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After the Portland City Council approved a plan to build affordable housing in the Pearl District last month, Gerry Mildner, head of the Center for Real Estate at Portland State University, questioned the city’s logic when it comes to growth.

For the city’s model for growth to succeed, Mildner contends rents in the region will need to rise to San Francisco Bay Area levels. The city needs to expand its urban growth boundary outward instead of assuming building will continue unabated on cheap land, requiring demolition of existing properties and driving up construction costs, he said.

It’s not the first time Mildner, who has a doctorate in economics and helped the establish the Center for Real Estate and the PSU master’s degree program in real estate development, has had a beef with the city’s grown plan. He believes the city’s decision to not expand its urban growth boundary is folly.

Last year, Milner wrote a 30-page paper titled 鈥淒ensity at Any Cost,鈥� critiquing Metro’s 2014 Urban Growth Report. The report 鈥渄istorts economic data and will lead the region to make decisions that will harm economic growth,鈥� he said.

The damage comes from an unrealistic view of housing markets, Mildner claims. He predicts apartment rents will double in the next 20 years and create a 鈥渓arge burden鈥� for low-income households.

In response to Mildner’s 2014 paper, Metro staff writer Nick Christensen wrote an article quoting planning director John Williams and interim Metro Research Center director Molly Vogt, who refuted Mildner’s report. The article also quoted PSU urban studies professor Ethan Seltzer, who was critical of Mildner’s assertion.

鈥淕erry’s article is only the last contribution from the UGB-deniers, who have long claimed that increases in housing prices could be mitigated by getting rid of the UGB and that economic collapse was imminent because of the UGB,鈥� Seltzer said. 鈥淥regon task forces 鈥� have found otherwise and actually peer-reviewed scholarship has continued to refute those stark, simplistic claims.鈥�

Mildner responded to the critique with another paper, 鈥淒ensity at Any Cost, Revisited,鈥� published earlier this year in the Center for Real Estate Quarterly Report.

One of the problems is that Metro blindly accepts the city’s recommendations to keep the UGB close in, he said.

鈥淔rom my point of view, Metro and Portland are acting in tandem,鈥� Mildner said. 鈥淢etro is taking the city of Portland at face value and not analyzing the data themselves. Staff people see problems, but leadership at Metro is accepting (the city’s recommendations for growth) at face value.鈥�

The region is 鈥渓iving on a land diet鈥� by growing up instead of out, he said. 鈥淭he higher density we go, the more expensive it is to develop property.鈥�

Mildner said the city’s flexible zoning laws allow for a variety of development and the city and Metro expect growth to take place mostly on the east side of the Willamette River.

鈥淚 don’t think zoning should be reduced, and there are no restrictions on how dense things could get on 82^nd (Avenue) or Gateway (neighborhood),鈥� he said. 鈥淭he real problem is believing that it will develop at those levels and that is an acceptable alternative for the region. It’s not every likely to happen and is a bit of fantasy. It’s almost like you’re planning your retirement on a lottery ticket.鈥�

Developers are not going to flood those areas with housing projects because it won’t be profitable at current rent levels, he said.

鈥淭hose are some of the lowest rent districts in the region and for this zoning to be effective implies that rents have to be high in a few places, but they have to be high all over the place,鈥� he said. 鈥淣obody’s going to build a building on 82^nd or Gateway unless they can rent it for $2 per square foot.鈥�

One answer is for the city and Metro officials to look to the west to expand, Mildner said. Metro brought Damascus into the UGB, for example, but development is at a standstill there because voters haven’t approved a comprehensive development plan. Stafford, to the southwest, would have been a much better area for Metro expansion, Mildner said.

鈥淪tafford would be very useful land to add to the boundary,鈥� he said. 鈥淭hey have good schools and have the infrastructure.鈥�

Infrastructure is important for development and Metro has 鈥減ut too many eggs in the basket鈥� of mass transit and light rail, Mildner said. He suggested a regional gas tax or some other funding source to help pay for road improvements to encourage growth outside of the city center.

鈥淓ighty-five percent (of people) still use cars,鈥� he said. 鈥淚f we were more accommodating to putting in some arterials and some lane widening, communities would be more accepting of housing.鈥�

Improved roads would give Damascus better access and the same is true for the west side, Mildner said.

鈥淐ommunities taken in with expansion of the UGB need to have a pot of money to make improvements鈥� he said.

But because UGB is not being moved outward, the only way Metro’s growth model can succeed is for rents to go up, he said.

鈥淭hey can achieve their plan if our rents go through the roof and we become one of the top five in the country (for high rents), which is completely unrealistic,鈥� Mildner said. 鈥淭heir whole economic strategy is attracting engineers from the Bay Area鈥�But if housing is not cheaper, they’re not going to move.鈥�

Metro’s growth plan is 鈥渋nternally inconsistent,鈥� he said and could lead to Portland becoming like slow-growing Santa Barbara, Calif., where rich people go to retire.

鈥淚t’s not a place for job prospects and we’re setting up for our kids to move to Atlanta or Dallas or Houston,鈥� he said. 鈥淚’m concerned our young people won’t stay here any longer or they’re going to live in our basements.鈥�

Mildner concluded that the city’s recent decision to pay $1.3 million for affordable housing in the Pearl District will not be effective for low-income residents in the long run.

鈥淲hat small crumbs that Metro offers to low-income residents in the front door of their new initiative, Metro and the city of Portland take away completely through their zero expansion policy on the back end,鈥� he said.