A small local, family-owned home building company is struggling financially because of a disagreement with the Portland Bureau of Transportation over the location of a driveway on a duplex.
At the center of the dispute is a policy adopted by PBOT last May that says all duplexes should be served by a single driveway in the center of the structure. Mari Ives, general counsel for Valhalla Custom Homes, has notified the city that she intends to petition the state Land Conservation and Development Commission for an order preventing PBOT from enforcing its year-old driveway policy.
"Their design is ugly, and they don't have the legal authority to require it. We're not going to build a project we have to apologize for when a potential customer shows up," Ives says.
The transportation bureau disagrees, saying it has the authority to adopt the policy, which only clarifies its existing preference. The city has 60 days from the April 13 notification to respond to Ives.
Ives is the wife and mother of the company's co-owners, who are her husband, Gary, and their two sons, Chris and Jonathan. The family has all of its money tied up in two properties it purchased around the time the policy took effect, says Ives, adding the family is now living on its savings.
Ives says the company planned to build their first duplexes on the properties. They were not notified of the policy until after they commissioned a design for a duplex for the first site, which is located at 4205 N.E. Rodney Ave.
The design included two driveways leading to two garages on the outer edge of each duplex. After the design was approved by other development-related agencies, PBOT refused to issue driveway permits for that design, saying it violates the year-old duplex policy.
Ives says the family does not want to build that design, arguing that it not only looks bad but is hard for occupants to use. To reach the garages, the shared driveway would have to be shaped like a funnel, making access to them difficult, if not dangerous.
More than that, Ives argues PBOT does not have the legal authority to require that duplexes be served by a single driveway because that is a de facto housing design requirement. In addition to the exterior appearance, it limits where internal walls, internal stairways and windows can be located on first and second floors.
The single-driveway design also requires the duplex to be set farther back from the street than the two-driveway design, Ives says, reducing the size of the back yard. It would prevent the company from building a planned accessory dwelling unit at its second site, she says.
"Design reviews are outside the scope of the transportation bureau's authority. If I wasn't a lawyer, we couldn't afford to take this on."
According to Ives, the problem has thrown her family's plans for its business off track. Her husband had spent decades building homes with other partners before the company was founded in November 2012. They started out building just one or two homes a year but decided to increase production as Portland's real estate market heated up. They completed three last year and planned to do four this year but haven't even started their first one yet because of the disagreement with PBOT over the duplex.
"It's set us back a year, maybe more," Ives says.
PBOT: Policy not new
The Portland Bureau of Transportation disagrees with the criticism, saying the one-driveway duplex policy benefits the most people.
The policy was adopted by PBOT's Development Review Division on May 31, 2017. It is headed by Kurt Krueger, who insists the policy is not actually new, but merely a more formal statement of PBOT's longtime preference for single-driveway duplexes. The goal is to preserve as much on-street parking as possible, which is becoming increasingly important as Portland grows.
"We allowed a lot of exceptions in the past, but now more and more housing is being built, and the demand for on-street parking is increasing. We're not creating a policy, we're clarifying a policy," Krueger says.
Krueger's division has adopted numerous similar policies over the years. He admits that like the others, the duplex driveway policy — Development Review Policy 6.03 — was adopted without any public review or City Council action. Such a process is only required for adopting rules, not policies that carry out rules.
In fact, although Krueger says he told his supervisor the division was working on the policy, he did not notify anyone else above him in the chain of command, including PBOT Director Leah Treat or Transportation Commissioner Dan Saltzman.
"It's a small change that affects a small segment of the housing market. The bureau is under pressure to respond to the increasing number of permit requests and we wanted to give more direction to our staff and the development community," Krueger says.
According to Krueger, the policy is authorized by Title 17 of the Portland City Code, which gives PBOT the power to preserve on-street parking, among other things.
But, in her April 13 letter to the city, Ives argues the city code is overridden by state land-use planning laws. She thinks that Oregon's statewide housing goal — Goal 10 — encourages a wide variety of all kinds of housing. State laws also require that policies for building housing must be easily understood, not buried in agency rules adopted without a public process, she says.
"I've talked to other builders who oppose this policy, and they all tell me it will cost too much and take too long to fight the city, so they're going along with it. But we're not willing to uglify our project to meet a requirement that isn't legal," Ives says.
Chronology of dispute
According to a chronology provided to the Portland Tribune by Ives, her family's company first looked at a 50-foot-wide lot at 4205 N.E. Rodney Ave. for possible purchase in late March 2017. After determining a duplex could be constructed on it, the company made an offer, subject to a due diligence period.
Ives says the company visited the Development Services Center operated by the Bureau of Development Services to discuss the property in early April. Staff confirmed the zoning and allowed uses, she says.
The company then met with PBOT to discuss the driveway design. Although this was just a little more than a month before the new policy was adopted, no one mentioned it was in the works, Ives says. Instead, the company was told the only requirement was preserving at least one 18-foot parking space, which the two-driveway design would do, she says.
The company purchased the property in late April 2017 and commissioned a custom design for a duplex with two driveways leading to garages on the outside walls of the structure. It also tore down the small, plain house on the site. The company then purchased a second property for another duplex at 736 N. Sumner St. in August 2017.
Planning and zoning approvals for the first duplex were issued in November 2017. But then, PBOT denied the application for two driveways in December, requiring the entire project to be redesigned as a condition of approval, Ives says.
She says the company was caught off guard by the demand. When they tried to understand it, they were completely surprised to learn about the one-driveway policy that had been adopted on May 31. Family members were familiar with the design because other developers already had built some one-driveway duplexes in town. One is currently under construction just a few blocks to the east of their site in the 4200 block of Northeast Kerby Street.
But Ives does not believe they are the kind of products most consumers want — so the company should not be required to build them.
"A decision like this that affects everyone should be made in an open process where everyone can comment on it and know when it's going to take effect if that's the final decision," Ives says.
Although Krueger says more duplexes are being built every year, the numbers could increase dramatically if the City Council approves the recommendations of the Residential Infill Project that is currently being considered by the Planning and Sustainability Commission. Among other things, they would rezone 60 percent of Portland's single-family neighborhoods to allow duplexes and triplexes.
The recommendations were written by the staff of the Bureau of Planning and Sustainability, which has been working on the project since former Mayor Charlie Hales initiated it around three year ago. It is expected to go to the council for approval this fall.