Oregon cities are required to maintain a 20-year supply of land within urban growth boundaries. Proposals to expand those boundaries are notoriously controversial, and can take decades to complete. But not all land inside an urban growth boundary (UGB) can actually be developed, and if not, does it really qualify for inclusion inside the boundary? How much of the 20-year land supply is really ready, or close to being ready, for development? That question has political ramifications, but the answer should be based on facts, not opinions.

Metro designates land for urban development, but the mere designation does not make it ready. Development first requires infrastructure, which takes vast amounts of time, engineering, coordination with urban service providers (a political process) and funding. Cities are naturally cautious about annexing land before sufficient infrastructure for the new development to connect with is in place or there is funding to build it. Cities understand that all land is not created equal. Land that is flat, dry and near existing infrastructure is simpler, less expensive to develop and easier for a city to maintain in the long run, than land that is rolling, wet or further from existing infrastructure.

As the cost of new housing continues to increase, and exceed the average family’s ability to afford it, one might expect that land use policy would favor development of land that can be efficiently served with public infrastructure. However, state and Metro policies compel the protection of agricultural land, which often is the same flat, well-drained land that is least expensive to develop for new housing and complementary land uses. By state law, that land is the lowest priority for development; notwithstanding that it is the least expensive place to develop new housing.

For example, even the new state pilot program to ease UGB expansions for affordable housing prohibits expansion onto high-value farmland, and the housing requires a 100-foot buffer from any agricultural zone. This 40-year-old political decision may have been right for its time, but is now showing unintended consequences – unaffordable housing costs – in the modern economic environment.

It is often said that personnel is policy, and a quick look at the people seated around Metro’s table reveals a remarkable dearth of the municipal officials responsible for extending infrastructure to new neighborhoods. Metro’s Technical Advisory Committee includes representatives from 12 local governments without a public works director or a city engineer among them. Instead, the local governments are represented by other officials for whom cost-effective infrastructure is just one of many competing priorities.

There are very large tracts of land inside the Metro UGB that cannot be built upon solely because the necessary infrastructure cannot be provided cost-effectively. Damascus is a prime example. Despite decades of effort, as a practical matter, most of this area remains ineligible for urban level development, yet it remains in the UGB. Land within the UGB that is not economically developable, despite the best efforts of local officials and developers, should either not be counted as part of the buildable land supply or be excluded from the UGB.

Metro has tried to take the costs into account (estimated at $2 billion to $3 billion in 2004), by excluding a portion of the Damascus area from its land supply. However, even that effort has the overly optimistic effect of saying that a great deal of land can be developed into affordable housing, when that is not the case (at least at today’s costs).

Metro has options, however. It can exclude further lands that are difficult to serve with infrastructure from the supply. It can move the UGB to eliminate parts of the Damascus area and substitute other areas that are more easily urbanized. These actions would help redirect regional support needed for the heavy lifting that Tualatin, Lake Oswego and West Linn have taken on to solve infrastructure planning issues in the Stafford Triangle – the only large block of undeveloped land inside I-205.

We all agree that housing costs are high. Infrastructure costs contribute to the constrained supply of moderately priced housing and are driven by choices about where to locate new housing. We, as a community, need to consider options and make hard decisions to resolve the problem. Governor Kate Brown has made a good start with the new Workforce Housing Initiative, and Representative Tina Kotek is collaborating with housing providers to clear regulatory bottlenecks. We hope other leaders will join their efforts to understand housing cost drivers and find creative ways to address them.

James Howsley is a land use and development lawyer with Jordan Ramis PC. Contact him at 503-598-7070 or at jamie.howsley@jordanramis.com.

Joseph Schaefer is a land use planner with Jordan Ramis PC. Contact him at 503-598-5584 or at joseph.schaefer@jordanramis.com.

The post OP-ED: Identifying the urban land supply during the housing crisis appeared first on Daily Journal of Commerce.

House Bill 4078, signed by the governor on April 1, provides urban growth certainty and opportunity for Hillsboro, Forest Grove and Cornelius. These communities can charge forward with detailed planning and development after years of broad brush planning and litigation. These three communities glimmer in success, along with the justly lauded Rep. Brian Clem, D-Salem, who orchestrated the negotiations.

But while the bill decided the status of 20 specific areas in western Washington County, it is mute regarding the rest of Washington County, and also silent regarding Clackamas and Multnomah counties. The Court of Appeals tossed out the Metro reserves in the middle of the short legislative session, requiring extensive new analysis of many areas not affected by HB 4078.

HB 4078 does ease the legal requirements for the Land Conservation and Development Commission’s (“LCDC”) review and approval of the remainder of the urban and rural reserves. The prior law (according to the court) required the counties and Metro to analyze land use standards that were not apparent to them, apply them to facts, and describe in exhaustive detail how the facts demonstrate compliance with the standards. It also required LCDC to reject any decisions by Metro and the counties that were not sufficiently thorough or completely accurate when applying fuzzy standards to potential facts twenty years hence.

HB 4078 says that even if the counties and Metro do not adequately document their new analyses, the LCDC can nevertheless approve the reserves if evidence in Metro’s record supports their decision. The legislative intent is to thwart appeals that rely on narrow technical details.

With many legal questions answered, the focus now shifts to land use policy and political wrangling, with two key questions to answer. The first question is whether to keep the same exact reserves and simply rewrite the analysis to comply with the Court of Appeals decision. If the answer is yes, this will discourage local governments and property owners from seeking a second bite at the apple. If the answer is no, then all interested parties will dive into the new analysis and drive it for their own purposes, which likely means inevitable delays in approval of Metro reserves as the process fumbles along responding to those special interests.

The second question is whether to keep the same overall amount of urban and rural reserves, but allow changes to the designated areas. If the answer is yes, it’s time for musical chairs. If the answer is to grow (or shrink) the amount of either kind of reserves, the land use players will battle over the spoils.

Regardless of these policy decisions, the counties must scramble. The Court of Appeals requires Washington County to redo its analysis of rural reserves. But a new analysis could discover that more land should be classified as urban, or as rural, or that the amount of urban and rural land should remain the same but the locations should differ.

In Clackamas County, the court ruled that the designation of 7,300 acres of urban reserves in the Stafford area was “impermissibly speculative” due to the forecast of severe traffic congestion in 2035. Assume for a moment the response is to reduce the urban reserves in this area by 25 percent while maintaining the same total amount of urban reserves in the county. Metro and the county would need to find 1,825 acres of new urban reserves.

Multnomah County must redo its analysis of rural reserve area 9D adjacent to Bethany because it failed to adequately consider how the urban reserve factors applied to a portion of the area. The court expressed concern that other study areas designated as rural reserves in Multnomah County may also include portions suitable for urban reserves. It requires LCDC to determine the effect of Multnomah County’s error on the reserves throughout the county. That’s right: They must reanalyze all rural reserves in the county due to the possibility of a similar error elsewhere.

So when you look closely, HB 4078 is a precise intervention, rather than the “grand bargain” touted by many. Many policy questions presented by the Court of Appeals decision remain. And most of the time and expense of resolving the appeals remain as well.

Although HB 4078 gives LCDC more flexibility in its response to the Court of Appeals, the bill does not apply to any other decisions; not even to future Metro urban reserves designations. And this one-time fix does nothing to enhance the authority of local elected officials or LCDC in other urban growth boundary cases. In recent years the Court of Appeals has thrown out several approved UGB expansions around the state, primarily because it did not think the discussions, or “findings” were thorough enough, regardless of whether there were facts to support them.

Under Oregon’s vaunted system, long-range land use planning is not intended as a legislative or judicial exercise; rather, it is supposed to be a local government function overseen by LCDC. Yet once again, state law, as interpreted by the courts, has superseded the tough, practical policy decisions made by local elected officials.

That local officials are frustrated is old news. What remains to be seen is whether HB 4078 portends a new legislative effort to simplify the labyrinthine legal requirements and return land use policy to the local level, or whether it is a unique bonus for Hillsboro, Forest Grove and Cornelius.

James Howsley is a Jordan Ramis PC shareholder and a member of its Dirt Law practice group. He focuses on land use and real estate while serving clients in Oregon and Washington. Contact him at 360-567-3913 or at jamie.howsley@jordanramis.com.

Joseph Schaefer is a land use planner and a paralegal with Jordan Ramis PC. He assists the firm’s attorneys with various land use, real estate and environmental development matters. Contact him at 360-567-3919 or at joseph.schaefer@jordanramis.com.

The post OP-ED: Land use legislation not necessarily a ‘grand bargain’ appeared first on Daily Journal of Commerce.

In September 2010 the Oregon Court of Appeals rejected an attempt by the city of Woodburn to expand its urban growth boundary by 409 acres for industrial use. It concluded that the Land Conservation and Development Commission’s order approving the expansion did not adequately explain compliance with Goal 9 (economic development) and Goal 14 (conversion of rural land to urban uses). Strike one.

The city and the LCDC had proposed two new concepts to justify the size of the expansion.

First, the city intended to make more sites available than would actually be developed over 20 years to provide “market choice” – an adequate inventory of sites from which potential industrial users could select. The Court of Appeals decided that given the variety of industries targeted and the diversity of sites in the planned expansion area, the LCDC had not adequately explained why the market choice approach complied with Goal 9.

Second, an assertion was made that industrial users often purchase more land than they intend to develop within the 20-year planning period to allow room for future growth. The court decided that under Goal 14, local governments are not permitted to include more land than would actually be developed in 20 years.

Of course, in the site-acquisition world, market choice and demand are not new concepts at all. But for Oregon’s state-controlled land use system, the concepts are a departure from established precedents. The words “market” and “demand” do not appear in Goal 14. Market demand for a variety of sites and for oversized sites that will be only partially developed in the short term are not sufficient justification for expanding a UGB.

The LCDC reconsidered and reapproved the expansion in March 2011, finding that notwithstanding discussion of market choice in the city’s documents, the city did not actually provide market choice because it planned for only one site in each of its two largest site classes (100 acres and 50-100 acres).

In addressing the challenge from 1000 Friends of Oregon, the LCDC acknowledged that UGBs cannot be expanded beyond an identified need for the 20-year period. It found that accounting for the surplus land purchased for later use is not providing more than a 20-year supply; rather, it is providing sites with the characteristics necessary to provide jobs. The LCDC explained how the city’s expert consultants at ECONorthwest analyzed industry needs and established an adequate factual base for the city to rely on.

The LCDC also compared Woodburn’s current situation with Wilsonville’s in 1980, when it had large tracts of serviced industrial land close to Interstate 5. Approximately 80 percent of Wilsonville’s current industrial buildings were built after 1980. The LCDC found that Woodburn’s I-5 access and location between Salem and Portland made the intended industrial expansion reasonable.

1000 Friends of Oregon appealed the March 2011 order, and the Court of Appeals again rejected the UGB expansion. It concluded that the LCDC’s analysis was not supported by substantial reason. The court did not address the LCDC’s reasoning for including surplus land purchased for later use within the UGB; rather, it faulted the LCDC for not applying that reasoning to the legal requirements. Strike two.

The importance of well-written findings is an old story in land use and similar administrative proceedings. The findings and the analysis supporting them must be expressed using the specific structure and style required by particular administrative agencies. In less controversial matters, poorly drafted findings sometimes suffice, but in major cases with sophisticated opponents, scrupulous attention to the findings is crucial.

In this instance, the LCDC provided 33 single-spaced pages of analysis, yet the court was unable to see the reasoning that led the LCDC from the facts to the conclusion that the UGB expansion complied with state law.

There is also an elephant in the room. 1000 Friends of Oregon asserts that the city is wrongfully expanding toward high-value farmland west of I-5 and should grow toward less valuable land on the east side of the freeway. The Court of Appeals has yet to respond to that assertion.

This case contrasts with a March 2013 Washington Supreme Court decision affirming Camas’ annexation of a 440-acre urban growth area, mostly for employment land. Camas and Woodburn have many similarities, including size. Camas proposed the expansion in 2005 in its Growth Management Act (GMA) update, which is akin to Oregon’s periodic review. Washington governments must also perform rigorous research, weigh numerous competing land use goals, adopt findings explaining their decisions, and withstand administrative and legal appeals – as occurred with Camas.

The difference is that Washington’s local governments can evaluate natural resource and employment land uses on an equal footing under the so-called “WAC Factors” and are not restricted by state laws that proscribe where and when different types of economic development can occur. Washington also allows master planning of major industrial development that requires a parcel of land larger than available urban parcels. The Washington Legislature recognized in the GMA that the long-term economic development objectives might necessitate flexibility.

Mackenzie, the Portland Business Alliance, the Port of Portland, Business Oregon, NAIOP and Metro recently completed a study analyzing the supply of employment-based lands in the region. The conclusion of the study is dire. There simply is not enough available dirt, and this hurts the region in business recruitment efforts.

It may be time for Oregon to adopt some of the tools employed in Washington to combat the dearth of available employment lands. Otherwise, places like Woodburn that are trying to grow jobs may face strike three.

James Howsley is a Jordan Ramis PC shareholder and a member of its Dirt Law practice group. He focuses on land use and real estate. Contact him at 360-567-3913 or at jamie.howsley@jordanramis.com.

Joseph Schaefer is a land use planner and a paralegal with Jordan Ramis PC. He assists the firm’s attorneys with land use, real estate and environmental development matters. Contact him at 360-567-3919 or at joseph.schaefer@jordanramis.com.

The post OP-ED: Strike two for Woodburn in UGB expansion bid appeared first on Daily Journal of Commerce.