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Ring Around the City

Bend’s Urban Growth Boundary challenges

Who can forget the late Oregon Governor Tom McCall’s famous 1971 no-growth plea to non-Oregonians: “We want you to visit our State of Excitement often. Come again and again. But for heaven’s sake, don’t move here to live. Or if you do have to move in to live, don’t tell any of your neighbors where you are going.”

Petrified at the prospect of Oregon succumbing to the uncontrolled sprawl that impacted California, McCall was a true land-use pioneer, helping Oregon set the national standard for balance of people and land. One of his landmark legacies is the Urban Growth Boundaries (UGB) system, which McCall convinced the Oregon Legislature in 1973 to adopt, and which was the nation’s first set of statewide land-use planning laws. With a coalition of farmers and environmentalists, McCall persuaded the Legislature that the state’s natural beauty would be lost in a rising tide of urban sprawl.

Helping to prevent the sprawl of Oregon’s densely populated areas is the Urban Growth Boundary, which is simply a line around a city that defines urban land for present and near-future use. According to planning laws, all cities in Oregon are required to have a 20-year supply of land for housing and employment. Residential tracts, shopping malls, and other kinds of urban development are not allowed to extend past the UGB, while agricultural lands and open space outside are preserved.

Not surprisingly, UGB rules have not been without controversy. At a recent presentation before the City Club, Bend attorney and UGB committee member Sharon Stone said, “there are two things Oregonians hate: sprawl and density.” But not everybody agrees with that sentiment, says Anne Aurand, Manager of Bend Community Relations. Once the available urban land runs out, it turns out Oregonians equally hate poor housing availability and skyrocketing rent. “There’s an inherent, political, ideological and passionate conflict in this process,” she says.

Critics argue that the UGB infringes on private property rights and may create higher housing prices through land scarcity. One look at Bend’s strong real estate recovery reveals that the city is facing a serious shortage of affordable housing, particularly in the rental market. The Central Oregon Rental Owners Association, for example, reports demand for rentals is colliding with a vacancy rate of less than 1 percent, while rent prices in some areas, have increased from 5 to 10 percent every year since 2012.

Moreover, the UGB boundary has created a philosophical dividing line between developers and conservationists as each group seeks to advance its arguments on how the city should plan its future. Today, after three decades of steady, often robust development, Bend faces what many on both sides of the “growth” issue consider its most critical challenge ever to future planning—to grow or not to grow, and how.

Other than a few modest additions to the UGB over the years, including 500 acres for Juniper Ridge, the last major expansion was back in 1981 when Bend’s population was just over 17,000. More than 30 years later, the population has mushroomed well north of 80,000, with bright prospects for a four-year Oregon State University campus, among many new promising growth initiatives. This clearly presented the City with a new sense of urgency for exploring the need to expand the UGB.

Following several years of studies, public hearings and $4 million in public funding, Bend City Council responded in 2009 by approving a proposal to expand the city’s UGB by more than 40 percent, or 8,500 acres, to accommodate a projected population increase of 35,000-plus over the next 20 years. But any UGB expansion has to be approved by the Department of Land Conservation and Development (one of the agencies created in 1973 thanks to Tom McCall’s land use planning laws), as well as the Deschutes County Board of County Commissioners and the City. “Our request for more land was strictly based on necessity, nothing else,” said Brian Shetterly, Bend’s former long-range planning manager, now retired.

What followed, however, left many in City Hall in utter shock. Despite an 80 percent approval-rate history for UGB expansion proposals throughout the state, the DLCD essentially rejected Bend’s proposal, remanding it back to the City for further work. While “further work” included a number of land-use planning requirements that Bend’s proposal failed to satisfy, such as creating a viable sewer plan and reducing vehicle miles traveled in Bend by five percent, the key stumbling blocks were that the City of Bend was asking for too much land and not better utilizing existing land and density levels within the boundary. The DLCD maintained that there were still-undeveloped parcels of land within the current UGB that were suitable for development. City Council member Victor Chudowsky, who also serves as the City’s UGB Steering Committee chairman, explained, “Our attitude then was that we were the fastest growing city in the state and needed more land to handle the growth. Instead, the DLCD said we needed to show better use of our current land-use and density levels.”

The message was clear, yet Chudowsky and other civic leaders lament the lack of urgency that pervaded the remand process. Other than a failed appeal in 2010, essentially nothing was done for nearly four years to seriously mount a formal remand effort. In early 2013, the City Council decided that all seven councilors and two planning commissioners would form the Remand Task Force to address the issues raised in the order. Additionally, three citizen Technical Advisory Committees were formed and are now forwarding recommendations to the task force on residential lands, employment lands and the actual city growth boundary. “We have purposely made these committees as large as possible with upwards of 20 people on each…many with skin in the game,” Chudowsky says. “More importantly, we have a DLCD staffer in the room, allowing us to partner with the state to assure we meet its requirements,” he adds.

Meanwhile, scarce land for housing along with Bend’s economic and real estate revivals have created what Chudowsky describes as a housing affordability crisis in Bend. “We essentially wasted four years after the initial 2010 remand order. Now we face a huge mismatch in median income and average housing prices, particularly in the multiple-family sector,” he says. Chudowsky cited a study, based on 2012 data, that showed Bend’s median income level of $66,000 could afford to buy a $200,000 average-priced home. Today, five years later, median income has remained relatively flat while the median-priced home has rocketed to well over $320,000, exacerbating the affordability gap. “There’s nothing affordable in town for working people,” he says.

Interestingly, the housing affordability issue has helped bridge the ideological gap that typically separates developers and conservationists. “This project is all about change,” says Brian Rankin, who succeeded Shetterly as the City’s long-term planning manager and is the UGB project manager. “Very few people move to Bend for the job or because they have to. They move here because they love this place, which leads to a natural tendency to lock all of its qualities in a box and not change anything,” he adds.

But Rankin maintains we’re at that critical place in time when Bend is evolving as a city, and that everyone now has a stake in making sure we protect those qualities. He’s encouraged by what he calls a sense of “civic ecology” that permeates the steering committee and three technical advisory committees. “Gone is the acrimony that typically divides developers and conservationists on land-use practices. In its place is a new spirit of cooperation toward shared goals and building relationships,” he adds.

Chudowsky talked about the consensus-building going on within the Residential Lands Technical Advisory Committee. Even with several representatives of traditionally “no growth” groups on the committee, by a vote of 14 to 2, the group recommended to the Task Force that Bend’s current residential to multiple-family new housing ratio of 71% to 29% be modified to 55% to 45% in answer to the projected 35,000 increase in population between now and 2028.

So what do Bendites want out of the UGB expansion? A city survey late last year of approximately 1,500 citizens about UGB revealed that residents are most interested in seeing the expansion protect quality open spaces around the city. No surprise there, given the environmentally oriented demographics of Central Oregon.

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Looking ahead, there’s also concern that the city will run out of buildable residential and commercial land before the remand process is resolved, only worsening the already serious lack of affordable housing. However, Rankin believes there are some other things the City Council can do in the interim to address density and affordability issues, such as making it less burdensome and costly for developers to launch new housing projects.

In the end, Rankin acknowledges that Bend’s boundary expansion will likely be less than initially proposed, and by then the population density will be even higher. The City’s original request for 500 acres of “surplus” land, for example, will go away since it does not meet UGB legal guidelines. Both Chudowsky and Rankin agree that the affordability issue is real, immediate and serious, threatening to undermine Bend’s future overall growth. “Timing is extremely critical,” Chudowsky warns. Unfortunately, there’s no short-term answer to the affordability crisis, nor should the city expect an immediate resolution of the remand. But the process is now well underway, involving a broad spectrum of citizen, paid consultant and government involvement.

The City’s target is to develop a new UGB proposal by late 2016. “If current market conditions continue, affordability is only going to get worse. It’s a clear signal that we need to stay focused on our demanding timeline to complete the remand process,” Rankin says.

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