Oregon Urban Growth Boundary News

[subterranean]

Oregon is so green because it's been literally illegal to build housing outside cities since the 1970s. That could be changing

A severe lack of affordable housing has prompted Oregon lawmakers to consider chipping away at a 1970s law that made the state a national leader in leveraging land use policy to prevent suburban sprawl and conserve nature and agriculture.

Source: https://fortune.com/2024/02/25/orego...p-malls-1970s/

[PhillyPDX]

Originally Posted by subterranean

Source: https://fortune.com/2024/02/25/orego...p-malls-1970s/

It's such an interesting concept that people on both sides seem readily able to skew numbers to prove it does/does not affect housing prices. Intuitively it seems restricting supply would greatly affect prices.

We can argue the positive effects, say Portland surburbs are reasonably dense with less sprawl. And secondary effects like climate change fight . But when it comes to affordable housing, and for those that need to buy a house, it's more about direct home prices. A quick search for Portland and Houston for moderate priced family homes (2000 SF, $300-600k) in a similar area yields 83 homes for sale in Portland and 4,423 home in Houston (3x population, 53x the affordable-ish homes). Sure, I wouldn't want to live in Houston either, but direct sale price DOES matter to people in that price range (I'm privileged to be able to afford Portland by choice, a lifestyle tax really, but many don't have that option). So why is Texas so much cheaper? It's not like developers in Portland are somehow greedier than in Texas. Given this, I just have a hard time believing the political constrained UGB has no effect on housing prices given how effective it seems to be in thwarting new housing development. Is there a middle ground that keeps Portland from being Houston but also allows for more affordable home construction w/o relying on direct-subsidized housing construction (funding or price controls)?

[urbanlife]

Originally Posted by PhillyPDX

It's such an interesting concept that people on both sides seem readily able to skew numbers to prove it does/does not affect housing prices. Intuitively it seems restricting supply would greatly affect prices.

We can argue the positive effects, say Portland surburbs are reasonably dense with less sprawl. And secondary effects like climate change fight . But when it comes to affordable housing, and for those that need to buy a house, it's more about direct home prices. A quick search for Portland and Houston for moderate priced family homes (2000 SF, $300-600k) in a similar area yields 83 homes for sale in Portland and 4,423 home in Houston (3x population, 53x the affordable-ish homes). Sure, I wouldn't want to live in Houston either, but direct sale price DOES matter to people in that price range (I'm privileged to be able to afford Portland by choice, a lifestyle tax really, but many don't have that option). So why is Texas so much cheaper? It's not like developers in Portland are somehow greedier than in Texas. Given this, I just have a hard time believing the political constrained UGB has no effect on housing prices given how effective it seems to be in thwarting new housing development. Is there a middle ground that keeps Portland from being Houston but also allows for more affordable home construction w/o relying on direct-subsidized housing construction (funding or price controls)?

The problem with this concept that it causes housing prices to up is this same concept that people need to buy a single family house. Portland's UGB is massive for a metro, we shouldn't need to expand it any further than it already is because we have more than enough room to building as many residential units in the city that is needed. If we move away from this concept that everyone needs a single family house with a yard, then we might actually see the type of growth that we should be seeing throughout the metro that would help stabilize the housing market and create more affordable housing options.

[PhillyPDX]

Originally Posted by urbanlife

The problem with this concept that it causes housing prices to up is this same concept that people need to buy a single family house. Portland's UGB is massive for a metro, we shouldn't need to expand it any further than it already is because we have more than enough room to building as many residential units in the city that is needed. If we move away from this concept that everyone needs a single family house with a yard, then we might actually see the type of growth that we should be seeing throughout the metro that would help stabilize the housing market and create more affordable housing options.

I mean, maybe, but then why don’t we see more affordable housing being built here, relative to other cheaper and rapidly growing metros?

And I don’t want to get cultural preachy for what type of home people want (single family vs multi family). People can and do leave to other areas to be able to afford those single family homes. I personally know a few people that loved Portland metro but moved to Texas because it was just too expensive here for moderate incomes, they had a hard time making ends meet here and are doing much better there, financially speaking.

[eric cantona]

Originally Posted by PhillyPDX

I mean, maybe, but then why don’t we see more affordable housing being built here, relative to other cheaper and rapidly growing metros?

And I don’t want to get cultural preachy for what type of home people want (single family vs multi family). People can and do leave to other areas to be able to afford those single family homes. I personally know a few people that loved Portland metro but moved to Texas because it was just too expensive here for moderate incomes, they had a hard time making ends meet here and are doing much better there, financially speaking.

The biggest issue with the UGB is not having enough land to build housing on, there is plenty. What is an issue, though, is land that is shovel ready or has concrete plans to extend necessary infrastructure to allow for building housing. Metro is in process of codifying the ability to swap UGB expansion areas with acreage that has actual funding for water/sewer/electricity/etc. to service the new housing.

[PhillyPDX]

Originally Posted by eric cantona

The biggest issue with the UGB is not having enough land to build housing on, there is plenty. What is an issue, though, is land that is shovel ready or has concrete plans to extend necessary infrastructure to allow for building housing. Metro is in process of codifying the ability to swap UGB expansion areas with acreage that has actual funding for water/sewer/electricity/etc. to service the new housing.

That makes sense. A little surprising that wasn’t part of the UGB process already.

[downtownpdx]

Just read about how Minneapolis is seeing very slow housing price growth relative to nearby areas, and they attribute some of that to its banning of single family housing zoning a few years ago. We’ve also recently banned SFH zoning (I’m forgetting if it’s statewide, or just Portland..?) so perhaps allowing multi unit dwellings in these areas will help relieve pressure in the coming years. Minneapolis might be seeing very slow population growth post covid relative to its neighbors also, so this SFH policy probably isn’t solely responsible for the price relief.

Portland has eliminated parking requirements, encourages density… I’d rather not see the ugb expanded unless all other options have been explored — maybe we need to relax permitting rules, speed up infrastructure development as cantona mentioned so housing can actually happen, and relax affordable housing mandates so instead of requiring it we just offer generous tax breaks and height allowances..?

[urbanlife]

Originally Posted by PhillyPDX

I mean, maybe, but then why don’t we see more affordable housing being built here, relative to other cheaper and rapidly growing metros?

And I don’t want to get cultural preachy for what type of home people want (single family vs multi family). People can and do leave to other areas to be able to afford those single family homes. I personally know a few people that loved Portland metro but moved to Texas because it was just too expensive here for moderate incomes, they had a hard time making ends meet here and are doing much better there, financially speaking.

If we just wait for private developers to build affordable housing, we will be waiting forever because they aren't in the business to not make the most money they can make.

Depends on where they moved to in Texas, but their is a lot of hidden taxes that people don't realize exist in Texas. I know this because my parents moved from Washington to Texas and are still spending about the same in taxes and fees, so it was a wash for them.

Originally Posted by downtownpdx

Just read about how Minneapolis is seeing very slow housing price growth relative to nearby areas, and they attribute some of that to its banning of single family housing zoning a few years ago. We’ve also recently banned SFH zoning (I’m forgetting if it’s statewide, or just Portland..?) so perhaps allowing multi unit dwellings in these areas will help relieve pressure in the coming years. Minneapolis might be seeing very slow population growth post covid relative to its neighbors also, so this SFH policy probably isn’t solely responsible for the price relief.

Portland has eliminated parking requirements, encourages density… I’d rather not see the ugb expanded unless all other options have been explored — maybe we need to relax permitting rules, speed up infrastructure development as cantona mentioned so housing can actually happen, and relax affordable housing mandates so instead of requiring it we just offer generous tax breaks and height allowances..?

Oregon banned SFH Only zoning for any city above a certain population, which just excludes the smallest towns in Oregon.

Interesting you mention Minneapolis because looking it up when it comes to land size for the metro, Portland's metro is about the same size as the Minneapolis metro.

[PhillyPDX]

Originally Posted by urbanlife

If we just wait for private developers to build affordable housing, we will be waiting forever because they aren't in the business to not make the most money they can make.

Depends on where they moved to in Texas, but their is a lot of hidden taxes that people don't realize exist in Texas. I know this because my parents moved from Washington to Texas and are still spending about the same in taxes and fees, so it was a wash for them.



Oregon banned SFH Only zoning for any city above a certain population, which just excludes the smallest towns in Oregon.

Interesting you mention Minneapolis because looking it up when it comes to land size for the metro, Portland's metro is about the same size as the Minneapolis metro.

Yes, but about the comment regarding "wait for forever" because in these cheaper, rapidly growing sunbelt areas there IS affordable development happening. So what causes developers to build more affordable homes there but not here? That would have to imply either the costs are different there (land costs, permitting, taxes, construction inputs, etc) or somehow our developers are just more much more greedy, which is obviously not true. So then it must be the former, and implies the risk/reward for profitable affordable housing development is harder to finance here compared to the sunbelt, so fewer developers do it here (if the profits are there developers would follow). Seems like it shouldn't be that hard to figure out what the root causes are. There are only so many variables when it comes to the business of development.

So we end up with people pushing UGB expansion or SFH based on principle or bias, and I'm not sure anyone is actually objectively trying to figure out what the reasons are.

[subterranean]

Originally Posted by PhillyPDX

Yes, but about the comment regarding "wait for forever" because in these cheaper, rapidly growing sunbelt areas there IS affordable development happening. So what causes developers to build more affordable homes there but not here? That would have to imply either the costs are different there (land costs, permitting, taxes, construction inputs, etc) or somehow our developers are just more much more greedy, which is obviously not true. So then it must be the former, and implies the risk/reward for profitable affordable housing development is harder to finance here compared to the sunbelt, so fewer developers do it here (if the profits are there developers would follow). Seems like it shouldn't be that hard to figure out what the root causes are. There are only so many variables when it comes to the business of development.

So we end up with people pushing UGB expansion or SFH based on principle or bias, and I'm not sure anyone is actually objectively trying to figure out what the reasons are.

It's most certainly the land costs. Land prices in Metro Portland are astronomical. Only the largest companies can afford to purchase and develop areas brought into the UGB, and developers often have options on that land a decade or more before it's brought in.

System Development Charges (SDCs) also play a big role in housing costs. Unlike some other states that make SDCs illegal, Oregon charges to each unit for infrastructure. While as a municipal planner I think this is just good fiscal policy, it does add a lot to the cost. In Washington County, for example, those costs are as follows for a single family unit in 2024:

Transportation Development Tax (TDT): $10,599
THPRD (Parks): $13,833 average not counting annexation fee
School District CET: $2,808 for an 1800 sq. ft. house
TVWD (Water): $8,389 not counting annexation fee
Clean Water Services (Sewer): $7,484 (connection permit & SDC) not counting annexation fee

An annexation application combining all service district annexations into one application package is about $12-15k for an entire development, and a change of zoning is about $25k.

Not counting the annexation or plan amendment, or other entitlements, you're looking at a little over $43,000 per unit just in SDCs. I would venture a guess that it's more like $50,000 per unit for smaller developments once all permits, fees and SDCs are processed. Larger developments can take advantage of economical economies of scale, spreading some of the normal permit costs and fees out across all the units.

This is why we rarely see affordable for-sale housing at the fringe, unlike many states that see a precipitous decline in prices the farther from their city center, even when the houses are larger. You can easily find houses in exurban Detroit that are basically mansions with huge yards for the prices of houses 1/3 the size on 3500 sq. ft. lots here. I imagine it's similar in Texas.

Concept plans for new land brought into the UGB include high density areas that invariably become for-rent apartments. Cheaper for-sale units are usually town homes but they are still expensive compared to states with fewer development regulations and fees.

[PhillyPDX]

Originally Posted by subterranean

It's most certainly the land costs. Land prices in Metro Portland are astronomical. Only the largest companies can afford to purchase and develop areas brought into the UGB, and developers often have options on that land a decade or more before it's brought in.

System Development Charges (SDCs) also play a big role in housing costs. Unlike some other states that make SDCs illegal, Oregon charges to each unit for infrastructure. While as a municipal planner I think this is just good fiscal policy, it does add a lot to the cost. In Washington County, for example, those costs are as follows for a single family unit in 2024:

Transportation Development Tax (TDT): $10,599
THPRD (Parks): $13,833 average not counting annexation fee
School District CET: $2,808 for an 1800 sq. ft. house
TVWD (Water): $8,389 not counting annexation fee
Clean Water Services (Sewer): $7,484 (connection permit & SDC) not counting annexation fee

An annexation application combining all service district annexations into one application package is about $12-15k for an entire development, and a change of zoning is about $25k.

Not counting the annexation or plan amendment, or other entitlements, you're looking at a little over $43,000 per unit just in SDCs. I would venture a guess that it's more like $50,000 per unit for smaller developments once all permits, fees and SDCs are processed. Larger developments can take advantage of economical economies of scale, spreading some of the normal permit costs and fees out across all the units.

This is why we rarely see affordable for-sale housing at the fringe, unlike many states that see a precipitous decline in prices the farther from their city center, even when the houses are larger. You can easily find houses in exurban Detroit that are basically mansions with huge yards for the prices of houses 1/3 the size on 3500 sq. ft. lots here. I imagine it's similar in Texas.

Concept plans for new land brought into the UGB include high density areas that invariably become for-rent apartments. Cheaper for-sale units are usually town homes but they are still expensive compared to states with fewer development regulations and fees.

Thanks for the detailed analysis.