By Keenan Ordon-Bakalian, AttorneyThis article was originally appeared in the June 19, 2020 edition of the Daily Journal of Commerce Oregon.
The COVID-19 pandemic has upended the world of land development, causing confusion and uncertainty for developers and contractors across Oregon. For some of us in land development, COVID-19 has led to a shift to working from home, but for our members in the construction industry, remote work has not been possible. In addition to the impact of COVID-19 on the construction industry, the land use permitting process has also been dramatically altered by the spread of coronavirus, leading to project delays and variability for both applicants and local government.
Although the spread of coronavirus and its impact caught many of us unawares, due to the nature of public service, local government was not well-equipped to transition to remote work at the onset of the COVID-19 outbreak. Many municipalities have expended tens of thousands of dollars to acquire remote work technology and adapt to new workflow processes.
For land development professionals on the managerial and administrative side, simply walking into your local municipal office to submit applications or pull permits is no longer an option. Municipal permit and development services centers have been closed since mid-March. Permit submittal is now conducted digitally or, in some jurisdictions, by appointment. Meetings traditionally conducted in-person now occur on one of the plethora of digital meeting platforms. With local government staff working from home, the processing and review of land use applications, engineering plans, and building permits is continuing. However, the transition of staff to remote work and digital permitting processes has dramatically slowed the review time for land use applications in many jurisdictions.
A key consideration for developers is that the time restraints Oregon law imposes on local government to process land use applications in 120 or 150 days—depending on whether the subject property is within the urban growth boundary—are still in effect. Jurisdictions may ask applicants to grant a waiver or toll this statutory processing deadline, but it is up to the applicant to grant such a waiver. If the applicant chooses to do so, it should be done in writing and for a definite period of time. Especially in this period of uncertainty, granting an indefinite waiver of the land use processing timelines may result in significant project delays.
Many jurisdictions are now conducting public hearings via teleconference, with some holding “practice” hearings to acclimate the applicant, hearings officer, and the public to the municipality’s teleconference platform of choice. Keep in mind that the ability of the applicant to put on evidence during a digital public hearing may be significantly limited by technological constraints. To avoid such issues, applicants and their representatives should ensure that all supporting evidence is submitted into the record prior to the hearing. Applicants can also submit exhibits to local government staff, who may have a greater ability to display these exhibits during the digital hearing.
Importantly, the Land Use Board of Appeals is continuing to process appeals, with in-person filings made on an appointment-only basis and oral arguments being conducted by teleconference.
With Phase 1 and 2 reopening underway across the State and the summer building season upon us, developers and contractors should continue to exercise caution and adhere to all COVID-19 safety measures. After months of experiencing pandemic-related delays to projects, avoiding a “second wave” outbreak of COVID-19, which may result in a delayed reopening, is both a public health and business necessity.
Finally, as reopening commences, the question remains—what lasting impact will the COVID-19 outbreak have on Oregon’s development landscape?
Although the land development process has not been directly impacted like that of the construction industry, the biggest disruptions have been coordinating site visits and delays in application processing, including meetings with municipalities, project consultants, and other parties needed to complete the transaction and entitlement process. In the short term, state and local government will be allocating significantly more resources to economic recovery and public health measures, which may lead to capacity and resource-related delays to the land use process. Specifically, budget cuts have resulted in City of Portland employees taking occasional unpaid furlough days through October of 2020, which means delays in service.
Long term, there will be irreversible changes in the way we work, with more people working remotely on a permanent basis and an increased reliance on cloud-based permitting processes and digital meeting platforms. This, in turn, will have a dramatic impact on development trends, with higher demand for residential supply that caters to those working remotely on a permanent basis. This shift to remote work may also lead to decreased demand for commercial office space, causing oversupply and a limited number of new construction starts. Also, the attendant economic crisis may contribute to increased demand for more accessible multifamily options.
In addition to shifting development trends, the impacts of COVID-19 have rocked the architecture industry, leading many architects “to reevaluate their life’s work, and what it might mean to design for a world that will never be quite the same, especially when it comes to how we gather in and use large public spaces, like airports, hotels, hospitals, gyms and offices,” Alyssa Giacobbe writes in Architectural Digest. Concerns about future viral outbreaks may lead to projects being designed with an eye toward open spaces that promote social distancing.
It may be years before the impacts of COVID-19 on land development are truly quantifiable. Developers must remain vigilant in responding to shifting trends and should take steps to promote flexibility within their companies, which will allow them to best respond to the next period of uncertainty.
Keenan Ordon-Bakalian is an attorney in the Jordan Ramis PC land use and development practice group. Contact him at email@example.com.