Oregon's Crucial Urban Growth Boundary Decision

Predictably, homebuilders blame urban growth boundaries for everything from high housing prices to the cost of garbage collection. Visiting reporter William Claiborne of the Washington Post was the last to fall for the homebuilders' deliberate disinformation during a recent visit:

PORTLAND -- For nearly two decades, Portland has proudly presented itself as a visionary model of how to control population sprawl to keep its verdant corner of the Pacific Northwest unspoiled.

While Los Angeles, Phoenix, Denver and other cities overran their boundaries in wild and uncontrolled growth, planners here took the radical step in 1979 of drawing a line around greater Portland and prohibiting any development beyond it.

But the "Great Wall of Portland," long admired by city planners as a model of controlled growth and supported by the environmentally conscious, is developing cracks.

As the supply of available land within the boundary shrinks, home prices are soaring. Traffic is becoming more congested as commuters move farther from their jobs in search of more affordable housing. Parking fees are rising, and public services such as trash collection are growing more costly as a growing population tries to squeeze into a finite space.

Trash collection fees are going up because federal law requires new and expensive landfills designed to avoid polluting ground water supplies, not because Portland is becoming congested. Portland traffic is getting congested because vehicle miles traveled is growing three and four times faster than the population because so many people insist on commuting by car. Government builds more roads to accommodate more traffic and the new roads generate more traffic at rates three and four times the population growth. Other cities on the West Coast without urban growth boundaries have similar traffic congestion problems.

Housing prices are soaring in Oregon cities that have more room in their urban growth boundaries than Portland does. Portland's median-priced house, at $139,900. is the low end of Ashland's housing market despite Ashland's supply of available land and an aggressive policy of reducing restrictions to encourage building within the urban growth boundary.

Ashland's inflated housing prices have more to do with Californians' desire to escape the Golden State than the supply of buildable land. California refugees worked their way up Interstate 5 and are finally reaching Portland in sufficient numbers to drive up real estate prices.

Homebuilders know that 20 percent of Oregon's population earns about 50 percent of Oregon's personal income. Homebuilders know it is most profitable to build "Street of Dreams" houses for this 20 percent. That is why homebuilders are torpedoing a plan by Portland City Commissioner Jim Francesconi and other in the metropolitan area to require "affordable" houses in every new subdivision aimed at encouraging first-time homebuyers. Homebuilders know profit margins in cheaper homes are smaller than in more expensive homes.

Oregon's population grew 50 percent during the 1950s. Homes were cheaper because many post-World War II subdivisions were built on septic tanks without central sewers or treated water supplies. Many streets were substandard. Residents were forced to pay higher property taxes to retrofit sewage treatment and water systems and to repave city streets long after developers were gone.

Oregonians are no longer willing to subsidize the costs of growth through general property taxation as they did in the 1950s, '60s and '70s. Following decades of property tax limitations Oregon's local governments now require up front payment for sewer and water facilities in the form of systems development charges that are passed on in the price of new construction.

The price of land does influence the price of a new house, of course, but there is less here than meets the eye. In 25 years of covering Oregon government I never heard the Portland urban growth boundary called the "Great Wall of Portland." This newly-minted public relations phrase is deliberately designed to demonize the urban growth boundary.

The Portland metropolitan homebuilders are trying to promote their industry at the expense of agriculture, which the urban growth boundary was designed to protect. The boundary has worked well. Gross farm sales in Oregon rose from $675 million in 1972, the year before the Legislature created the Land Conservation and Development Commission, to $3.06 billion in 1995.

Six of Oregon's top 10 agricultural counties are urban counties in the Willamette Valley where urban growth boundaries limit development incompatible with farming -- Marion, Clackamas, Linn, Washington, Yamhill, Lane and Polk. Only four of the top 10 agricultural counties are in Eastern Oregon -- Umatilla, Malheur, Klamath and Morrow -- where there is less urbanizing pressure.

There is no proof that building new houses on agricultural land will lower housing prices. Lower housing prices requires the unlikely stemming of the inexhaustible tide of immigration on the new Oregon Trail -- Interstate 5.

There is ample evidence, however, that building more houses on agricultural land will damage agriculture and food processing -- one of Oregon's largest (and still growing) industries. The complex economic tradeoffs between housing and agriculture deserve more intelligent discussion before the battle of the boundaries deteriorates into the battle of made-to-mock sound-bites like "The Great Wall of Portland."