failure to catch a highly-noticeable design change to the Yard project at the Burnside bridgehead.

“I think everybody’s now on board to make some changes,” DRAC member Maryhelen Kincaid said. “Because right now the permitting process is complicated. Maybe making it less so would expedite permits.”

Suburban cities like Hillsboro and Beaverton, which are also experiencing substantial and steady growth, are competing with Portland for skilled land-use professionals. These cities often pay more and offer generous benefit packages.

The Gresham City Council has supported adding permitting professionals, and prioritizing an effort to streamline its permit process. By making the permitting process as stress-free as possible, leaders in Gresham hope to lure more developers, said Rick Gruen, director of economic development.

“Anything we can do to make the process more pleasant for developers, we’re trying to do,” he said.

Meanwhile, Kincaid offered hints as to who she’d like to see in Portland’s BDS director position.

“I think there’s talent in the city to fill the position; I don’t think you need to start completely over,” she said. “But it would be a horrible job. I would never want it.”

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