- Apr 16, 2023
- 726
- 128
Although labor funds for many agencies are allocated through annual budgets (e.g., my federal agency), and don't generally change much year-to-year, there are also agencies whose funding comes primarily from fees charged for the services they provide. This fact is illustrated by recent news from the Portland Bureau of Development Services, which had to lay off several employees (with more expected) because of a recent decrease in permit revenues associated with declining building activity in the city. I was somewhat surprised to learn that 98% percent of the bureau’s budget comes from fees charged to developers for permits, which (unsurprisingly) makes the agency's financial wherewithal highly sensitive to development trends.
Portland's dip in building activity and the bureau's resulting financial woes can't be unique to Portland right now. I'm sure that the root cause of the issue - higher interest rates on construction loans - must be affecting building activity and therefore permit revenues nationwide. I'm wondering how representative Portland is in terms of declining building activity translating to a reduced labor budget - is it really typical for 98% of a permit office's budget to come from fees (maybe a question for @W3 Planning and Research?)? If Portland is representative of other building/planning departments, then it seems like we should also expect to see declining budgets - and customer service - at other offices across the county, especially if interest rates continue to rise.
Portland's dip in building activity and the bureau's resulting financial woes can't be unique to Portland right now. I'm sure that the root cause of the issue - higher interest rates on construction loans - must be affecting building activity and therefore permit revenues nationwide. I'm wondering how representative Portland is in terms of declining building activity translating to a reduced labor budget - is it really typical for 98% of a permit office's budget to come from fees (maybe a question for @W3 Planning and Research?)? If Portland is representative of other building/planning departments, then it seems like we should also expect to see declining budgets - and customer service - at other offices across the county, especially if interest rates continue to rise.
- Location
- Portland, Oregon, United States