OREGON LIVE The Oregonian
Opinion: Big ideas – grounded in Oregon values and innovation – can guide our growth
Oregon’s innovative land-use system has helped conserve farm and forest lands while preventing sprawl, the authors write. The state should resist pressure to undo parts of the system.
Guest Columnist | The Oregonian
Megan Horst and Gil Kelley
Horst is affiliate professor of urban studies and planning at Portland State University. Kelley is an urban and strategic planning consultant and a former planning director for Portland. They are contributing authors to OSU Press’ “Toward Oregon 2050: Planning a better future.”
By the year 2050, Oregon may gain 1 million additional residents. A greater percentage of those residents will be 65 years or older. Households will continue to decline in size. More and more young people will be people of color.
That future lends urgency to the problems Oregon currently faces. How will Oregon accommodate that growth, when it already faces a severe housing shortage? How will Oregonians navigate the effects of climate change, including extreme heat, flooding and wildfire? How will we guide an evolving economy? And crucially, how can we include Oregon’s young people in shaping the policies that will affect them?
We can do so by drawing on Oregon’s history of innovation as we look for big ideas. Oregon has established its bona fides as an innovator on a range of fronts, from the Beach and Bottle Bills, to vote by mail and death with dignity. Nowhere is that as apparent as it is in our statewide land-use planning system – one of Oregon’s most enduring inventions. Established in 1973, our land-use system has helped conserve farm and forest lands, support economic diversity, protect critical habitat and scenic areas, and foster compact, walkable and vibrant cities and towns. Unlike many other states, we have curbed endless suburban sprawl and are better for it.
But amid a rise in homelessness and pressure from the business community, there have been efforts to undo parts of the system. Some suggest that the state’s land-use program no longer addresses the most pressing current needs, particularly regarding housing production and job creation. We assert just the opposite: Reinforcing and reinvigorating the state’s planning goals is the best way for Oregon to stay true to its values and unique identity into the 21st century.
Our reasoning is clear: maintaining compact, walkable cities and towns and concentrating growth within existing boundaries are critical components of addressing climate change. It is also the best way to ensure an adequate supply of affordable housing, where infrastructure already exists and jobs, schools and local services are nearby. Expanding urban growth boundaries rarely, if ever, results in “whole communities” with affordable housing and walkable access to schools, community centers and commercial services. A recent expansion in south Hillsboro, for example, resulted primarily in the construction of large, single-family homes and provided few rentals or homes priced at affordable levels. The cost of such infrastructure is simply too expensive, forcing residents to travel by car to satisfy daily needs.
Our existing cities and towns will be stronger if we spur new housing and economic development in them, rather than outside of them. In the Portland metro region alone, Metro’s 2024 Urban Growth Report estimates that, including vacant, redevelopable and office-to-residential conversion sites, there is capacity for nearly 200,000 additional homes within the existing Urban Growth Boundary. Outside of the Portland metro, other cities and towns from Eugene to Ontario also have available land within existing boundaries. Altogether, there is more than enough capacity inside existing UGBs statewide for the half million new housing units needed by 2045.
So, how do we get started? Here are three bold actions that could be initiated in this coming legislative session:
- Focus development in existing cities and towns by declaring a 10-year moratorium on Urban Growth Boundary expansion – with very limited exceptions – and combine this with building on Gov. Tina Kotek’s efforts to enhance infrastructure funding and direct subsidies for affordable housing. Intentional and creative public-private collaboration is necessary to build complete neighborhoods affordable to most Oregonians.
- Initiate a forward-looking state economic development strategy that reduces the focus on new land and instead uses existing industrial land and infrastructure more efficiently. Build upon existing economic strengths, such as university research.
- Add a new goal about climate action to the state’s land-use planning laws, requiring cities and counties to address climate resilience and greenhouse gas emission reductions in their comprehensive plans. (California and Washington already do.)
Even with those changes, Oregon must think bigger. That could be adopting a land-value tax on vacant property to incentivize owners to develop it. Or developing a state-supported system that promotes shared ownership of housing. Or even investing in high-speed rail that connects Eugene and Portland to Seattle and Vancouver, B.C., linking universities and job centers to boost employment opportunities across this emerging Cascadia mega-region.
______________________________________________
Comment:
Horst and Kelley are right to resist urban growth boundary expansion and focus development in existing cities and towns.
We at Common Ground OR/WA have been saying repeatedly that building more single family homes in exurbia is not going to provide the volume and affordability that meets the current demand market. Moreover, contributing to urban sprawl by extending the UGB is a land and energy-consuming development pattern that molds car-centric lifestyles. Oregon’s and Washington’s urban growth management policies encourage densification, walkability and transit-oriented development to improve affordability and sustainability.
Gov. Tina Kotek’s Housing Production Advisory Council suggested a massive tax increase could be necessary to achieve her housing goal of 36,000 new homes a year, with recommendations including tax increases on income, sales, payroll, fuel and property. Creating this many housing units a year through 2040 is a tall order, but there is another path to the desired outcome if you recognize that land values are rising faster than building values.
Portland already has more than enough capacity under current zoning to accommodate projected household growth, according to a draft of the 2045 Housing Needs Analysis.
The problem is that much of the developable land is locked up in landholdings. The big idea: free up the existing land supply inside the UGB by using tax incentives, not tax increases. A land value tax would increase the tax rate on land and lower the rate on improvements. This produces a downward pressure on land prices of vacant & underutilized lots, especially in central city areas where location values are high.
A high tax on land would make it expensive to hold potentially available sites. A low tax on building value would reward private investment in new buildings with lower taxes compared to the current property tax system crippled by Measures 5 and 50.
Places that have adopted LVT have experienced significant in-fill and redevelopment effects, along with other benefits. Harrisburg, Pennsylvania, once one of the most distressed cities in the nation, adopted this approach in 1975. Subsequently, 5,200 vacant properties were redeveloped, and over 5,000 housing units have been newly constructed or rehabilitated.
Repealing M5 & 50 and replacing them with a land value tax based on real market assessments reverses the current system’s perverse incentives. This market-based reform could help accomplish the governor’s housing production goals without raising revenues using the kind of taxes that are a drag on the economy.
Tom Gihring, research director
Common Ground OR-WA
