Bureau of Development Services Will Lay Off 15% of Its Employees by Year’s End

In a Nov. 8 Zoom call, the city’s Bureau of Development Services told staff that by the end of the year it would lay off a total of 72 employees, 15% of its workforce.

The bureau is in financial crisis due to fewer permits being requested and therefore less revenue from fees charged by the city to process those permits.

On Wednesday’s Zoom call, the outgoing director of the bureau, Rebecca Esau, said that 56 employees would be notified the week after Thanksgiving that they’ll be out of a job. Last month, the bureau announced it would lay off seven employees, but warned more were certain to come.

The bureau processes construction permits for new and existing buildings across the city. Ninety-eight percent of the bureau’s budget, spokesman Ken Ray says, comes from fees the city charges developers for permits. But those revenues have decreased substantially in recent months, Ray says, likely due in large part to higher interest rates on construction loans. That means the bureau has been burning through its $37 million reserve fund for the past three months at a rate three times faster than it did the year before; the bureau has had to tap $3 million each month from its reserve for the past three months to pay its 378 employees.

The construction downturn is expected to last another 18 months. Ray says the bureau must brace for that by not burning through its reserves as quickly as it has in recent months.