Common Deceptions About Growth Boundaries

Portland State University planning professor Ethan Seltzer thinks it’s a “misconception” that urban-growth boundaries make housing more expensive. “This claim has been addressed and dismissed since Gov. Vic Atiyeh’s administration,” he claims, though without offering any actual evidence.

“By law,” he continues, “there must be enough land in the UGB to meet needs for residential development for the next 20 years.” The law says it, so it must be true. Never mind that Metro decided not to add any land to the growth boundary last year even though Portland was in the midst of a housing crisis.

Planners such as Seltzer may have convinced themselves that they are immune to the laws of supply and demand, but economists disagree. The end of this post lists more than half a dozen economic papers that conclude that growth management and land-use regulation explain most if not all the differences in housing affordability among cities.

In Portland’s case, median home prices were 1.8 times median family incomes before planners drew the growth boundary. Since then, the population inside the growth boundary has grown by 60 percent but the boundary has been expanded to add only 14 percent more land. As a result, median home prices today are 4.1 times median family incomes. Because all Oregon cities must have growth boundaries, Oregon in 2014 was the fifth-least-affordable state after Hawaii, California, New York, and Massachusetts. Of course, higher prices also have to do with increased land-use regulation, stiffer development fees, and other costs, but cities like Portland wouldn’t dare to impose those restrictions and fees if there weren’t an urban-growth boundary to prevent people from escaping to low-cost housing elsewhere.

Like too many other urban planners, Seltzer also thinks density is the solution to every problem, including reducing “energy use, farmland preservation and economic vitality.” In fact, density is often the problem, not the solution, and even when density helps there are other solutions that work better and cost less.

For example, multi-family housing uses more energy per square foot than single-family housing. Mid-rise and high-rise construction uses more energy per square foot than low-rise. The only way that density saves energy in housing is because people in dense, multi-family housing live in smaller homes. Why? Because such housing is so expensive!

If you want to save energy, encourage people to build zero-energy homes that cost about $125 per square foot. That’s $250,000 for a 2,000-square-foot house (plus the cost of the land, which isn’t very much if you don’t have an urban-growth boundary). By comparison, in Portland you can spend $369,000 on a 705-square-foot high-rise condo, or $465,000 on an 1,157-square-foot mid-rise condo. Saving energy in a single-family home is vastly more affordable.

Farmland preservation? Why? According to the 2012 data from the US Department of Agriculture, Oregon has 14.8 million acres of non-federal agricultural lands and only grows crops on 3.5 million of those acres. About 24 percent of the state is agricultural, while developed areas (including urban areas and rural roads, railroads, and any other developments more than a quarter acre in size) only cover 2.3 percent of the state. All of Oregon’s urban-growth boundaries cover just 1.5 percent of the state, and if there were no urban-growth boundaries, urbanization might have extended to about 2 percent. In other words, planners like Seltzer raise threats to farmlands only as a sort of bogeyman to scare the public.

Density is hardly needed for economic vitality. In terms of sheer numbers, the fastest-growing urban areas in America are Houston, Dallas-Ft. Worth, and Atlanta, and none of them are very dense. The Houston urban area alone grows by more people every six years than live in the entire city of Portland. Most people think Houston’s heat and humidity make it undesirable, but the lack of planners has made it one of the most economically vital regions in the nation and the headquarters for 27 Fortune 500 companies.

Portland is the headquarters for just two Fortune 500 companies (Nike and Precision Castparts), both of which have had conflicts with land-use regulators. Unlike Houston, Portland is near mountains and canyons and has a mild climate, yet too much planning and regulation has made it an economic basket case, with people working shorter hours for lower pay than elsewhere (and the new minimum-wage law sure isn’t going to help).

The dirty little secret that planners have known about since at least 1999 is that the impacts of high housing prices fall hardest on the poor, which is why some people call Portland’s system “economic apartheid.” Census data indicate that, from 2010 to 2014, the black population of the city of Portland shrank by 6.3 percent while the black population of the urban area as a whole shrank by 1.4 percent.

Many low-income blacks who have stayed in Portland have been forced into lower-quality housing. Between 2000 and 2010, the share of households headed by whites living in single-family detached homes declined by 3.3 percent, but the share of households headed by blacks living in such homes declined 16.1 percent. While white homeownership rates fell by 2.2 percent, black homeownership rates fell by 12.6 percent.

It is time to stop defending the indefensible. Oregon’s land-use planning system and similar growth-management laws in California, Hawaii, Washington, and other states make housing unaffordable yet provide few to no compensating benefits. These laws should be repealed.

Economic Papers Finding That Land-Use Regulation Increases Housing Costs

Share

12 thoughts on “Common Deceptions About Growth Boundaries

  1. metrosucks

    Thank you Mr. O’Toole for addressing the lies this planner spews. In addition, some have pointed out that he worked for Metro as some sort of inspector while at the same time producing what passes for “research” at PSU, research which “just happened” to support every lie and invention made up by Metro.

    Oregon’s land-use planning system and similar growth-management laws in California, Hawaii, Washington, and other states make housing unaffordable yet provide few to no compensating benefits.

    It provides benefits to the entrenched ruling class in those states. That terminology is particularly applicable to Oregon, where decades of corrupt Democratic rule have turned the state into the basket case it is today. Meanwhile, 1000 Enemies of Oregon and their associated buddies bask on their porches out on the 100 acre spreads they own beyond the reach of the mere mundanes who are stuffed into sardine cans within the urban growth boundary.

  2. FrancisKing

    “For example, multi-family housing uses more energy per square foot than single-family housing. ”

    Since we are housing households and people, it is worth noting that ‘multi-family housing’ uses less energy than ‘single-family housing’ on both criteria – using the data in the link provided.

  3. FrancisKing

    “A resolution against expanding the UGB was supported by calculations showing there is currently enough buildable land within the boundary to accommodate the growth, provided local governments in the region complete their approved development plans and 123,000 additional housing units are built in Portland by 2035.”

  4. Frank

    “Because all Oregon cities must have growth boundaries, Oregon in 2014 was the fifth-least-affordable state”

    Least-affordable state for what? Housing? Where’s your evidence?

    Seattle has government-created UGBs, and it certainly has natural/geographic UGBs.

    Why then is the cost of rent/housing in any Oregon city–from KFalls, to Medford, Pendleton, Bend, Eugene, and Portland–far less expensive than in Seattle?

  5. C. P. Zilliacus

    The Antiplanner wrote:

    Farmland preservation? Why?

    At least in the East, so that some very wealthy people can have their “viewsheds” and farms [or as they say in some parts of the Midwest, hobby farms] within reasonable commuting distances of major metropolitan areas unmolested by grubby middle-class people and middle-class development.

    It is time to stop defending the indefensible. Oregon’s land-use planning system and similar growth-management laws in California, Hawaii, Washington, and other states make housing unaffordable yet provide few to no compensating benefits. These laws should be repealed.

    Agreed. But getting people that vote in elections to understand the damage that urban growth boundaries does in some metropolitan areas appears to be difficult.

  6. transitboy

    From http://www.newgeography.com/content/003856-the-evolving-urban-form-portland we learn:

    Among the nation’s 51 major metropolitan areas, Portland ranks 25th in the share of population living in zip codes with more than 10,000 people per square mile in 2010 (Figure 7).

    According to the article, Dallas-Fort Worth and Houston both have a higher percentage of the population living in high density areas than Portland, OR. Shouldn’t we make Portland be at least as dense as Houston before eating up more farmland?

    “Why then is the cost of rent/housing in any Oregon city–from KFalls, to Medford, Pendleton, Bend, Eugene, and Portland–far less expensive than in Seattle?”

    Because these articles focus only on supply and never on demand. Building more housing in Tacoma won’t drive down housing prices in Seattle, because people want to live in Seattle and not in Tacoma. Since there is no more undeveloped land within the city limits of Seattle, additional housing must come through additional density.

  7. Ohai

    For example, multi-family housing uses more energy per square foot than single-family housing. Mid-rise and high-rise construction uses more energy per square foot than low-rise. The only way that density saves energy in housing is because people in dense, multi-family housing live in smaller homes. Why? Because such housing is so expensive!

    Right. Because, total square footage is the highest good to which we can aspire in housing. As any realtor will tell you, the most important factor in determining the desirability of a house is “square footage, square footage, square footage,” er . . . wait a minute.

  8. msetty

    “For example, multi-family housing uses more energy per square foot than single-family housing.”

    Well, not really, once you subtract the typical two-car, or larger, garage included as part of most new single family houses. For the most part, high density housing parks their cars outside or in carports, except perhaps for high-rises (no info in note about if garage parking in those cases is heated). Read the notes in The Antiplanner’s first reference.

    But then that is something The Antiplanner and much of the peanut gallery here have trouble with, the details, “where often the devil lies.” Such seemingly “minor” errors is why I take everything The Antiplanner says with a huge grain of salt, and know for certain what is wrong when certain members of the peanut gallery spew forth their b.s. here.

  9. Frank

    So msetty, if you believe that multifamily housing is superior, why not move to density?

    I see that you have a 250 square foot garage. By you, I mean your mommie.

    I will give you props for living in such a small house (1176 square feet, two-bedrooms) with your mommie and your sister. Don’t know how you do it, bro. You must spend a lot of time drinking wine while masturbating in the pool. No wonder you’re so grumpy; guess we know who’s pissing in your cereal.

Leave a Reply