Portland Permitting and Development warns deep staffing cuts in mayor’s budget would slow permitting, inspections

Portland Permitting and Development told the Homelessness and Housing Committee on May 13 that the mayor’s proposed budget would sharply reduce bureau staffing, extend permit review timelines and eliminate several programs if enacted.

David Koonhausen, interim director of PPD, said the bureau faces a projected $14 million funding gap driven by a prolonged decline in permit valuation and that PPD has drawn reserves to maintain services. He said PPD’s fee structure ties nearly all ongoing funding to project valuation — “98% of PPD’s ongoing funding comes from fees and charges for services with only 2% coming from the general fund,” Koonhausen said — and that shifts to lower-valuation, higher-volume work have reduced revenue while keeping workload steady.

Koonhausen said the mayor’s proposed budget includes reductions that would eliminate 12 vacant FTE and 53 filled positions (a portion to be achieved through attrition and retirement), a level of cuts that would mean a roughly 51% reduction in core bureau staffing compared with 2019 if fully implemented. He warned the reductions would increase plan-review and inspection timelines, reduce the number of inspectors (the inspections division receives roughly 400–500 requests daily), and could make some programs infeasible.

The presentation listed specific programs at risk: the Empowered Communities program (which offers pro bono technical and volunteer construction assistance to low-income homeowners and tenants), the environmental soils program (on-site sewage and septic inspections performed under intergovernmental agreements with Oregon DEQ and Multnomah County), licensing functions, noise response, and support for the building codes appeals process. Koonhausen said eliminating the environmental soils program would end the city’s IGA-administered service and require counties and DEQ to assume or contract for the work; staff noted many inspections occur in vulnerable communities.

Koonhausen told the committee that the bureau previously drew reserves and implemented large layoffs after the 2008 downturn and again in 2024 (about 74 FTE, approximately 19% of the bureau), and that reinstating staff would take years. He also said the bureau’s financial forecasts are reviewed by a Financial Advisory Committee made up of local economists and industry experts and that projections currently assume at least 18–24 months before development picks up.

Committee members pressed for options and trade-offs. Chair Avalos asked whether staff could provide staggered scenarios showing what services could be preserved with supplemental funding of $5 million, $7 million or $10 million; Koonhausen agreed to provide that analysis. Councilors also asked about automation and whether certain non–life-safety requirements could be temporarily suspended to preserve core inspections and plan-review capacity; bureau staff said the permit improvement team has implemented conditional logic for single-family submissions and that additional technology efforts are planned.

Koonhausen said the mayor’s proposed budget includes one-time general fund money to move three permit-improvement positions into PPD for a year (about $425,000) and that a fourth position would be funded through a federal housing grant and housed at the Portland Housing Bureau.

Committee members voiced concern about the impact of cuts on housing production, public safety and neighborhood livability. Several asked staff to produce analyses that link incremental funding to preserved services and to clarify which statutory or intergovernmental obligations would constrain cuts.

The presentation and the committee’s questions will be used as the council’s offices develop budget amendments and decisions ahead of full council review.