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This Title 24 amendment package will incorporate changes required by FEMA in July of 2024 in order for the City to maintain participation in the National Flood Insurance Program (NFIP) and so Portland’s residents and property owners continue to be eligible for flood insurance under the NFIP. As stated above, FEMA’s July 2024 letter directed all participating NFIP jurisdictions in Oregon to implement a list of Pre-Implementation Compliance Measures (PICMs) while FEMA continues to work on long-term Endangered Species Act (ESA) measures to avoid potential impacts on endangered and threatened fish species. 

Upon receipt of the FEMA letter, staff from multiple bureaus worked to determine the City’s approach to complying with the PICMs, while also recognizing the significant amount of work that the City has already completed to ensure compliance with FEMA’s expected long-term ESA measures. On November 26, 2024, then-Mayor Ted Wheeler sent a letter to FEMA outlining the City’s strategy for compliance with the PICMs.

As described above, the Chapter 24.50 amendments in this code package only apply to areas within the FEMA Special Flood Hazard Area (100-year floodplain) that were not included in one of the City’s previous long-term floodplain development amendment packages: River Plan / South Reach, Floodplain Resilience Plan, and Chapter 24.50 Flood Hazard Areas Code Update Project. 

The PICMs will apply in the following floodplain areas:

1. North Reach of the Willamette River, which generally includes the river north (downstream) of the Fremont Bridge on the west side and north of the Steel Bridge on the east side;
2. Johnson Creek, Crystal Springs, and Tryon Creek; and
3. Properties located along the Columbia River, Lower Columbia Slough, and the Central Reach and South Reach of the Willamette River that are in one of three industrial zoning designations: Heavy Industrial (IH), General Industrial 2 (IG2) and General Employment 2 (EG2). 

In these areas, new flood storage requirements will apply to approximately 1,890 acres, roughly 1,260 acres of which are in one of the three identified industrial zones (IH, IG2 and EG2). Because existing environmental zoning requirements already meet the PICM tree replacement requirements, the total area that will be subject to new tree and vegetation requirements is approximately 380 acres, with roughly 310 acres in the identified industrial zones. The 100-year floodplain covers a total of 4,280 acres of land throughout the city. 

Potential Economic and Real Estate Development Impacts 

The application of the PICMs is expected to have some negative impacts on industrial and residential properties, as described below. However, as described above, the City must comply with the PICMs in order for property owners and residents to maintain access to the NFIP. Without the amendments of this package, Portlanders could lose access to FEMA’s insurance program and disaster relief funds. Flood insurance is required to obtain federally-backed loans, like mortgages and commercial loans. Portlanders currently receive a 25 percent discount on their flood insurance premiums based on the City’s current floodplain development requirements.

The amendments in this package will primarily impact industrial businesses and property owners, though some non-industrial properties will be subject to the new requirements. Development proposed in the areas subject to these new requirements will be required to do the following: 

• Any portion of development proposed within 170 feet of the ordinary high water mark, referred to as the PICM Riparian Buffer Zone, that is not river-dependent will be required to dedicate an area of native vegetation that is equal to five percent of the new proposed development area within the PICM Riparian Buffer Zone. This dedicated habitat area can be located onsite or offsite. The five percent dedication would be in addition to any existing vegetation or habitat improvements required to mitigate impacts to natural resources, but may also satisfy tree replacement requirements (described below) and any applicable Zoning Code landscaping requirements. 

• Any net increase in the volume of development below the 100-year flood elevation, through the placement of soil, other fill material or new or expanded buildings, will be required to be offset by an excavation that is equal to or greater than the volume of new development. The amount of excavation will depend on how close the proposed development is to the waterway: ranging from two cubic yards of excavation for every cubic yard of new development (2:1 ratio) nearest the river to 1.5 cubic yards for every cubic yard of new development at the edge of the floodplain (1.5:1 ratio). 

  The additional offset required by this new requirement goes beyond the existing Metro “balanced cut/fill” requirement that mandates a 1:1 ratio of excavation for every cubic yard of soil or other fill material placed in the floodplain. Mitigation of impacts of new structures in the floodplain is not addressed by existing Metro requirements. 

• Trees that are six inches in diameter at breast height (roughly four feet from the ground) and larger that are removed from the floodplain as a part of development must be replaced at a ratio ranging from 3:1 to 6:1, depending on the proximity to the waterway. This is a significant increase for properties in the Heavy Industrial (IH) zone because tree replacement is not currently required in that zone. The tree replacement requirements in the other zones would only represent an increase if the removed tree were to be located outside of one of the City’s existing environmental overlay zones. Existing tree replacement ratios in environmental overlay zones are consistent with the PICM ratios. 

The areas that will be subject to the PICMs are mostly industrial. The large majority of properties in the three industrial zones are located along the Columbia River, Lower Columbia Slough, and North Reach of the Willamette River. For example, over 90% of waterfront properties in the North Reach of the Willamette River are zoned for industrial use. There are a number of industrially zoned properties within the Johnson Creek floodplain, but the area is mostly zoned for low-density residential and open space uses. Similarly, the Crystal Springs and Tryon Creek floodplains are primarily characterized by low-density residential and open space zones. The City’s previous long-term floodplain development amendment packages (River Plan / South Reach, Floodplain Resilience Plan and Chapter 24.50 Flood Hazard Areas Code Update Project) did not apply new floodplain development regulations to industrially zoned properties (IH, IG2 and EG2 zones) or any properties in the Willamette River North Reach. Consequently, with these amendments they will be subject to the PICMs until the long-term ESA compliance strategy for the area is determined and implemented. The long-term requirements will be determined as a part of the Columbia Corridor Industrial Lands (CCIL) Ezone Project, which will be adopted along with BPS’s Economic Opportunities Analysis package, and the Willamette River North Reach Project, for which BPS has initiated preliminary technical analysis. 

These PICM amendments are likely to increase the costs of development, but that additional cost will vary depending on site characteristics. New construction and the expansion of existing industrial development in the Willamette River, Columbia River, Columbia Slough and Johnson Creek floodplains will need to identify locations where excavation can offset placement of new soil, other fill material, and/or buildings. In many situations, such as on larger sites, excavating onsite is not expected to create a significant barrier to development. However, in some cases, especially on smaller sites, there may not be adequate space for the required excavation. 

Similarly, the dedication of an area equal to five percent of any new proposed development in the PICM Riparian Buffer Zone represents additional land that will not be available for development. Existing requirements in the North Reach of the Willamette River require a river-dependent primary use so the additional PICM Riparian Buffer Zone habitat requirements will not apply to those uses. For existing industrial uses, this may impact development of ancillary or supportive uses on a site, even those otherwise developed with river-dependent uses. Any development proposed in the PICM Riparian Buffer Zone that is not river-dependent would be required to meet the additional habitat requirements. 

As a result of the flood storage and PICM Riparian Buffer Zone requirements, it may be necessary to reduce the size of development to provide adequate space for excavation or mitigation, to locate the excavation or mitigation off-site on another property owned or under the control of the applicant (e.g., through an easement), or to purchase flood storage credits from a mitigation bank authorized to sell those credits (flood storage credits are currently only available for development along the Willamette River). Dedicating areas of the site for habitat or flood storage mitigation, reducing the size of the development to accommodate mitigation, or adding the costs of purchasing flood storage credits from a mitigation bank could affect development feasibility. Additionally, the mere existence of these new requirements may cool the market for industrial land in the areas subject to the new PICMs. 

Implementation of these additional requirements is not expected to influence timelines for development, as the approvals will be made through existing processes. Given new requirements for increased excavation and, depending on the proposed use type and location, additional habitat mitigation, projects may be subject to requirements that exceed those of existing regulations. However, there are already existing requirements that would need to be met that address similar issues, including Metro’s requirements for balanced cut/fill (1:1 ratio) for placement of soil or other fill material in the floodplain (including a Metro-defined flood boundary for the 1996 flood event in Portland), riverbank landscaping, and mitigation of development impacts on natural resources. 

The impacts to industrial development mainly affect land along the North Reach of the Willamette River, which is also known as the Portland Harbor. The deep-water shipping channel is a unique economic resource that supports Oregon’s traded sector businesses and is not readily available elsewhere in Oregon. However, the requirements have exemptions for river-dependent uses that will lessen the impact on economic development.

In addition to the effects on industrial areas there will also be some impacts to low-density, single dwelling residential lots, mostly in the Johnson Creek floodplain and non-industrial properties of the Willamette River North Reach. The same considerations identified above for industrial lands will apply to these residential properties. As a part of any development on these sites, such as new construction, expansions of existing homes or addition of ancillary structures, applicants will be required to meet increased excavation requirements to offset the placement of soil, other fill material, or structures in the 100-year floodplain. Applicants would also be required to dedicate an area equal to five percent of any development proposed in the PICM Riparian Buffer Zone for additional mitigation plantings. Many of the single-dwelling residential lots in the Johnson Creek floodplain are larger than those in other parts of the city, allowing for new construction and improvements on those lots to be located outside the PICM Riparian Buffer Zone. Generally, this will allow for many such projects to avoid the additional habitat mitigation requirements there. However, the 100-year floodplain frequently extends a substantial distance from Johnson Creek. As a result, development will be required to excavate more to address the flood storage impacts of placement of structures and fill in the floodplain than is necessary to meet current requirements. Similar to industrial development, meeting these requirements could negatively affect the economic feasibility of constructing or improving homes on affected lots. 

Engagement of Potentially Affected Parties

Since July 2024, City staff have worked to develop the specific code amendments included in this ordinance while also informing potentially impacted parties of these forthcoming requirements. City staff engaged interested groups in a variety of venues, including: 

• September 19, 2024, and November 21, 2024 – Presented to the PP&D Development Review Advisory Committee (DRAC).
• September 18, 2024, and November 20, 2024 – Presented to the PP&D Building Owners and Managers Association (BOMA)/NAIOP subcommittee.
• September 20, 2024, and December 18, 2024 – As a part of ongoing conversations related to the BPS Economic Opportunities Analysis work, met with the Working Waterfront Coalition, an industry group focused on river-dependent industrial business in the city. Discussed the future floodplain requirements, including the anticipated PICM implementation.   
• October 2, 2024, January 7, 2025, and March 4, 2025 – Met with Port of Portland staff to discuss the City’s PICM approach and timeline. During this time, staff provided updates via email correspondence with Port staff.
• March 20, 2025 – Met with members of environmental groups and other interested parties of the North Reach of the Willamette River to review the PICM amendments and answer questions.   

In these various meetings, attendees expressed some concern about the potential implications of the implementation of the PICMs but, in general, these presentations were focused on educating meeting attendees on the forthcoming FEMA requirements that would be implemented to maintain access to flood insurance and federal disaster relief funds.  

Though amendments to Title 24 generally go directly to City Council and do not include a public review process, City staff published a public-review draft of the proposed regulations to raise awareness of the forthcoming PICM amendments and receive public comments to identify potential areas of improvement in the code amendments. To that end, PP&D released a draft of Title 24, Chapter 24.50, amendments for public review between March 4 and March 25, 2025. 

During the public review period, three comments on the draft amendments were received. These comments provided recommendations on the general direction and components of the amendments as well as specific technical details of their implementation. In response to the comments received, City staff reviewed the draft code to identify where additional clarity in the requirements was needed and staff evaluated the issues raised related to implementation and incorporated a number of clarifications in response to the public feedback. They include: 

1. Revisions to permit application requirements;
2. Clarifications on how compensation ratios are applied when proposed development straddles areas with differing compensation ratios;
3. Clarification that beneficial gain requirements apply only to new development;
4. Clarification that required tree replacement and other plantings may also be used to satisfy requirements of both Title 11 and the landscaping requirements of Title 33;
5. Clarification related to the location of required tree replacement; and
6. Revisions to the scope of exemptions.