Audit finds flawed permit system could hamper Portland’s COVID-19 recovery

By Rebecca Ellis (OPB)
March 23, 2021 8:40 p.m.

A review released Tuesday found a deeply-fragmented system with permitting responsibilities dispersed between seven bureaus and five council members

As Portland looks to reopen, an audit released Tuesday points to a new issue that could hamper the city’s post-pandemic recovery: a slow-moving and inequitable building permit system.

The audit found projects in need of permit approval are routinely hit with longer-than-expected wait times. According to the audit, the city has not reached its timeliness goals for initial review once in the last five years. In 2019, the city provided an on-time review for 27% of new commercial construction projects. For new residential projects, that figure was 7%.


Developers have argued that a well-functioning permitting system is essential to help the city’s economy bounce back after the pandemic. An annual ranking of real estate trends in January found the city’s reputation as a destination to invest had plummeted from third place in 2017 to 66th this year. Business groups at the time implored the city to avoid laying off permitting staff, which they argued would hamstring the city as it tried to rebuild.

But auditors warn, even with the current staffing levels, the slow-moving permitting system could hurt the city’s recovery.

“Delays may also damage Portland’s reputation and reflect poorly on its ability to provide an essential government service,” the audit states. “Developers may opt to build elsewhere, resulting in an economic loss for Portland.”

Portlanders faced with slow response times from the city generally direct their ire towards the bureau of development services, which is responsible for the bulk of city permitting.


But auditors say the system — and its problems — extend far beyond the one department. Seven city bureaus are responsible for permitting duties, along with all five members of the City Council, each of whom currently leads at least one of these bureaus. Auditors say this leaves the permitting system fractured and decentralized with no one bureau director or commissioner feeling empowered to overhaul the system.

“Many of City Council’s goals will be harder to solve unless it acts as a legislative body to evaluate the regulatory environment and as commissioners-in-charge to hold their bureaus accountable for necessary changes,” said City Auditor Mary Hull Caballero in a statement.

It’s no secret Portlanders are discontent with the permitting status quo. In 2018, the city surveyed customers and found half were dissatisfied with the process. But when customers voiced their concerns, auditors found city officials often failed to resolve the complaints — or report them.

City policy requires the director of the development services bureau to provide an annual report on how the bureau resolved complaints. According to the audit, these mandated reports aren’t being conducted.

But some well-off customers found a workaround. After reviewing correspondence between council members and permit applicants, the auditor determined those “with resources and connections” had an easier time pushing their projects through the often dysfunctional system. At least twice, the city tapped a project for improved service after applicants wrote to elected officials.

“The interventions, routed through elected officials, occupy a gray area between customer service and favoritism,” the audit stated.

The auditor made two recommendations to smooth out the process. They suggested the Bureau of Development Services coordinate with the other bureaus to respond to complaints and streamline permitting. Secondly, auditors recommended the elected official in charge of the bureau, currently Commissioner Dan Ryan, acts as the point-person for permitting and champion improvement projects.

In a joint-memo response to the audit, Ryan and Bureau of Development Services Director Rebecca Esau pointed to several initiatives already underway to speed up response time, including an upgrade to the permitting software and the creation of a new “Permitting Task Force.”

“The timing and success of this work is critical as Portland’s ability to deliver timely, well-coordinated permitting services will either support or hinder Portland’s economic recovery in the coming months,” the memo stated.