City Drinking from the House of Humility (and Embarrassment) over URM Policy. City Loses Big… Now Starting Over.

Exterior Truss
courtesy Wikipedia

When U.S. Magistrate Judge John Acosta presented his over 40 page opinion last May on the City of Portland’s Unreinforced Masonry (URM) ordinance passed in the fall of 2018, it was crystal clear that in many respects the City had really stepped out of bounds in its heavy handed requirements to force owners of URM buildings to retrofit their buildings over a given time frame, but more importantly to put signs up and include in leases some rather disturbing notifications of the potential dangers of occupying these buildings.

“Plaintiffs have demonstrated a substantial likelihood of success of their First Amendment Claim enjoining enforcement of the Ordinance is necessary to prevent violations of Plaintiffs constitutional rights. Plaintiffs have demonstrated that they will suffer imminent irreparable harm and if they are required to comply with the Ordinance, and that the balance of equities tips favors the Plaintiffs and it is in the public interest to prevent the violation of Plaintiffs constitutional rights”.

This was the nice legalese of the opinion and the judge hammered the city further in his opinion, and if this was a football game the score was not really even close with grassroots groups of building owners, affordable housing, non-profits and even the NAACP who sued the city over the ill-conceived ordinances scoring touchdown after touchdown in a runaway win.  John DiLorenzo, the go-to attorney for such citizen suits against the government (see his successful lawsuit against the Water Bureau years ago and his recent $1 billion successful verdict against the state on behalf of 12 counties over mis-managed state forests), was his understated self but you see a glint in his eye as he explained how the evidence and using of the city’s own words doomed them from the start.

Exterior Truss
courtesy Wikipedia

“It was not a difficult case to prove as their actions and process really delivered a very logical roadmap to their violating multiple statutes and constitutional rights.”  He was representing a varied and grassroots organization called SAVE OUR BUILDINGS that included non-profits but mostly small “mom and pop” URM property owners across the city that fervently coalesced over a year ago and really got the word out and developed a cohesive message of logical opposition to the city with the experience and track record of John DiLorenzo at the point of the spear.

Like in many city issues, the process or lack thereof is almost worse than the disagreements themselves.  This was definitely true with the URM issue as it was felt that the policy committee convened by the city starting back in 2014, while well-meaning as it had some decent measured recommendations, it was the city machinery that grabbed the report and “rammed it down our throats” with a city ordinance that was considerably more harsh, had little outreach and transparency,  all of which was compounded by assumptions made on flawed information.

Commissioner Saltzman led the charge as ever since seismic code requirements were put in place in Portland in 1995 only 8% of URM buildings have been retrofitted which to many at the city was too little and too slow especially as geologists everywhere ratcheted up the probability and severity of huge Cascadian subduction zone earthquake and its impacts to buildings and people.

“Based on the risks Portland faces, the need to ensure public safety, the lack of progress under current codes, the effectiveness of mandatory seismic retrofit policies in other locations and the results of an independent cost-benefit analysis, it is recommended that the city or Portland adopt a limited and mandatory seismic strengthening program.”

This led to a policy committee forming three years ago with a good mix of stakeholders that studied the issue and offered some practical possible solutions that many thought was a good starting point.  But the city took this report and really made it more stringent with one aspect that really poked the bear of citizens and owners of URM buildings. It was the city’s unilateral decision to add signs in front of the buildings stating the buildings “would be unsafe in the event of a earthquake” (directly contrary to the Policy Committee’s advice) that really ignited the blowback and really made a very divergent mix of groups come together to oppose the city’s strict mandated seismic requirements.  This placard requirement really shown light on to the URM situation where many banks and other mortgage companies became much more cautious in their financing of URM buildings with many refusing to make commercial loans on any buildings on the 1600 property list while scrutinizing existing pre-seismic requirement loans more closely. That made selling more difficult, which obviously puts a big damper on value.  Additionally in the ordinance the city jacked up the level of requirements substantially for many properties from those recommended by the Policy committee which will increase retrofit costs often by more than 300%.

One last over-reach was that the ordinance had these ill-conceived, more strict and arbitrary requirements by the city that are blatantly ironic in that they almost certainly will exacerbate several issues the city is trying to combat; Namely many URM buildings and their owners don’t have the resources to complete these seismic upgrades and thus will sell to developers who want to capitalize on the valuable land these buildings have thus leading to demolitions.  Besides diminishing the historical fabric of the city through removal of some classic older buildings, many of these structures contain older and more affordable apartments thus potentially reducing the already scare affordable housing supply. Also, many of URM buildings on the list are churches, non-profits or social service agencies, or are home to artists, musicians and small business that could be easily displaced through a sale but will continue to occupy deteriorating properties because the owners have neither the resources, nor will banks provide funds to meet the requirements.  Then add to the fact there are numerous publicly owned buildings like schools, office buildings and more that are on the list, and the whole concept of the city’s  URM ordinance became more suspect and ill-conceived.

Here is the clincher in my mind.  Which is how sloppy, arbitrary and downright wrong the URM database is.  The city several times on their website makes such a contention: “the accuracy of the database cannot be guaranteed due to a number of factors” and how about this – “Some of the buildings may not be of URM construction” and it just keeps going “This database may not be completely correct or comprehensive”.

It is well known and admitted that the database, which was started back in the 90’s, was largely the work of PSU graduate students who used “drive by” inspections with no one actually setting foot in the building or looking at the structure.  While the list has been updated with google maps and “some” review of building records, there are numerous buildings that do not have URM construction along with multiple buildings that have recently undergone significant seismic upgrades are still on the list coupled with many more errors and omissions.  So if the information, which is a key pillar of this 5 year autocratic process, is so flawed, it is no wonder the judge so completely called out and ruled against the city.

So the city did not fight the Judge’s injunction of May, which was smart as they knew pursuing this issue after the legal lambasting was fruitless and a waste of resources. The city council finally repealed the whole ordinance in October, just one year after it was ignominiously passed exactly a year earlier.

Along with the full repeal of the ordinance, a “new committee” was formally established to review URM issues, with the goal of being much more transparent and receptive to some common practical and economic solutions through some well thought out incentives and potential programs to lessen the impact on property owners, while also getting more buildings protected.

Though not mentioned, hopefully, in my view, this comes with a thorough analysis of the building inventory of URMs to get very accurate information on the construction quality and seismic needs of each property.  Already with this proposed new committee there is concern as the city is again allowing the Bureau of Development Services run the process, which was the bureau that many thought really was the driver of the other very strict and unilateral aspects of the ordinance.  Additionally, they have restricted the number of property owners on the committee and given over 70% of the spots to non-owners which leads some to think it will get stacked with those more strident in making URM owners upgrade their buildings… a bit of a repeat of the city’s flawed ordinance.  We will see… the first meeting of the 27 member committee is December 27th