UGH...Portland:  Valhalla Custom Homes and PBOT

UGH...Portland: Valhalla Custom Homes and PBOT

The City of Portland encourages innovative design and creative solutions in housing, especially on infill lots.  While every lot developer/builder in the City of Portland wipes tears of laughter from their eyes and attempts to regain control of their faculties, let’s consider the story of Valhalla Custom Homes.

Valhalla Custom Homes is a small, local builder in the Portland market owned by Gary, Chris, Jonathan and Mari Ives.  The Ives family builds two homes a year, using custom plans for each home they build.  Each house is unique and each house means something to the Ives.  Every new home they take on is a major investment for them.  They are the picture of the type of builder the City of Portland claims to support: thoughtful, creative and innovative.

Valhalla Custom Homes made an offer on a lot in NE Portland.  Like any responsible builder, they made their offer contingent on a due diligence period.  They then set up meetings with the Portland Development Services Center and the Portland Bureau of Transportation (PBOT).  During these meetings, Valhalla verifies zoning, allowable uses and confirms with PBOT that the minimum allowed driveway for a two-unit attached dwelling is 14 feet and on-street parking is 18 feet.  This has the bonus of solving any on-street parking issues the project will bump up against with PBOT.  With all details confirmed with the City, Valhalla buys the lot in April of 2017.

Unfortunately, for Valhalla, the rest of the story is sad and all too typical when dealing with PBOT. In May of 2017, PBOT issues an internal memorandum to PBOT staff radically changing the parking standards for on street/off street parking, changing required setbacks for garages from 18 feet to 24 feet and mandating that attached dwellings be designed with garages located immediately adjacent to one another.

Before we go on, consider what is being said here: PBOT internally changed the development code through a memorandum to their staff.  Wait, can they do that?  Isn’t there supposed to be a process for changing standards and requirements in the development process so that public comment can be made?  This is Portland!  Everyone is supposed to get a chance to be on the record before any change is made.  Apparently at PBOT code can be changed by fiat, without public input or a review period.

These changes were delivered to staff, but no notice was provided to the public or to builders.  Valhalla, blissfully unaware that their design plan was now dead in the water, proceeded to spend thousands of dollars on a housing design with garages that violate the new policy, a change that occurred AFTER their pre-application meeting and without any notice.

In November, the Portland Planning and Zoning Department approved the building design and location on the property.  So far so good.  Then in December, the Ives received notice that PBOT was denying the driveway design based on the internal policy change.  This came as quite a shock to the Ives given their meeting with PBOT.  When they pled their case to PBOT, there was no understanding, no explanation and certainly no offer to rectify the situation.  Just tough luck, your problem Valhalla, eat the loss and move on.

This decision leaves Valhalla with three choices:

  • Build as prescribed by PBOT’s questionably adopted rule and lose significant value, despite seeking assurance beforehand that their design would work;
  • Sue the City of Portland for unilaterally changing code without process;
  • Give up, sell the lot and do what many builders have before them: Stop buying lots in Portland and build in places where their contribution is valued.

Valhalla has a good case against the City, but the City has unlimited resources and Valhalla is at a distinct disadvantage financially.  Is it worth it to throw good money at a legal process that will likely only delay the project further and cost more resources?  The City knows that no one has the resources to hold them accountable and that’s why they can afford to skirt the law and smugly deny a small builder like Valhalla.

It will be up to Valhalla to decide what choice to make going forward, but the message sent by PBOT is the same message builders have been sent for years by the City:  The rules are the rules unless we (PBOT) change them without notice and impose them without process.  Tough luck.