Metro Council mulls changes to urban boundary process

The current deliberations are part of a series of promises the Metro Council made in late 2015 when it voted to not expand the urban growth boundary for the first time during its regular state-mandated review process.

With the region facing a severe housing shortage, the Metro Council is changing when and how it decides whether to expand the urban growth boundary where new development can occur.

But don't expect the elected regional government to soon approve a series of new subdivisions, despite the low number of single-family homes for sale. Changes under consideration would require cities seeking a boundary expansion to demonstrate they are already doing everything practical to create more housing in their existing urban areas.

In Portland, that has meant encouraging new apartment buildings along major transportation corridors and so-called missing middle housing, including duplexes and accessory dwelling units, in existing neighborhoods.

Such density increases are not without controversy, however, as the Metro Technical Advisory Committee (MTAC) learned when it met to discuss potential expansion policy changes on April 5. During the public comment portion of the meetings, James Peterson, the chair of the Multnomah Neighborhood Association's Land Use Committee, said his organization is fighting them.

"Affordable homes are being demolished and replaced by very expensive housing," said Peterson, who said the association that represents part of Southwest Portland has retained an attorney to challenge the policy encouraging missing middle housing before the state Land Conservation and Development Commission (LCDC), which must approve it.

The committee includes representatives of the cities and counties within Metro's jurisdiction, in addition to the state Department of Land Conservation and Development and such stakeholder groups as the Portland Metro Home Builders Association (PMHBA).

After Peterson spoke, MTAC members debated how cities could best demonstrate they are making maximum use of their existing land before requesting a UGB expansion. The committee's recommendations are due to the council by this fall. The council will decide whether and where approve any expansions in December 2018.

Promises made

The current deliberations are part of a series of promises the Metro Council made in late 2015 when it voted to not expand the urban growth boundary for the first time during its regular state-mandated review process.

Although the council unanimously agreed there was enough undeveloped land within the UGB to accommodate 20 years of growth as required by Oregon's land use planning laws, the decision was still controversial. Home builders and others argued the council was overestimating the number of people willing to live in the kind of multi-family buildings being constructed primarily in Portland. Historically, most people in the region have chosen to live in single-family homes.

In response to the criticism, the council promised several things.

First, it pledged to revisit the decision sooner than the every-six-year review period set forth in state law. So instead of waiting until 2021, the council is now scheduled to consider whether the UGB needs to be expanded just three years after the last decision.

The council also promised to engage in a regional dialogue about how to improve the review system. In the past, much of the decision making has been a numbers game — trying to predict how many more people will live in the region in 20 years and whether there are enough acres of undeveloped land to house them. This has led the council to approve UGB expansions in some areas where no new development has occurred because no one can figure out how to pay for the infrastructure to support it.

To change that, the council appointed an Urban Growth Readiness Task Force that included Metro councilors, county chairs, regional mayors, and representatives for such stakeholder groups as PMHBA and 1000 Friends of Oregon land use watchdog group. It began meeting in May 2016 and developed a series of unanimous recommendations the council accepted in a resolution approved in early February. Among other things, it says cities seeking UGB expansions should submit concept plans for the requested areas that address such topics as governance, infrastructure financing, and how to provide the full range of housing, including affordable housing.

"Why are we doing things differently?" Metro Principal Regional Planner Ted Reid asked at the MTAC meeting. "In the past, we have added acres without knowing how to build housing."

Finally, the council promised to explore allowing cities to request relatively small UGB expansion outside the formal state-required review cycle.

Working with regional mayors, it drafted and sponsored House Bill 2095, which will allow the council to consider what it calls "mid-cycle expansions." It was approved by the Oregon House by a margin of 49-9 on April 3 and has been referred to the Senate Business and Transportation Committee.

Urban reserves, rural reservations

The changes are being discussed as the Metro Council is still working to designate urban reserves where the expansions can occur.

The reserves are being designated in Multnomah, Washington and Clackamas counties to provide certainty where development can take place over the next 50 years. The process has been contentious, with some cities, property owners and advocacy groups challenging them before the Land Conservation and Development Commission, which must approve them, and appealing them to the courts.

After years of indecision, the Oregon Legislature intervened and designated the urban reserves in Washington County in 2014. The Metro Council is working with the Multnomah and Clackamas county commissions to resolve questions about their reserves raised by LCDC.

Although the Multnomah County issues appear settled, the Clackamas County Commission is still considering designated parts of the Stafford area as an urban reserve. It held a hearing on the issue on April 12 and has scheduled another one for April 19.

Supply and demand

Oregon state economist Josh Lehner says the urban growth boundary is likely a factor in the housing supply shortage, but not the only or even the largest one.

In a series of recent reports, Lehner says the supply of new homes is not keeping up with the number of people moving to the state. That includes both single-family homes and such multi-family projects as apartment buildings. Neither is near its pre-Great Recession highs, although more apartments are being built than single-family homes, especially in Portland.

Lehner says there are many reasons for the slow recovery, including a lack of "shovel ready" lots for new homes.

"Our office's view is that policy matters. When comparing, say, Portland home prices to other large metros, we stand out as being more expensive than most, particularly compared with those of similar incomes. Some of this is likely the long-run effect of our policies," Lehner wrote in a recent report.

But Lehner noted the problem is nationwide and many other factors also come into play, including difficulties getting financing for large-scale development projects.

"The vacancy rate in Boise is right there with Portland's and among the lowest in the nation. I have never heard anyone talk about Idaho's land use laws. Given that the underbuilding of housing is not an Oregon-specific issue, using Oregon-specific explanations does not get you very far," Lehner wrote.