Code Green

Builders in Portland may get a break from City Council. But landlords and single-family homeowners?

They won't be so lucky if the Council approves a plan Wednesday, May 27, to increase fees and fines on everything from plumbing inspections to building code violations as part of an effort to raise more money for the cash-strapped city bureau responsible for building safety.

So far, the increases haven't generated nearly as much scrutiny as the city's recent changes to water and sewer rates, which drove up Portlanders' bills by 17.9 percent and 5.95 percent, respectively.

But City Ombudsman Michael Mills, whose job it is to take Portlanders' complaints and help resolve them with city officials, says far more attention should be paid to the proposal, given its high potential for unintended consequences.

The Bureau of Development Services, the department seeking the fee and fine increases, has a tricky task ahead. Its job is to make new homes and offices safe by requiring building contractors to obtain the proper permits. And it must address code violations that come to its attention in older construction projects. This part is sometimes harder to balance.

To address violations, the bureau imposes fines on property owners who get caught. The idea is to encourage violators to fix whatever problems they have before the fines get bigger—or the city slaps a lien on their property. But the fines must be low enough that the property owner can afford to pay the fine and make the needed improvements.

Under the proposal being considered this week before Council, code violations in single-family homes would result in fines of $200 per month, instead of $95. The higher fines could quickly snowball into financial burdens on homeowners, yet it's unclear if they would make people any safer, Mills says.

"These punitive penalties will provide incentive for some property owners yet cause others to give up on compliance entirely," Mills wrote in a May 11 letter to City Council. "There will likely be more properties subjected to liens and more lien reduction review requests. There is the potential for increased inequalities due to higher penalties, and the uncertainty of lien reduction reviews in a climate of increasing demands for revenue."

The Bureau of Development Services, which is supervised by City Commissioner Randy Leonard, depends largely on fines and fees it collects rather than the city's general fund to pay for its programs. Ninety-four percent of its budget comes from fines and fees.

The bureau has already cut back on staff by not filling job vacancies to avert layoffs later.

Meanwhile, the current construction slowdown in Portland has savaged the bureau's budget. Permit applications are down by almost 20 percent since last year, and since July the bureau has spent $5.8 million of its $14 million in reserves, a pot of money city officials set aside for just such economic downturn.

The fee and fine increases are expected to generate $1 million the first year, but developers won't share in the costs. Not immediately, anyway.

Structural-permit fees are not going up because of a four-year-old commitment to the construction industry not to do so yet.

Bureau director Paul Scarlett says the increases are not intended to recover the full $5.8 million shortfall, but to keep pace with increased expenses.

"In no way are they aimed at making up that gap," he told city commissioners during a May 21 public hearing on the proposal. He also disagrees with Mills, saying higher fines will create more incentive for violators to gain compliance. "We feel our fees are justified," he says.

As part of the same fee-increase proposal, the noise permit for outdoor puppet shows in Portland would also go up, from $58 to $61.

WWeek 2015