UGB 101: Everything you wanted to know about the urban growth boundary, but were afraid to ask
Three years ago, the Metro Council took a look around greater Portland and saw two things: Thousands of acres of vacant, developable land, and thousands of units of apartments under construction in Portland.
That look, combined with an analysis by experts and computers, showed that the region had enough land within its urban growth boundary to handle 20 years of growth.
The council agreed with the demographers and experts. But it also handed out a caveat: Metro would again look at how greater Portland is growing in 2018, three years earlier than required, just to make sure the apartment boom was a long-term trend, not just a short-term bubble.
Well, 2018 is here, and Portland's skyline is still dotted with cranes lifting beams onto six-story buildings. In Beaverton, Hillsboro, Happy Valley and Lents, apartments are filling in business districts.
What does that mean for this year's urban growth review? Here's a look at what goes in to this year's look at the region's growth plan.
What's the urban growth boundary?
It's where the city ends and the farms and forests begin. Every Oregon city has one. But the 24 cities in the Portland region share one common UGB, managed by the regional government, Metro.
Why does Portland have one?
Oregonians have always been a little skittish about growth. In the 1970s, as an effort to curb the sprawl that was so typical of western cities, Oregon established a land use law that limited development outside of established communities. That way, growth would be concentrated in existing areas, and farms, forests and deserts would be protected from sprawl.
How does it work?
Metro is responsible for ensuring that there's enough land in the UGB for 20 years of growth— even if the UGB wasn't expanded, we wouldn't run out of room for two decades.
Inside of an urban growth boundary, cities around Oregon can plan what they want their communities to look like. They can then expand their UGB if they can show state regulators that they need more developable land. State regulators then look to see that cities followed the state's rules and goals in managing their growth, ranging from addressing people's housing needs to using existing land efficiently, to adequate citizen engagement, to choosing land with minimal impacts to farms and forests.
There's one exception to every-city-has-a-UGB rule: In greater Portland, Metro manages the shared urban growth boundary for the 24 cities in the area, from Troutdale in the east, to Wilsonville in the south, to Forest Grove in the west.
Metro is responsible for ensuring that there's enough land in the UGB for 20 years of growth – even if the UGB wasn't expanded, we wouldn't run out of room for two decades. That's where demographers, developers, economists and land conservation advocates discuss what we can expect growth to look like, where future residents will want to live, and how efficient greater Portland is with the growth already in its UGB.
How can we handle our growth and limit our sprawl?
The real key is making the most of existing land. There might be good reasons why nobody wants to build on that vacant lot down the street from you — but on the whole, it's still probably cheaper for taxpayers to build on that lot instead of connecting a new sewer pipe or highway to housing on the edges of town. The urban growth boundary is a way to keep the costs of those pipes and roads in check.
At the same time, the UGB does, periodically, need to be expanded. It's up to Metro, with the blessing of state regulators, to ensure that the expansions are meeting the region's needs.
Doesn't the UGB cause density?
Oregon land use law favors places that have a variety of development types — apartments, condos and single-family homes, office buildings big and small, large factories and small manufacturers.
The fact is, UGB or not, any city's going to have a healthy share of multifamily housing. But Oregonians familiar with other parts of the country, particularly the Sun Belt, know apartments in other cities tend to wind up nestled on six-lane boulevards on the edges of town, surrounded by parking lots. In greater Portland, the focus is encouraging that multifamily development in existing business districts, where people can walk to get to what they need and support small businesses.
There's still plenty of room in the urban growth boundary for single-family homes, they just don't all get clustered on the edge, plowing over farms and forcing taxpayers to pay for expensive new pipes and roads.
If a city plans exclusively for single-family homes on one-acre lots for growth, that plan is likely to be rejected by LCDC, the state regulators. The law would likely require that city to instead offer a variety of housing options for people.
Does the UGB cause rents and house prices to go up?
No matter where you are in the country, new housing is expensive. The average new American house costs more than $400,000, according to the National Home Builders Association. Rents in Portland aren't that different from Austin, Denver or Atlanta. There's a combination of factors at play: Housing construction almost totally stalled during the Great Recession, but population growth didn't. Once the recovery began, the rush to build new housing caused the prices on everything from labor to drywall to go up.
In greater Portland, one driver of rising housing costs are "system development charges" — fees that builders pay to help support construction of the pipes, roads, parks and schools that are required for urban living. Taxpayers here have said those bills should be picked up by people buying new housing, not the public at large.
So where a new sewer line in, say, Phoenix, can be paid for by a combination of a small sales tax and small systems charge, here, all of those charges are put back on the developer, and ultimately, home buyer or renter.
Certainly, the urban growth boundary does cause land values to go up a bit. But compared to the totality of home prices, the difference is minimal: For a 5,000 square foot lot, the difference between land selling for $100,000 per acre and $200,000 per acre is about $11,500. When you're talking about $450,000 houses — an $11,500 increase in land price is not causing affordability issues.
I heard that Metro has expanded the UGB dozens of times. What's the point of having a boundary if it can be expanded indefinitely?
The UGB is meant to make the region think about growth, not to stop it completely. By encouraging developers to think about areas already in the UGB but available for development, it slows the rate that farms are converted to housing and prevents leap-frog developments.
Is there a limit to how far the UGB can expand?
Well, the Pacific Ocean makes a good buffer. And, at 60 miles away, that's closer than the most distant suburbs of Los Angeles, San Francisco, Seattle or Phoenix are to their downtowns.
In theory, the UGB could expand in perpetuity, but the reality is that for the next 50 years, the UGB is unlikely to expand beyond the 23,000 or so acres of urban reserves around greater Portland.
Can the UGB expand because one of the region's 24 cities is growing particularly quickly?
It can, but only under certain circumstances — primarily, that the city must show that it has a plan to support new development on newly urbanized land, and that the region as a whole needs more acreage for development. More on that below.
The Metro process
What's the urban growth report?
Every six years, Metro has to put together a report on growth in greater Portland — how much we've had, how much we expect, where people are living, and how much land there is for future development. It's a complex, peer-reviewed snapshot of growth in the metro area, aimed primarily at calculating how much land is needed for 20 years of future growth.
The last urban growth report was done in 2015, and was heavily informed by the budding surge in apartment construction in greater Portland. It found that the region easily had enough land to accommodate 20 more years of growth.
Suburban leaders and developers were somewhat skeptical of the apartment boom, and asked Metro to revisit the UGB in 2018, three years earlier than usual. The Metro Council agreed to do that, and here we are.
The apartment boom hasn't stalled, but it's clear that home construction hasn't kept pace with growth. That probably isn't due to a land shortage, but it's still weighing heavily on the minds of leaders across the region as they look at the UGB next year.
Bylined articles by Metro writers do not necessarily represent the opinions of Metro or the Metro Council.