Editor’s Note: A previous version of this article referred to the Portland Bureau of Development Services as another entity. It has been updated to reflect the correct bureau.
PORTLAND, Ore. (KOIN) – As Portland’s Bureau of Development Services burns through its reserves, 15% of its staff will be laid off before the new year begins.
Nearly all of BDS’ revenues come from commercial and residential permitting fees, but permit applications – especially for commercial projects – have hit a steep decline over the past few years.
Commercial permit valuations previously hit a high in 2018, reaching $2.3 billion. In 2023, valuations are just above $1.5 billion – the lowest point since 2014.
The last fiscal year ended in July. During this time, BDS drew about a million dollars per month from its reserves. In the last three months, the bureau has spent $3 million per month. At that rate, the reserves would have been gone in about a year.
BDS has already laid off 16 contracted, temporary or probationary employees. The week after Thanksgiving, 56 full-time employees will be terminated in all levels of the departments for both union and non-union workers.
The bureau says the cuts are essential and will not impact the permitting reform process it is currently in the process of undertaking with other bureaus. Just earlier this year, Portland City Council passed a resolution to combine the process from different bureaus, hoping for a more streamlined process.
“The permitting unification process approved by City Council is still moving forward. We’re committed to making that process a success,” BDS spokesperson Ken Ray said. “We have seen a decreased workload at the Bureau of Development Services, which has contributed to our reduced revenues.”
Commissioner Carmen Rubio, who oversees the bureau, said BDS has been working with other bureaus to reform its permitting process. Developers say this could take years.
“We are doing everything we can to minimize any kind of external service impacts that we can,” Rubio said.
According to Ray, the city’s population decline and higher interest rates have led to the downturn. Another major factor is lenders being more strict with loans for new commercial projects since the pandemic.
“Because of some of the reduced values of commercial real estate over the last few years, they’re finding it cheaper to buy existing buildings than to buy new ones,” Ray said, adding that the downturn could last as long as 18 months.