A Look Back at Oregon’s Senate Bill 100

Commemorating the 40th anniversary of the passage of Oregon’s “landmark” land-use law, known as Senate Bill 100, a columnist with the Salem Statesman-Journal looks back at the history of the passage and early implementation of that law. If he had looked a little closer at the long-term effects, rather than just the back-room dealing, he would have found an unhappier story.

First, the law made housing in Oregon unaffordable. Before the law was passed, median home prices were consistently about two times median family incomes. As Oregon cities began drawing urban-growth boundaries, prices quickly shot up to three time incomes and today stand at four times incomes. While developers in most other states were able to buy large parcels of land and design beautiful and affordable master-planned communities, such developments were rendered illegal in Oregon since no large parcels were available inside of urban-growth boundaries. Land-use regulation also made home prices more volatile, leading to a huge drop in prices in the 1980s and another big drop after 2008.

Second, the law contributed to Oregon’s hostile business environment. Except for a few select high-tech industries that were blessed with tax breaks, most industries in the state declined. Oregon leaders decided to “diversify,” meaning become less dependent on the timber industry, but instead they became dependent on the silicon chip industry, leading to a big decline in the state’s economy with the dot-com crash. Meanwhile, home-grown companies like Hollywood Video left in anger at Oregon’s ridiculous land-use rules. One result is that, during recessions, Oregon often has the first or second highest unemployment rates in the nation.

Third, the law slowed population growth in Oregon, which some people might count as a plus. While the population grew by 26 percent in the 1970s, it grew by only 8 percent in the 1980s, 20 percent in 1990s, and 18 percent in the 2000s.

Fourth, far from reducing the cost of services, the law contributed to Oregon becoming a high-tax state. Oregon’s tax burden is one of the highest in the nation, exceeded by only 11 other states (most of which also have similar land-use regulation).

Last but not least, the law trampled on people’s property rights. The 80 percent of Oregonians living in urban areas more-or-less told the 20 percent of Oregonians who live on and own about 97 percent of the private land in the state, “We’ve decided your land will be our scenic viewsheds, so you can’t develop it.”

Just what did Oregon get for all this except a sense of smugness for exercising almost complete control over private lands? Not much. According to 2010 census data, 98.8 percent of the state is rural and only 1.2 percent is urban (meaning developed in communities of 2,500 people or more). That sounds like a lot of rural land, but how much of it is really due to Senate Bill 100?

Colorado has no state-wide land-use law, and it is doing better than Oregon on almost all counts: more affordable housing, faster growth, lower unemployment rates, and lower tax rates. Colorado has more land than Oregon but it also has 5 million people to Oregon’s 3.8 million, so its overall population density is 48 people per square mile compared with Oregon’s 40. But the urban areas of both states have almost the same densities: 2,836 per square mile for Colorado vs. 2,805 for Oregon. Despite having no state land-use laws, 98.5 percent of Colorado remains rural.

Two-thirds of Oregonians live in the one-seventh of the state known as the Willamette Valley. As the Antiplanner documented several years ago, a study commissioned by pro-land-use planning groups found that 5.9 percent of the valley was urbanized and predicted that, under current land-use laws, this would increase to 6.6 percent by 2050. The study also estimated that, if all land-use laws were abandoned and the state “let private property rights and short-term market forces call the shots,” then 7.6 percent of the valley would be urbanized by 2050. A one percent difference is hardly enough to worry about, much less justification for imposing all of the above costs.

Thanks to the silence (or ignorance) of the planners who imposed these rules, most Oregonians are only dimly aware of the huge negative consequences and minimal benefits of the state’s land-use planning system. If they fully understood, they would probably vote quite differently in state gubernatorial and legislative elections.

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18 thoughts on “A Look Back at Oregon’s Senate Bill 100

  1. metrosucks

    Thanks to the silence (or ignorance) of the planners who imposed these rules, most Oregonians are only dimly aware of the huge negative consequences and minimal benefits of the state’s land-use planning system.

    I disagree. Planners certainly aren’t ignorant about what they’re imposing; they gleefully admire the results of their despotic practices. And they aren’t silent about planning; in fact, “organizations” such as Metro have paid PR staff to sing the hosannas of government regimentation and central planning to the masses.

  2. metrosucks

    And speaking of “despotic”, that’s not just a rhetorical flourish. My folks bought a 40acre parcel in the country over ten years ago. I clearly remember the endless agony over LUBA’s rules about building a house, subdividing, planting Christmas trees in order to get a building permit, just endless petty tyranny my parents had to endure before they could build their dream home. That’s the kind of “planners” Dan and msetty represent. I am glad to say that bennet is nothing like the former two I just mentioned; he is obviously a very reasonable fellow who is willing to listen to the other side.

  3. Bob Clark

    Bloomberg News rates Oregon third highest in individual tax burden, with only Hawaii and California outdoing it. Oddly, if you move north to Washington, you are one of the lowest in individual tax burden according to Bloomberg News. Oregon taxes productivity whereas Washington taxes consumption. It is probably not coincidentally, then, Washington has a higher per capita income than Oregon and a gap that is widening with time. Being an Oregonian myself, I have traded more leisure for less work simply because of the added 9% state income tax rate, when combined with federal tax rate, you are talking about losing more than a third of whatever you make at the margin to the government.

    The urbanization push has kind of a vicious circle aspect to it, too! The more urbanized Oregon gets (meaning higher population density in Multnomah County and Portland) the more monolithic the electorate becomes in its environmental perspective. Folks crammed into concrete high rises and lots of blacktop start to long for wide open spaces, and since they can’t have it themselves, they impose it on the rural or even suburban folks. Recently, as an example of this vicious circle, Metro passed a new “slush fund for natural areas” property tax levy. Metro is composed of three counties, namely, Multnomah (heavily urbanized), Clackamas (much less urbanized) and Washington (modestly less urbanized). The new levy failed in both Clackamas and Washington counties, but passed by such overwhelming percentage in urbanized Portland; that the measure was legally approved via popular vote (even as two of three less urbanized or suburban counties voted against it). The City of Portland is one vicious circle with very elevated rates of poverty (even for a major U.S city), and where creative means you can think of a new way of taxing one class of citizens to hand it over to another group of more “favored” citizens (usually with the government class taking its healthy cut in the process).

  4. Rob Taylor

    The Antiplanner once lived here in the little town of Bandon and he knows all too well the trouble local planners are causing property owners. We just defeated a local ordinance passed by the city council called the Dark Skies Initiative. The city planners pushing the initiative got their info from the international Dark Skies Initiative.org, which is an UN group. The people of Oregon have to fight for their property rights or lose it all. This is happening all over the state and country, but Oregon has led the way in dismantling our ability to own what is ours……
    http://www.cooscountywatchdog.com/1/post/2013/03/city-of-bandon-outdoor-lighting-ordinance-measure-6-148.html

  5. Frank

    “Bloomberg News rates Oregon third highest in individual tax burden, with only Hawaii and California outdoing it. Oddly, if you move north to Washington, you are one of the lowest in individual tax burden according to Bloomberg News.”

    Bob, that’s a major reason why I left Portland for Seattle. Also consider that Portland’s and Oregon’s unemployment rate usually trends far above the national average. As I’ve argued here before, such a high income tax (which starts at the first dollar of income) drastically affects the cost of labor because employers have to pay the tax, also. That’s nearly 20% of the cost of labor that could go directly to the employee and then be taxed after rent, food, and other necessities are paid. Add in Oregon’s high minimum wage, and you have a recipe for high unemployment, which disproportionately affects the lower social-economic class.

  6. Dan

    First, the law made housing in Oregon unaffordable.

    Several of us have shown on this site – literally at least a dozen times – that this assertion is false.

    HTH.

    DS

  7. metrosucks

    Several of us have shown on this site – literally at least a dozen times – that this assertion is false.

    Of course, most of us read every word on this blog, including every comment, yet fail to remember when the planner showed us this. Perhaps he could enlighten us mere mundanes yet again, pretty please.

  8. Frank

    “First, the law made housing in Oregon unaffordable.”

    “Several of us have shown on this site – literally at least a dozen times – that this assertion is false.”

    Agreed.

    “Before the law was passed, median home prices were consistently about two times median family incomes. As Oregon cities began drawing urban-growth boundaries, prices quickly shot up to three time incomes and today stand at four times incomes.”

    Correlation does not imply causation. Hmm. What else was going on in the early 1970s that could possibly explain the drastic increase in house prices, and other prices for that mater? Could it have anything to do with converting to a 100% fiat floating currency? Could it be the inflation crisis of the 1970s?

    The inflation graphs from the 1970s paint a clear picture. If you look at inflation adjusted gold prices, you’ll see they went up 9x in the 1970s. Is this because of the UGB, too? Look at gas, milk, copper, prices of any commodity or goods or service.

    The UGB is ONE factor of many that affected housing prices. The real culprits, which Cato libertarians continue to ignore, were cheap credit and speculation.

    Nothing new here.

  9. Frank

    Let me also state that I don’t necessarily support UGBs. But this following statement I think underlies The Antiplanner’s bias:

    “Land-use regulation also made home prices more volatile, leading to a huge drop in prices in the 1980s and another big drop after 2008.”

    Look at gold or any other commodity. Big drops after the early 1980s. A smaller drop in 2008. It’s simply a sign of a larger market correction, and I really want to see hard evidence that “land-use regulation also made home prices more volatile” and that the drops in home prices weren’t due to a correction of malinvestment caused by ultra cheap credit and easy monetary policy.

  10. libertyrailroad

    I support getting rid of all land use regulations, zoning laws, the FHA, government housing agencies, and the income tax with mortgage interest deductions removed.

  11. sprawl

    I was able to buy a house in the 70′s, near downtown, in Portland, making $5 dollars a hour in a beginning, low wage, unskilled job. Lots of my friends could easily buy a house because they were affordable ( around $ 21,000 for a starter house) before the UGB was imposed in Oregon.

    Dan may have debunked it several times, but Dan is still wrong about Portland.

  12. metrosucks

    Dan didn’t debunk anything, sprawl. I have never seen all these “I have shown so & so multiple times” lectures that planner boy supposedly gave us. Perhaps he could actually provide one of these presentations, for curiosity’s sake, just once. Is that asking too much?

    Frank, I do agree that inflation has definitely affected housing prices, and we must remember that the government has meddled in the market for far too long, starting with their policy around WW2 of deciding everyone must own a house, thereby becoming involved in the mortgage market. The 2000′s bubble, inflated to exponentially beyond bursting limits by Greenspan and company, created a huge mortgage-debt filled mania that was only exacerbated by the limits placed on housing by UGB.

    We must remember that a limited supply inevitably leads to higher prices, even if the limits on supply are more perceived than real.

  13. mattdpalm

    The numbers you provide about the urbanization of the valley are interesting, but I think problematic.

    5.9% Urbanized to 6.6% urbanized is an increase of 16.9%. As in, the urban areas would grow physically by 16.9%. But 5.9% to 7.6% is (2/5.9) a 33.9% increase in urbanized areas. So I’m trying to imagine Salem with 1/3rd more city versus 1/6th more city. And I think that is significant, especially given these cities are located on some of the richest soil, and often follow along rivers and the hearts of watersheds.

    The question for Oregon residents should be if the potential cost in terms of additional sprawl and less farmland/more pollution is worth the benefits.

    But don’t underestimate what that “freedom” scenario looks like city-side: the expansion of the cities physically versus their current sizes would be significant.

  14. English Major

    Bob,

    I live in Portland and you “nailed” it. Except for one thing: there is quite a bit of neighborhood push back
    forming. People are just now realizing how bad the city planning is here.

  15. Tom9

    Quoting,

    “Before the law was passed, median home prices were consistently about two times median family incomes. As Oregon cities began drawing urban-growth boundaries, prices quickly shot up to three time incomes and today stand at four times incomes.”

    Response: Same in Washington, where brand new homes used to cost $99,000 in the Renton-Kent-Covington area in the early 1990′s, just before the Growth Management Act. Also quoting:

    “The UGB is ONE factor of many that affected housing prices. The real culprits, which Cato libertarians continue to ignore, were cheap credit and speculation.”

    Response: These same financial factors were true in all 50 states, but places like Texas and Durango, CO did not have housing bubbles. It is not only Cato or the Libertarians who have documented these facts, as many liberal Democrat professors have noted the same thing, including Dr. Richard Morrill at the UW, and Dr. Bill Fischel at Dartmouth. In reading papers over the last 4 years, I made this list of “Professors who don’t like smart growth, or, who are skeptical about it.” Link,
    http://smartgrowthusa.wordpress.com/professors-do-not-like-against-oppose-smart-growth-new-urbanism-university-urban-planning-departments-architecture/

  16. Tom9

    Re: The Willamette Valley, and also the “Central Valley” of California, and areas outside of Boulder and Fort Collins, are very boring places to “vacation” in, whether you are cycling, running, or just driving. What’s especially ridiculous is when “cheatgrass” (a non-native grass from Europe, Bromus tectorum) takes over (most notably near Chico, CA), and you have nothing but dead brown grass in the summer.

    Furthermore, many college towns develop virtual urban growth boundaries, by purchasing land covered with cheatgrass and other non-native plants. Personally, I would rather ride a bike through landscaped one acre lots with large shade trees, rather than through dead brown grass. These lands are also fire hazards; recall how close the fire came to Boulder a few years ago.

    From a landscape architecture / “design with nature” perspective, it’s best to plant native oaks and other species, and return Western Oregon, California, and the Front Range to what they looked like hundreds of years ago. Unfortunately, the “greenbelt” movement around college towns is far from green since preserving a bizarre mix of native and non-native plants, and some farmland, isn’t really preserving anything that scenic. Instead, it’s a waste of the land, in areas where there’s plenty of water to plant tens of thousands of oak trees, and native wildflowers.

    I come from a botany / landscaping / aesthetics perspective and really find these dead brown grassy areas as highly unsightly. They indicate that DLCD planners in the Willamette Valley and elsewhere do not share the right brain dominance of Landscape Architects, Botanists, and also, Land Use Economists.

  17. Dan

    Tom9, EurAsian grasses were introduced into CA, OR, WA, NV in the mid-1800s with grazing. You aren’t going to fix the invasives problem by outlawing greenbelts (who have lots of volunteer programs to eradicate the 20+ spp. that are problematic invasives).

    DS

  18. metrosucks

    But don’t underestimate what that “freedom” scenario looks like city-side: the expansion of the cities physically versus their current sizes would be significant.

    So in other words, if the supposed expansion offends your sensibilities or aesthetics, it should not be allowed? Freedom costs too much if big-city liberals are offended that people do what they want with “their” own property (gasps of horror!).

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