Opinion: The missing ingredient for solving Oregon’s housing crisis – more land
Gerard C.S. Mildner Special to The Oregonian/OregonLiveMildner is a professor emeritus in finance and real estate at Portland State University. He lives in Beaverton.A recent op-ed offered some ideas on how the state should accommodate the growth that Oregon is expected to see by 2050, (“Opinion: Big ideas – grounded in Oregon values and innovation – can guide our growth,” Feb, 5). Urban planners Megan Horst and Gil Kelley made the argument that Oregon should adopt a 10-year moratorium on expansion of any urban growth boundary – the perimeter that divides cities’ developable land from reserved acreage. They argue Oregon should promote higher density residential development in cities and neighborhoods to utilize existing infrastructure and fight climate change. This strategy, however, runs contrary to the principles of Oregon’s land use planning system, ignores recent data and ensures that housing costs will continue to rise.Oregon’s land use planning system was designed around the premise that urban growth boundaries would be flexible to accommodate future population growth. Unfortunately, that central idea has become a triggering issue for Portland’s environmental community, and urban planners have resisted efforts to expand the boundaries, even as housing production has failed to generate anywhere close to the number of units needed to match population growth.In the last 45 years, for example, the acreage inside in the Metro Portland urban growth boundary has expanded 15% while the region’s population inside the boundary has grown nearly 80%. And roughly 40% of all acreage brought into the boundary for development was in Damascus, whose steep geography is uniquely ill-suited for housing development and has been left mostly undeveloped.As a result, we have lived for decades with essentially the same policies that Horst and Kelley are advocating for the next 10 years, resulting in enormous deficits of housing units and much higher housing costs per square foot basis. At the same time, they dismiss the success stories of the modest expansions that Metro did allow. The Washington County developments of Bethany, River Terrace and Reed’s Crossing and Clackamas County’s Villebois expansion have produced needed housing, including single-family homes, townhomes and apartment buildings. Unfortunately, master-planned communities like these need large, flat tracts which no longer exist within the current urban growth boundary. Critics of these expansions argue that developments in these expansion areas are priced beyond the means of low-income households and that developers should be forced to build subsidized housing. However, that argument ignores the wider benefits of new housing construction – including market-rate units.Occupants of these new homes will move out of more modest, older homes, making them available to lower-income households. And migrants from California and elsewhere can choose new master-planned communities, rather than bidding up the price of older housing in existing neighborhoods. Affordable housing gets created in an indirect way with new housing construction, at minimal cost to local government.Metro officials argue that we should increase the density of existing neighborhoods to provide the extra housing that we need. That argument ignores that our lowest cost housing remains two-story wood construction, such as being built in recent boundary expansion areas, and that single-family homes are still deeply popular. Relying upon 4-story or greater construction drives up housing costs by 50% on a square foot basis because of the additional cost of concrete and steel over wood. That’s fine for niche consumers wanting a high-density setting, but relying upon expensive housing as the core of our future supply will insure that housing costs will continue to rise.Instead of a 10-year moratorium on boundary expansions, we need to bring Metro’s 17,000 acres of “urban reserves” into the perimeter for allowable development. That would be a modest 7% expansion in acreage within the urban growth boundary, but the added supply would help tamp down the cost of land – a significant factor in housing costs.The state and the region face significant challenges if we are going to meet Gov. Tina Kotek’s stated goal of producing 36,000 housing units per year. Yes, there’s a role for infill housing and accessory dwelling units, but that will provide hundreds of new housing units per year, not the thousands of units that we need.Yes, we need to reform a host of anti-development policies in the city and state including rent control, inclusionary zoning, design review and permitting delays, but it’s essential that we allow more land inside our existing urban growth boundaries. And we need to assist communities that will be hosting this new housing in the urban reserves with grants for new arterial roads and sewers.If we insist on sticking with our starvation land diet, housing costs in the region and the state will remain high and our region won’t attract new business. Our children will need to move elsewhere to find good employment. Many already are doing so.Share your opinion Submit your essay of 600-700 words on a highly topical issue or a theme of particular relevance to the Pacific Northwest, Oregon and the Portland area to commentary@oregonian.com. No attachments, please. Please include your email and phone number for verification.
Resistance to expanding the urban growth boundary has contributed to the region's severe deficit of housing, writes Gerald Mildner, a PSU emeritus professor of finance and real estate. The region should break from its starvation land diet, add acreage for development and help bring housing costs down.
Gerard C.S. Mildner
Special to The Oregonian/OregonLive
Mildner is a professor emeritus in finance and real estate at Portland State University. He lives in Beaverton.
A recent op-ed offered some ideas on how the state should accommodate the growth that Oregon is expected to see by 2050, (“Opinion: Big ideas – grounded in Oregon values and innovation – can guide our growth,” Feb, 5).
Urban planners Megan Horst and Gil Kelley made the argument that Oregon should adopt a 10-year moratorium on expansion of any urban growth boundary – the perimeter that divides cities’ developable land from reserved acreage. They argue Oregon should promote higher density residential development in cities and neighborhoods to utilize existing infrastructure and fight climate change. This strategy, however, runs contrary to the principles of Oregon’s land use planning system, ignores recent data and ensures that housing costs will continue to rise.
Oregon’s land use planning system was designed around the premise that urban growth boundaries would be flexible to accommodate future population growth. Unfortunately, that central idea has become a triggering issue for Portland’s environmental community, and urban planners have resisted efforts to expand the boundaries, even as housing production has failed to generate anywhere close to the number of units needed to match population growth.
In the last 45 years, for example, the acreage inside in the Metro Portland urban growth boundary has expanded 15% while the region’s population inside the boundary has grown nearly 80%. And roughly 40% of all acreage brought into the boundary for development was in Damascus, whose steep geography is uniquely ill-suited for housing development and has been left mostly undeveloped.
As a result, we have lived for decades with essentially the same policies that Horst and Kelley are advocating for the next 10 years, resulting in enormous deficits of housing units and much higher housing costs per square foot basis. At the same time, they dismiss the success stories of the modest expansions that Metro did allow. The Washington County developments of Bethany, River Terrace and Reed’s Crossing and Clackamas County’s Villebois expansion have produced needed housing, including single-family homes, townhomes and apartment buildings. Unfortunately, master-planned communities like these need large, flat tracts which no longer exist within the current urban growth boundary.
Critics of these expansions argue that developments in these expansion areas are priced beyond the means of low-income households and that developers should be forced to build subsidized housing. However, that argument ignores the wider benefits of new housing construction – including market-rate units.
Occupants of these new homes will move out of more modest, older homes, making them available to lower-income households. And migrants from California and elsewhere can choose new master-planned communities, rather than bidding up the price of older housing in existing neighborhoods. Affordable housing gets created in an indirect way with new housing construction, at minimal cost to local government.
Metro officials argue that we should increase the density of existing neighborhoods to provide the extra housing that we need. That argument ignores that our lowest cost housing remains two-story wood construction, such as being built in recent boundary expansion areas, and that single-family homes are still deeply popular. Relying upon 4-story or greater construction drives up housing costs by 50% on a square foot basis because of the additional cost of concrete and steel over wood. That’s fine for niche consumers wanting a high-density setting, but relying upon expensive housing as the core of our future supply will insure that housing costs will continue to rise.
Instead of a 10-year moratorium on boundary expansions, we need to bring Metro’s 17,000 acres of “urban reserves” into the perimeter for allowable development. That would be a modest 7% expansion in acreage within the urban growth boundary, but the added supply would help tamp down the cost of land – a significant factor in housing costs.
The state and the region face significant challenges if we are going to meet Gov. Tina Kotek’s stated goal of producing 36,000 housing units per year. Yes, there’s a role for infill housing and accessory dwelling units, but that will provide hundreds of new housing units per year, not the thousands of units that we need.
Yes, we need to reform a host of anti-development policies in the city and state including rent control, inclusionary zoning, design review and permitting delays, but it’s essential that we allow more land inside our existing urban growth boundaries. And we need to assist communities that will be hosting this new housing in the urban reserves with grants for new arterial roads and sewers.
If we insist on sticking with our starvation land diet, housing costs in the region and the state will remain high and our region won’t attract new business. Our children will need to move elsewhere to find good employment. Many already are doing so.
Share your opinion
Submit your essay of 600-700 words on a highly topical issue or a theme of particular relevance to the Pacific Northwest, Oregon and the Portland area to commentary@oregonian.com. No attachments, please. Please include your email and phone number for verification.