MINUTES OF THE METRO COUNCIL GROWTH MANAGEMENT COMMITTEE

Tuesday, June 20, 2000

Council Chamber

Members Present:  Rod Park (Chair), Ed Washington (Vice Chair), David Bragdon (Acting Member)

Members Absent:    Rod Monroe

Chair Park called the meeting to order at 3:14 p.m.

Chair Park noted that Councilor Monroe was absent from the meeting, as he was returning from the National Association of Regional Councils Conference in Florida. In Councilor Monroe's absence, Presiding Officer Bragdon sat on the committee as an acting member.

1.  Consideration of the Minutes of the June 6, 2000, Growth Management Committee Meeting

2.  Resolution No. 00-2956, For the Purpose of Accepting the Regional Affordable Housing Strategy Recommended by the Affordable Housing Technical Advisory Committee Appointed by the Metro Council

Chair Park clarified that the committee was discussing the final version of the Regional Affordable Housing Strategy, as recommended by the Affordable Housing Technical Advisory Committee (H-TAC). This version has a purple cover, and a copy is included in the meeting record.

Gerry Uba, Project Manager, Long-Range Planning, Planning Department, introduced the resolution. He said
H-TAC finalized the Regional Affordable Housing Strategy (RAHS) at its meeting on June 12, 2000. The Metro Policy Advisory Committee (MPAC) considered the Regional Affordable Housing Strategy at its meeting on June 14. MPAC voted to endorse the Regional Affordable Housing Strategy with one amendment. A copy of the letter from Lou Ogden, Chair of MPAC, to Presiding Officer Bragdon regarding MPAC's recommendation is included in the meeting record.

Jeff Condit, Vice Chair, H-TAC, apologized that Diane Linn, Chair of H-TAC, was unable to attend due to a family commitment. He said the Regional Affordable Housing Strategy asks Metro to amend its Urban Growth Management Functional Plan (Functional Plan) to require a process for local governments to consider the land use tools recommended by H-TAC. RAHS also requires Metro to assess the region's progress in 2003. He noted that the time frame of three years is tied to the release of new census data. He said although H-TAC has not met as a whole to discuss MPAC's recommended amendment, the members of H-TAC who were at the MPAC meeting did not oppose the change.

Chair Park clarified for the committee that a motion would be required to accept MPAC's amendment.

Michael Morrissey, Senior Council Analyst, noted that at last Growth Management Committee meeting, the committee discussed the draft Regional Affordable Housing Strategy, which had an off-white cover. The agenda packet includes a letter from H-TAC Chair Linn and H-TAC's recommended changes to the draft Regional Affordable Housing Strategy.

Councilor Washington clarified that his motion to recommend Council adoption of Resolution No. 00-2956 referred to the final recommendations of H-TAC (the Regional Affordable Housing Strategy with the purple cover).

Chair Park asked legal counsel if he was correct that MPAC's recommended amendment would not affect the settlement agreement that originally created H-TAC. If fact, wouldn't MPAC's amendment make the resolution more parallel with the settlement's intent?

Larry Shaw, Senior Assistant Council, said yes, the wording recommended by MPAC would require less change to the Regional Framework Plan language that was mediated and subsequently adopted.

Mr. Uba added that at the last H-TAC meeting on June 12, the committee gave Metro staff an award in recognition of their work on H-TAC. Plaques were presented to Mr. Uba, Malu Wilkinson, Assistant Regional Planner, and Alyssa Isenstein, Planning Department Intern.

Mr. Condit said H-TAC appreciated staff’s work and gentle prodding of members to make the meetings and finish documents on time. H-TAC also appreciated Councilor Washington's leadership on affordable housing, the settlement agreement, and the creation of H-TAC. He said he had found the process very enjoyable. He noted that Rob Drake, Mayor of Beaverton, mentioned how tense the first H-TAC meeting had been. As H-TAC worked through the issues, however, the members developed a good consensus building effort. H-TAC was very pleased to have received a strong endorsement from MPAC.

Councilor Washington he remembered the first meeting, and the tension was thick. He noted that prior to the creation of H-TAC he met with all of the region's mayors to explain what Metro planned to do, and more importantly, what Metro did not plan to do. He thanked the members of H-TAC for their work, and said he would see them at their reception following Council Thursday evening.

Chair Park opened a public hearing at 3:34 p.m.

Jane Leo, Portland Metropolitan Association of Realtors, expressed her concerns about the Regional Affordable Housing Strategy. She read from written testimony, a copy of which is included in the meeting record.

Chair Park asked Mr. Condit to respond to Ms. Leo concerns.

Mr. Condit said that while the Regional Affordable Housing Strategy recommends a real estate transfer tax, H-TAC is not wedded to that concept. If the Realtors, or any other group, can suggest an alternative means of funding that can produce the same amount of revenue that can be dedicated to affordable housing, H-TAC will be happy to consider it as part of the mix of strategies. H-TAC believes that a real estate transfer tax is a niche tax that taxes the value of growth in the real estate market, and is therefore an appropriate means to fund an affordable housing strategy. He noted that Washington County has a real estate transfer tax, and many of the feared results have not materialized. He said a real estate transfer tax is the best of a bad selection of revenue-raising alternatives. Such a tax will require a statutory amendment, and will probably require a vote of the people in the region. He added that some of the potential inequities of the tax can be fixed so that it does not substantially affect the price of a new home.

In response to another concern raised by Ms. Leo, Mr. Condit said H-TAC focused on the affordable housing need for people at 50% of the median income and below, because that is where the need is the greatest, and because substantially more money would be required to try to address the full need. Also, he believed the land use strategies are more likely to impact affordability for people whose income is between 50% and 120% of median income, because they reduce the costs incrementally. In terms of the real estate transfer tax, there was some discussion about using a portion of the tax to assist first-time home buyers. H-TAC agrees with Ms. Leo about the importance of not excluding first-time home buyers from the market.

Presiding Officer Bragdon said affordable housing means many different things to many people, from sheltering the homeless to starter homes for workers. He asked Mr. Condit to elaborate on his statement that the greater need is for people whose income is 50% or less than the median income. He asked how H-TAC valued the social benefits of home ownership versus the need for rental properties.

Mr. Condit said H-TAC focused on the 50% and below because that is the area where home ownership is not really an option. A substantial subset of that population is unable to rise above that level of income because of age, disability, or other conditions. H-TAC did discuss the need to help the first-time home buyers, and the higher lower-income classes. Portland City Commissioner Erik Sten noted that while many rental units are available in that price range, first time home buyer statistics are plummeting. A real estate transfer tax would have to be twice as high as H-TAC's recommendation to address every affordable housing goal. He noted that the affordable housing targets are ten percent of the estimated need, in order to find a balance between the need and what can be realistically accomplished.

Mr. Uba clarified that in terms of the real estate transfer tax and Metro's role, H-TAC recommends that local governments take the lead in convincing the state legislature to change the existing law of prohibition. With regard to Metro, H-TAC recommends that Metro assist local governments in setting up the administrative infrastructure for administering the fund.

Chair Park asked Ms. Leo if the Portland Metropolitan Association of Realtors had recommendations for changes to the Regional Affordable Housing Strategy.

Ms. Leo said there are several places in the document where it can be easily improved. She said she offered an amendment to H-TAC at its public hearing. She proposed amending the language in Chapter 5 of the June 6, draft, concerning the congressional delegation. She paraphrased the draft which read, to work with the congressional delegation to remove hurdles from HUD and other federal government entities to promote affordable housing. She recommended adding the language, "and home ownership opportunities." There are things the congressional delegation can do with HUD and how FHA administer their funding. There is a matrix in the document listing different areas at which local municipalities can look, including density bonuses, voluntary inclusionary zoning, and fast tracking affordable housing through the permitting process. Why not just ask the local municipalities to look at barriers in their entire permitting process? When it comes to the creation of homes, or any development, time is money. She said the term "affordable housing" occurs throughout the document, and there are many small changes that could be made to strengthen the document.

Chair Park noted that even if the Council adopts Resolution No. 00-2956 on Thursday, June 22, the Regional Affordable Housing Strategy can be further amended, and includes benchmarks at 12, 24, and 36 months. He asked if Ms. Leo's organization is willing to suggest further refinements during the next three years.

Ms. Leo said the Portland Metropolitan Association of Realtors would be happy to assist Metro in further refining of the Regional Affordable Housing Strategy over the next 36 months.

Councilor Washington offered to serve as a liaison between Ms. Leo and H-TAC.

Mr. Condit noted that Metro Council's acceptance of the Regional Affordable Housing Strategy does not make it binding law. It will not be law until the Council amends its Functional Plan, so there will be opportunities for further testimony and refinement. He added that H-TAC discussed fast tracking the entire permitting process, but the committee had to balance the desire to improve the situation for affording housing with the financial capabilities of the local governments. The local governments on H-TAC raised the issue that currently they have a mandate to make land use decisions in either 120 or 150 days. Fast tracking one subset of decisions means one of two things: 1) delay in the other subsets, and 2) adding staff, which is a financial mandate. H-TAC tried to avoid direct financial mandates on local governments. The requirement that local governments look at how they might streamline their procedures, which is one of H-TAC's recommendations, might reflect back through the remainder of their procedures.

Presiding Officer Bragdon said Ms. Leo's suggestion to urge HUD to explore home ownership opportunities seemed like reasonable change. He asked why H-TAC did not recommend her amendment.

Mr. Uba said H-TAC concluded that it had already addressed Ms. Leo's concern by stating clearly that local governments are encouraged to use the strategies in Chapter 4 of RAHS to explore ways to address other housing issues, such as home ownership.

Mr. Condit said he did not believe anyone on H-TAC would object to Ms. Leo's amendment. He thought her recommendation was consistent with H-TAC's discussions, although he could not speak for the committee as a whole.

Councilor Washington said he will introduce Ms. Leo's amendment at Council on Thursday.

Mr. Condit said at the time Ms. Leo proposed the language change, H-TAC was trying to balance not making too many changes to the draft document with the need to address areas in the document that were creating concern.

Ms. Leo commented that the proposal to use real estate transfer tax fund to help first time home buyers refers to first time home buyers who are lower income. She said "lower" needs to be refined, because she fears that home ownership assistance will be limited to a small income group. Also, the document before the committee says that discussion of the implementation and administration of the tax should be held off until the funding mechanism is in place. She said it is dangerous to take the attitude of "write me the check and trust me." The details need to be there first. She pointed out that the 10% targeted need for affordable housing represents between 15 and 20% of what is currently built during that same period of time.

Chair Park closed the public hearing at 3:59 p.m.

Councilor Washington said the Regional Affordable Housing Strategy will continue to be refined. Metro will work to ensure that refinements are made commensurate with the concerns of all interested parties.

Chair Park said H-TAC has done a tremendous amount of work. He viewed the Regional Affordable Housing Strategy as a work of progress. There is always a rightful concern when looking at wealth transfers that it be done equitably. He noted that before any transfer of wealth can occur, however, a lot of work needs to done outside of Metro, to convince the state legislature to reverse the decision it made during its last session.

Councilor Washington will carry Resolution No. 00-2956A to the full Metro Council.

3.  Resolution No. 00-2945, For the Purpose of Granting Time Extensions to the Functional Plan Compliance Deadline for the Cities of Happy Valley, Portland and Sherwood and Multnomah County

Mary Weber, Manager of Community Development, Planning Department, presented Resolution No. 00-2945. She noted that Brenda Bernards, Senior Regional Planner, will do a presentation on Function Plan compliance at the July 12, 2000, MPAC meeting. She added that there are some requests for exceptions to the Functional Plan which are on hold until MPAC is ready to consider them.

Ms. Bernards clarified that Executive Officer Mike Burton recommends time extensions for all four jurisdictions in Resolution No. 00-2945. While he recommends making this the final extension for the cities of Portland, Sherwood and Happy Valley, he recognizes that Multnomah County may need additional time, because its compliance is dependent on the Cities of Gresham, Portland and Troutdale. Ms. Bernards reviewed the staff report to the resolution, a copy of which is included in the meeting record.

Chair Park asked about the note that the City of Portland has requested a time extension to meet the requirements of Title 3, which will be dealt with in a separate resolution.

Ms. Bernards said staff will bring a report to committee shortly on the City of Portland's request.

Chair Park will carry Resolution No. 00-2945 to the full Metro Council.

4.  Draft Resolution Concerning Goal 5 Timeline and Completion

Mr. Shaw presented the draft Resolution No. 00-2965 on Goal 5 timeline and completion, a copy of which is included in the meeting record. He said the purpose of the resolution is to recite Metro's work to date on Goal 5 and respond to MPAC's recommendation to take more time to develop the Goal 5 regulations. It was suggested earlier today to add a "whereas" to reflect Resolution No. 00-2912, which was adopted by the Council in March 2000 to reflect the Council's comments on the National Marine Fisheries Service (NMFS) draft 4(d) Rule, in which Metro said it will try to make its Goal 5 work qualify for a 4(d) rule exception from take. He asked for committee direction on any additional changes, and a possible motion to move the resolution to Council.

Chair Park asked Mr. Morrissey to review the resolution.

Mr. Morrissey said draft Resolution No. 00-2965 refers to two main tracks. First, the development of Goal 5 itself, and second, how Goal 5 relates to periodic review and the time extension granted by the Land Conservation and Development Commission (LCDC). Chair Park previously mentioned Resolution No. 00-2912, in which the Council directed Metro's comments to NMFS about Metro's intent to development Goal 5 in a way that could also address the Endangered Species Act (ESA) listing of salmon and steelhead trout. He said the committee may choose to include a citation of Resolution No. 00-2912 in Resolution No. 00-2965.

Chair Park said the purpose of the change is to strengthen the resolution and remind people that Metro's Goal 5 program is good enough to satisfy ESA regulations also.

Presiding Officer Bragdon recommended changing the final "be it resolved" statement to convey that the schedule for Council adoption of the Functional Plan amendments is deferred. Ultimately, it is a matter of Council adoption subsequent to the Executive Officer's action. He recommended adding language to the resolution noting state direction on Metro's role in creating Goal 5 regulations.

Mr. Shaw said in the state's 1996 Goal 5, this is the option and the definition of how to address regional resources, but he did not believe it was a requirement by the state.

Presiding Officer Bragdon said it is not a requirement, but Metro is called out. Metro derives some authority from state law, in addition to the authority derived from the Functional Plan.

Mr. Morrissey said he will work with Ken Helm, Assistant Counsel, to incorporate the committee's recommendations, and forward it to Council. Because it is a draft resolution, the committee's amendments will not result in an 'A' version.

Councilor McLain will carry the draft resolution to the full Metro Council.

5.  Review and Comment on Regional Industrial Lands Study – Phase 3

Andy Cotugno, Director, Planning Department, reviewed the fourth draft of the Regional Industrial Land Study, Phase 3. A copy of the document includes information presented by Mr. Cotugno and is included in the meeting record. He said he had thought the Port of Portland wanted to release a Request for Proposals (RFP) within the next month, but it appears the Port has decided to release the RFP in the next two to three months, instead. He said the draft was prepared by the consortium of jurisdictions that initiated the Regional Industrial Land Study. Metro has not participated extensively in the study, except as a technical resource.

Mr. Cotugno said he has begun participating in an attempt to tie the Regional Industrial Land Study more directly to the organization's policy work so that Metro can take advantage of the work being done, because various parts of Metro's 2040 Growth Concept and Urban Growth Boundary (UGB) Periodic Review address the jobs issue. Secondly, the consortium has clearly indicated an interest in impacting Metro's policy work, as it relates to the UGB and other land use actions that affect the development of jobs in the UGB. He felt it is important for Metro to become more closely tied to the conduct of this work, so he asked the consortium to not embark upon an RFP before consulting with the Metro Council and MPAC. The consortium agreed. He noted that as a result of Phase 2, when the consortium reported the results to Council and MPAC last summer, he thought they did a good job stratifying industrial lands into categories A, B, C and D. Phase 3 expands on that work by identifying what is needed to make lower-tier lands serviceable and ready for development. He said he did not see any red flags in the draft document, and asked that Councilors come to him with any concerns. He said he expects to return to the committee in a month or two with a member of the consortium to request the committee's formal input. He noted that leadership of the consortium is transferring from the Port of Portland to the Portland State University Institute for Metropolitan Studies.

Chair Park said Metro staff is planning to conduct a similar study for residential. He said it will be interesting to see how much "Type A" residential land is available for development. It might be an interesting way to reshape current discussions.

Mr. Cotugno said he was not prepared to answer what staff is capable of telling the committee about the existing residential land supply. He noted that the industrial land study that identified and classified available land cost $100,000, which was not in Metro's budget. He said he does not expect residential lands to be as significant as industrial lands for a variety of reasons: 1) parcelization is not as critical, 2) brownfields are less prevalent, and 3) much more of the region's residential capacity relies on redevelopment.

Chair Park said he looks forward to more work from the consortium.

6.  Councilor Communications

Chair Park asked Mr. Shaw to review the remand by the Land Use Board of Appeals (LUBA) of Metro's adoption of the December 1998 Stafford Area UGB amendment.

Mr. Shaw reviewed his memo to Dan Cooper, General Counsel, regarding Stafford Appeal, a copy of which is included in the meeting record. He noted that this was a large case with many potential appellants. He said an Executive Session will be scheduled for full Council to consider a possible appeal.

Chair Park asked Mr. Morrissey to review the latest news on the NMFS 4(d) rule.

Mr. Morrissey said he and Mr. Helm attended a briefing earlier that day for regional ESA coordinators, conducted by Rosemary Furfey of NMFS. He distributed the "Summary of Key Sections in the Final Rules for Briefing Purposes Only," a copy of which is included in the meeting record. He said the final 4(d) rule was signed yesterday, but will not appear in its entirety until it is published in The Federal Register. He noted that for steelhead, the cooling off period will be 60 days after publication.

The other point Mr. Morrissey made pertained to the Council's stated intent to tie its Goal 5 regulations to a NMFS-approved urban exception against take. NMFS has enlarged the application to include urban areas plus municipal, residential, commercial and industrial redevelopment in cities, counties and regional government areas. In the draft 4(d) rule, there were 12 criteria for judging urban development, including stormwater management. Now, NMFS is saying that not all 12 of the criteria considered will necessarily be relevant to all ordinances and plans submitted for review and approval. According to Ms. Furfey, a local jurisdiction may choose not to come forward with all 12 criteria. If a local government comes forward with less than 12 of the criteria and receives NMFS approval on those criteria, it has the option of changing its codes and activities to protect against take on the remaining criteria. However, it will not receive a letter from NMFS stating its exemption from take on those remaining criteria.

Chair Park asked if Metro's plan addresses 11 of the 12 criteria, will it receive a full blessing from NMFS?

Mr. Morrissey said it was his understanding that if Metro's plan meets those 11 criteria, it will receive NMFS' blessing for those 11 criteria, but not for the 12^th one.

Chair Park asked if Metro would still be open to litigation on the 12^th criterion?

Mr. Morrissey said yes.

There being no further business before the committee, Chair Park adjourned the meeting at 4:43 p.m.

Respectfully submitted,

Suzanne Myers

Council Assistant

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ATTACHMENTS TO THE PUBLIC RECORD FOR THE MEETING OF JUNE 20, 2000

The following have been included as part of the official public record: