MINUTES OF THE METRO COUNCIL GROWTH MANAGEMENT COMMITTEE

Monday, February 22, 1999

Council Chamber

Members Present:  Susan McLain (Chair), David Bragdon (Vice Chair), Rod Park

Members Absent:    None

Also Present:    Bill Atherton

Chair McLain called the meeting to order at 1:33 P.M.

1.  CONSIDERATION OF THE MINUTES OF THE FEBRUARY 2, 1999, GROWTH MANAGEMENT COMMITTEE MEETING

2.  URBAN GROWTH REPORT REVIEW

 ·  WRAP-UP QUESTIONS FROM LAST MEETING

 ·  FORECAST

 ·  RESIDENTIAL REFILL

Dennis Yee, Senior Economist, Data Resource Center, reviewed the memo from Executive Officer Mike Burton to Chair McLain, dated February 8, 1999, regarding Regional Forecast Update and Urban Growth Report. The memo is included in the meeting record and includes information presented by Mr. Yee. He recommended deferring the Regional Forecast to a later date to begin work in January 2000, with completion in Fall 2000.

Chair McLain said there are many times when a snapshot is practical and helpful. She asked for questions from the committee.

Councilor Park referred to page two of Mr. Yee’s memo to Elaine Wilkerson, Director of Growth Management Services, dated February 8, 1999, which states that a 2.5 percent deviation is not bad after 5 years. A copy of the memo is included in the meeting record. He asked Mr. Yee what is the standard deviation for this type of forecast.

Mr. Yee said strictly speaking, there are no standard deviations that can be computed for the forecast as a whole, because a number of uncertainties are assumed with respect to the forecast input drivers, such as federal interest rates.

Councilor Park asked whether, within the 90 percent confidence model, 2.5 is within that particular range and would not be considered abnormal.

Mr. Yee said yes, 2.5 percent is well within the confidence range.

Sonny Conder, Senior Regional Planner, Data Resource Center, summarized the Residential Refill Study. A copy of the Residential Refill Study includes information presented by Mr. Conder and is included in the meeting record. Using an overhead projector, Mr. Conder reviewed Chart A: Output diminishes with increasing refill rate, a copy of which is included in the meeting record. Mr. Conder confirmed for Councilor Park that the sample sections are comparable.

Councilor Park asked if consideration was given to the ages of the buildings in each sample section.

Mr. Conder said the vacant land ability measurement is used to determine the age of the buildings. He said it is important to realize that there is five times as much infill as redevelopment, and while the age of a building affects redevelopment, redevelopment is a relatively small proportion of the total amount of refill

Councilor Park said he was thinking of the City of Portland’s Gateway project. He said the targeted areas are of an age that is timely for redevelopment, as opposed to an area with new development like Orenco.

Mr. Conder said the sample sections are still comparable, because the same economic factors are operating. It is cheaper to develop Orenco than Gateway, unless there are government subsidies. He said when governments subsidize residential development, the refill rates go up.

Councilor Bragdon observed that Gateway is currently an aberration in terms of infill because it involves relatively large acreage. He asked Mr. Conder if he anticipates a change in the nature of infill as large projects, such as Gateway, occur.

Mr. Conder said to some degree yes, but projects like Gateway require subsidies and high prices. He said the region appears to be subsidizing a very high level of housing output: about 1000 units per year, according to the housing affordability task force, which will increase the refill rate if it is sustained over 20 years.

Councilor Bragdon noted that in the study, Mr. Conder mentioned that this relationship between output and refill does not appear to exist in Vancouver, British Columbia.

Mr. Conder said it is possible, via policy, to act to change the relationship of output and refill.

Mr. Conder explained Chart Three: Single family dwelling (SFD) refill percent goes down with increase in vacant areas. A copy of Chart Three is included in the meeting record on page 22 of the Refill Study. He added that many of the refill relationships are more particular to single family occupancy than multi-family occupancy.

Councilor Park asked about the total societal cost of developing on vacant land versus refill. He asked if the staff has looked at those costs, or only at the costs to the development community.

Mr. Conder said the Refill Study is a description of how developers will respond, under the current system. He said there is no presently no mechanism for passing along costs of congestion, schools and long-run infrastructure.

Councilor Park said that seems to be a key component of what the Council is trying to decide as it moves through the Urban Growth Report.

Mr. Conder said he agrees that the Council should consider what would be an appropriate refill rate, how much land should be within the urban growth boundary (UGB), and who pays for development.

Mark Turpel, Manager, Long-Range Planning, Growth Management Services, said the study assumes that the vacant land has urban services. The relationship will be different on vacant urban reserve lands which are not yet serviced.

Councilor Park said that schools, churches, and other facilities do not automatically exist near vacant land simply because the land is serviced.

Chair McLain said the committee should remember that this is a snapshot of one of the variables. She said the committee will need to talk more about each of the variables and how they interrelate.

Councilor Atherton said he is trying to understand why refill drops off when available acreage increases beyond 200 acres. He said if it is a refill situation, it could be because the vision for the area is not desirable.

Mr. Conder said the more vacant land that is serviced and available, the more attractive vacant land is to developers, and the less attractive infill sites in that sample section are.

Chair McLain asked the committee to review the study’s recommendations and remember that the Council had a goal of 28.5 percent. She asked them to consider whether the goal should still be 28.5 percent, and whether the current refill rate of 25.4 percent is a good trend, a bad trend, or neutral.

Mr. Conder said regulation affects refill rates, and he explained Chart Five: More units and increased price increase chances of refill. A copy of Chart Five is included in the meeting record on page 24 of the Refill Study. He said as zoning is changed to allow higher densities, there will be a corresponding increase in infill and redevelopment. He said higher housing prices also result in more refill. He said while Metro does not control price, it can influence zoning densities.

Councilor Bragdon said the study concludes that the current refill rate is about 25 percent, with 28.5 percent as the goal. He said the study alludes that in the past, the refill rate was far worse than 25 percent, as measured by dilapidation and abandonment. He asked if dilapidation and abandonment are still measured, and said they should be quantified in terms of social cost.

Mr. Conder said it is very difficult to measure this, and he had to make some inferences. He said negative infill rates are associated with very slow or no growth. He said governments have little control over economic cycles, therefore the refill rate will fluctuate. He said he expects the long-term refill rate to increase, but does not yet know how that will affect the capture rate.

Councilor Bragdon said he is not persuaded of the clear link between output and infill. In the 1980s, the region had relatively low output and negative refill numbers, which indicates there are other factors involved, such as economic prosperity and land supply.

Chair McLain said other factors for the committee to consider are westside light rail, the relationships between vacant land and refill possibilities, as well as green fields and brown fields. She said the committee is looking at actuals and using the actuals to make assumptions. She said Mr. Conder has done his best to determine the outcome of the specific assumptions he used. She said the committee needs to make suggestions to staff about each factor in the Urban Growth Report.

Mr. Turpel emphasized that staff feels this Refill Study is its first accurate snapshot. He said staff did quick analyses earlier which proved to be close to the mark, but prior to 1995, refill was never considered in the capacity analysis.

Councilor Park asked for Mr. Conder’s opinion on how ramp up affected refill.

Mr. Conder estimated that right now, the refill rate is closer to 30 percent than 25 percent, because the region is subsidizing a large number of multi-family housing units on redeveloped land.

Councilor Park said he understands what Mr. Conder means with the term “subsidized,” reusing current infrastructure. He said is uncomfortable with the term “subsidized,” however, because it gives a wrong impression that redevelopment projects are subsidized, but new development is not.

Mr. Conder said he is not trying to make a policy assessment; he used the word “subsidy” to mean that a government body has a sufficient financial stake in the development, and that it can decide on the location of the development. Single-family owner-occupied housing is heavily subsidized in the United States, but government does not have a direct say in where each dwelling unit is built.

Chair McLain asked the committee to review the major study findings and recommendations on page 2 of the study, and return to the next meeting with suggestions for staff. She believes the study is good news and refill is a valid tool that should be included in the formula to determine buildable lands capacity.

Councilor Park commented that much of the capture rate is outside of Metro’s influence and depends on the actions of the state legislature regarding transportation. He said the correlation should be strongly voiced.

Mr. Turpel said there is a separate study on the capture rate which should be available for the next meeting. He said capture rate was noted in this study to alert the committee to the how the factors interrelate.

Councilor Bragdon said much of the study is good news, especially related to the capture rate. He said a 25 percent refill rate is good news. He said the Council needs to reassert that it wants to be as aggressive as possible, because refill is the key to minimizing the expansion of the UGB. He said the refill analysis is both a good snapshot and an example of how Metro’s policy influences growth. He said he wants to be fair in discussions about subsidies and the way the United States funds investments, such as highways and mortgage interest deductions, which are not visible but profoundly influence the landscape.

Michael Morrissey, Senior Council Analyst, said the Functional Plan was not fully in effect when the refill study was done, and he asked how it is estimated to affect the future refill rate.

Mr. Turpel said the Urban Growth Report makes assumptions about ramp up, and it will probably take six more months before staff can determine exact numbers.

Councilor Bragdon said the refill study alludes to the challenges of infill. He said it may be useful to define those obstacles so that Metro and its regional partners can take steps to overcome the obstacles.

Mr. Turpel said government may be able to help overcome obstacles to refill. In addition, as the development community becomes more skilled at refill, refill may become more possible.

3.  COMPLIANCE REVIEW

Mary Weber, Manager, Community Development, Growth Management Services, gave a brief overview of the Functional Plan and the process the committee will see in the next few months. A memo from Mike Burton to Chair McLain, dated January 17, 1999, regarding final Functional Plan compliance steps, includes information presented by Ms. Weber, and is included in the meeting record.

Chair McLain asked Ms. Weber what criteria her staff used when reviewing extension requests.

Ms. Weber said her staff was guided by the language in the Functional Plan requiring jurisdictions to show substantial cause and a good faith effort.

Chair McLain asked that the staff report indicate that a good faith effort was the basis for asking the Council to consider the extensions. She said the staff report should clearly state that a good faith effort could be different in different jurisdictions depending on the amount of work done and the tasks still ahead.

Councilor Bragdon asked if there are set criteria by which to judge requests from local jurisdictions for exceptions to compliance plan requirements, and what the timeline will be.

Ms. Weber said staff is first requiring jurisdictions to complete all their work before requesting exceptions. In other words, jurisdictions are given every opportunity to comply. Secondly, Title 8 of the Functional Plan states that jurisdictions have the burden of proof of why they cannot comply. She said staff would welcome further guidance from the Council.

Chair McLain told Councilor Bragdon that Ms. Weber was purposefully vague because staff was told to bring the extensions first, and then the committee will discuss how to approach exceptions.

Ms. Weber said the Functional Plan states that only the Council may grant exceptions, but it must go through a mediation process with the Metro Policy Advisory Committee (MPAC).

Councilor Atherton said the memo from Mr. Burton regarding final Functional Plan compliance steps states that Lake Oswego has not adopted minimum densities and has no plans to do so. He said this is in error; Lake Oswego has minimum densities for several zones.

Marian Hull, Senior Regional Planner, Growth Management Services, said the information in Mr. Burton’s memo came from City of Lake Oswego staff.

Chair McLain asked staff to confirm.

4.  RESOLUTION NO. 99-2755, FOR THE PURPOSE OF GRANTING TIME EXTENSIONS TO THE FUNCTIONAL PLAN COMPLIANCE DEADLINE

Ms. Hull presented Resolution No. 99-2755. A staff report to the resolution includes information presented by Ms. Hull, and is included in the meeting record. She said staff works closely with the 27 jurisdictions in the region, and understands each jurisdiction’s staff capabilities and needs. She said in staff’s judgment, the 11 jurisdictions in Resolution No. 99-2755 appear to meet the Metro Code requirement to demonstrate either substantial progress or proof of good cause for failing to meet the requirements on time.

Councilor Park asked if there is concern about the City of Troutdale’s request for an exception on accessory dwelling units.

Ms. Hull said the absolute impact on Troutdale’s capacity by not implementing accessory dwelling units is quite small. She said the region-wide policy set by such an exception is a decision for the Metro Council.

Councilor Bragdon clarified that the committee is not voting on Troutdale’s exception request today. Ms. Hull agreed, but said it was included in the report as an informational item.

Councilor Bragdon asked about the status of Title 3 compliance in the region.

Ms. Hull said only two or three jurisdictions have formally indicated that they may need extra time for Title 3. She said realistically, some jurisdictions will need time extensions in December.

Councilor Atherton asked if the need to expand the UGB would be affected if local jurisdictions complied with all the requirements of the Functional Plan.

Ms. Hull said the targets set in the Functional Plan were meant to accommodate all of the growth in the region within the existing UGB, therefore in her opinion, it would have an effect.

Councilor Atherton asked if the Council were to grant time extensions, would it be reasonable to go to the state for a time extension on the 20-year land supply requirement.

Ms. Wilkerson said staff has proceeded on the assumption that Metro was not processing an extension request. She said if every jurisdiction complied with all the Functional Plan requirements, there would be potentially an impact on the Urban Growth Report assessment, but there are assumptions that differentiate between capacity and likely use of capacity. She said the exact relationship is unknown because the parameters are different in the two analyses. She said in the next two years, staff hopes to collapse the two studies into one set of numbers.

Chair McLain asked Ms. Wilkerson to prepare written work and give a detailed answer at a future meeting.

Councilor Atherton said Ms. Wilkerson referred to the likely future. He asked if the state has any regulations on what the likely future will be, and what constitutes an adequate forecast.

Ms. Wilkerson said Metro’s forecasts have been accepted by the state. She said the term “likely to occur” refers less to forecast than underbuild. She said she wanted to clarify for Councilor Atherton that there is not a direct relationship between achieving Table 1 numbers in the Functional plan and Urban Growth Report numbers.

Chair McLain asked Mr. Shaw to discuss the timing issue on extensions.

Mr. Shaw said it is important to grant time extensions as close as possible to the February 19, 1999, compliance deadline so that third parties cannot use Metro’s regional law to litigate against local jurisdictions who have requested extensions.

Chair McLain will carry Resolution No. 99-2755 to the full Metro Council.

Councilor Bragdon said he has been impressed by the relationship between Metro and local jurisdictions at the staff level. He said as elected officials, the Metro Council needs to do as well at the neighborhood association level and with its colleagues.

Chair McLain recommended that when speaking to outside organizations and local jurisdictions, it is helpful to have both a staff member and a Councilor.

5.  COUNCILOR COMMUNICATIONS

There were none.

There being no further business before the committee, Chair McLain adjourned the meeting at 3:00 P.M.

Respectfully submitted,

Suzanne Myers

Council Assistant

i:\minutes\1999\grwthmgt\02229gmr.doc

NOTE:  The minutes were revised at the March 2, 1999, Growth Management Committee meeting. The correction appears on page 2.

ATTACHMENTS TO THE PUBLIC RECORD FOR THE MEETING OF FEBRUARY 22, 1999

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