City attorney says housing ordinance should be revised
The city attorney's office is recommending revisions to a "controversial" housing policy even though it contends current rules would probably withstand legal challenges.
In a memo to the city's Housing Committee, which is currently reviewing the eight-year-old housing replacement ordinance, assistant city attorney Ann Freeman recommends replacing the one-size-fits-all fee structure with a sliding scale.
She also suggests setting standards to guide whether an apartment that's been vacant for decades still falls within the ordinance. Failing to do so could leave the city vulnerable to legal challenges, she said.
"Requiring housing units which have not been part of the City's housing stock for many years, if not decades, could evaporate that required (legal basis)" for the policy, she said.
City councilors passed the ordinance in 2002 in an effort to protect the city's housing stock when apartment vacancy rates were near historic lows. The measure requires developers who remove units from the city's housing stock to replace them elsewhere in the city or pay nearly $58,000 into a housing fund for each unit that's not replaced.
A recent "lunch and learn" discussion hosted by the Greater Portland Community Chamber bore out a wide range of opinions on the policy, many of which were negative, observers recall.
Opponents also complained late last year when the city council appeared to interpret the ordinance two different ways for projects only weeks apart. In one case, a project transforming a vacant, seven-unit apartment building at 660 Congress Street was granted a waiver, allowing it to sidestep more than $400,000 in housing replacement fees.
At its very next meeting, the council barred the owner of a former laundromat on Washington Avenue from re-developing his lot because city records showed the building as having residential units several decades ago.
In her memo, Freeman calls those decisions "controversial applications" of the ordinance.
The Housing Committee began reviewing the ordinance last month with a public hearing at City Hall. The review continues today at the committee's 5 p.m. meeting in Room 209 at City Hall.
Committee Chair John Anton said this week that he expected Tuesday's meeting to bring fresh feedback for city staff trying to draft new revisions. Asked about the recommendations outlined in Freeman's memo, Anton said, "we would be wise to follow corporation counsel's suggestions."
Freeman, who cited several recent court cases in her analysis, finds that the ordinance would likely withstand a legal challenge, in part because it applies equally to all developers and meets a standard of "rough proportionality."
"An essential nexus exists between the city's legitimate governmental interest and the lawful exercise of power," Freeman wrote. She added, "The aim of the HRO is to preserve the housing stock in the City of Portland and it is within the city's police power to be concerned with preserving the housing stock."
She writes that such a connection could become blurred unless new standards are adopted concerning what housing units fall under the ordinance. "The 'nexus' between requiring dwelling units which have not been a part of the city's housing stock for a number of years, perhaps decades, to comply with the HRO and the stated purpose of the HRO is tenuous at best."
The memo goes on to say that "the HRO should establish when, in time, a dwelling unit must have existed as a dwelling unit for it to be subject to the ordinance."
Freeman suggests housing replacement fees "be tightened to more of a 'sliding scale' approach" which among other things would weigh the size of the project. "One option would be to calculate the fee based on a square foot analysis versus a set per unit price regardless of the size of the unit lost," she says.
Chris O'Neil, a chamber lobbyist who has been critical of the ordinance, said "navigable" zoning rules in are necessary to guide urban growth, but that "steering growth through zoning that looks like a curly straw will simply kill growth."
He added, "One question we'll need to ask of any remedy is: 'does this fix work or are we better off simply scrapping the whole experiment?'"
