A few years ago, at the beginning of the pandemic, I wrote an article about the shifting norms in building design and legal risk for architects and engineers arising from the quickly evolving shifts in building use and public behaviors. The uncertainty at the time gave rise to a need for increased flexibility in design that would ultimately be reflected in the applicable standard of care for design professionals. The article’s purpose was to make note of how the standard of care can change over time because it is based on what is expected of a professional in the local community and what architects and engineers, as well as owners and contractors, could do to manage risk when those standards are changing rapidly.

Another similar stress on the standard of care is arising in affordable housing. There is no question that the United States (Oregon in particular) is facing a severe housing shortage. A key component, if not the key component, to any solution is the availability of housing across a broad price range.

In just the past few months, the Oregon Legislature passed House Bill 2001, which among other things, emphasizes the building of “housing to meet the need of Oregonians at all levels of affordability.” The legislation has set lofty goals, including housing that is “safe, accessible and affordable in the community of [the owner’s] choice,” “equitable,” and supports “fair and equitable housing outcomes, environmental justice, climate resilience and access to opportunity.” The bill also recognizes that housing production “should not be undermined by litigation, regulatory uncertainty or repetitive or unnecessary procedures.”

No one can doubt such a housing bill’s sincerity and good intentions, but trying to balance these competing objectives will be challenging. A great deal of that challenge will fall on the architects and engineers tasked with designing housing that can meet the legislation’s goals and remain economically viable for the owner or developer. Forests have been decimated for the printing of articles about housing inequity, supply, and the proposed solutions. I am not here to address those issues but to speak to the contractual and professional standards that allocate the risk of attempting to solve those problems while keeping in mind the specific goals of the Oregon bill to reduce litigation, regulatory confusion, and wasteful procedures.

While a professional’s standard of care is something imposed on that profession by the “common law,” that being regardless of what the parties privately agree by contract, the expectations of the parties’ performance and the application of the standard of care can be clarified and limited, to an extent, by the contract and the context of the specific project. For example, for a medical doctor, there is a difference between brain surgery and diagnosing a cold. For architects and engineers, there is a difference between designing an operating room and designing a local clinic.

The general statement of the design professional’s standard of care is well described by the standard language used in the American Institute of Architects’ contract forms, such as the AIA B101-2017, which states for architects at Section 2.2 “the Architect shall perform its services consistent with the professional skill and care ordinarily provided by architects practicing in the same or similar locality under the same or similar circumstances.” The same standard applies to engineers and any other type of design professional.

The phrases “same or similar locality” and “under the same or similar circumstances” are key for affordable housing. For any design contract for a construction project, it is very important to specify not just the type of project but any limitations or special circumstances that relate to the purpose. This would be especially important to any project that is meant to meet the goals in HB 2001. While there are minimum standards required by the building code for any project, not all projects are created equal, and part of the budget limitation in affordable housing will inevitably affect the quality of the construction. There will be pressure to provide the minimum cost design allowed by the code – but this could easily conflict with the bill’s other goals. There is often talk of relaxing building codes, changing zoning, reducing lot sizes, increasing density, eliminating parking, reusing brownfield properties, repurposing existing buildings, and eliminating certain required improvements, such as sidewalks. These may reduce the cost of projects and add to low-cost housing but are arguably not “equitable” to more expensive housing.

While the policy balances are for others (public officials, owners, developers) to decide, the limits on the project and the balance of the policy goals should be expressed in the design and construction contracts. For example, it has been common for years now that in the contracts for the design and construction of apartment buildings, even higher-end apartment buildings, there be limitations on condominium conversion and express acknowledgments that there is a marked difference in quality standards between buildings designed as apartments and those designed as condominiums. The purpose for such acknowledgments is to put on record the understanding between the owners, the designers, and the contractors, the specific circumstances of the project and thus to put guardrails on the applicable standard of care. This acknowledgment and the limiting circumstances of the project could then be used in any subsequent construction defect litigation to define the professional standard of care for that particular project.

A similar acknowledgment could be used for affordable housing projects, especially in light of HB 2001. The competing policy goals could be stated, and the owner or developer could accept the ultimate responsibility to balance those goals. This contractual limitation would be especially important if there were concessions in the applicable codes applied to the project by public officials to reduce costs. While there will always be minimum health, safety, and accessibility standards that design professionals should never design below, there can be flexibility on any “premium” to design and construction. Designing and constructing affordable housing should not bring increased risk of liability. A carefully crafted contract can make that happen.

This column is intended to provide readers with general information and not legal advice. Consult professional counsel for help regarding specific situations.

Column first appeared in the Oregon Daily Journal of Commerce on May 12, 2023

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