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Land Use Initiative When Oregon's land use laws were adopted in the early 1970's, the state, and particularly its economy, was markedly different than it is today. Land use laws were designed to restrict urban sprawl and protect farm and forest land as agriculture and forestry were predominate elements of the state's economy. However, the economy has changed dramatically over the last thirty years with other emergent industries now sharing a role in providing for the state's prosperity. In the Portland metropolitan region, this change is particularly dramatic. As a result, the current land use system often results in decisions that do not meet the needs of the region's growing economy. Increasingly, the region is competing in the highly competitive and fast-paced global marketplace; this is particularly true of the traded sector industries that form the foundation of our regional economy. Business decisions about where to locate are being made on highly compressed timelines. These traded sector businesses are highly mobile and can locate anywhere in the world, but have chosen or will choose to locate in this region based upon its ability to support their needs. An adequate inventory of land suitable for the expansion of new and existing businesses is a critical element of a competitive regional economic development strategy. The consequences of inaction are real. The Regional Industrial Lands Study (RILS), which focused on the lack of short-term industrial land, found that approximately one-half of the potential job growth in the study area could be "leaked" to other regions, either outside the focus area of the study or to other states entirely. There are a number of issues with the land use system that need to be addressed, which fall into three broad categories: (1) policy/process, (2) infrastructure, and (3) land supply. Some issues may be resolved at the regional level and some will require state intervention. Participation of the business community in identifying and implementing solutions is critical. Two upcoming efforts - the statewide "Big Look" and the 2040 Update - will provide an opportunity for the business community to be actively involved. It is critical that changes to the land use system are initiated to ensure that it promotes the region's economic development objectives and is responsive to the market and specialized needs of targeted industries. Policy/Process The market does not value all industrial land equally. Factors such as access to transportation, suppliers and customers, proximity to industry clusters and workforce, infrastructure capacity and site attributes must be taken into consideration when expanding the region's Urban Growth Boundary (UGB) to meet employment needs. 1 Currently, these factors are not given adequate attention, largely due to state statutes and administrative rules that cast UGB expansion decisions exclusively within a framework of soil type. This means that urban development has been largely relegated to exception lands. While this approach worked when the economy was built upon resource industries, and when there was a relatively large inventory of vacant industrial land within initial UGBs, this is no longer the case. Thus, it is vital that policy changes are made to the current system that recognize and respond to the needs of industries that now drive the economy. As part of its state-mandated 1997-2002 periodic review, Metro's analysis of industrial land need and supply suggested a substantial market demand for land along the I-5, I-84 and US 26 corridors to accommodate a variety of industry clusters. Additionally, the state's Industrial Lands Advisory Committee found that there is a lack of large industrial sites along I-5 and that land located at existing freeway interchanges are logical market-driven locations for large scale industrial and employment intensive development. Despite these findings, the recent regional UGB expansion did not address this identified need adequately. This is but one example of the disconnect between the existing soils-driven land use system and a market sensitive approach that will ensure the region's economic development objectives are met. In addition to policy issues affecting the supply of employment land, recent regional UGB expansions have become increasingly politicized, time consuming, subject to lengthy appeals, and require voluminous findings to stand up to court challenges. This further constrains the ability of the region to provide the land necessary to fulfill employment needs within a reasonable time frame. Rather than focus on outcomes, the current process results in heated debate over the many assumptions that go into calculating a forecast of future land consumption. Although this calculation cannot be done with precision, the current system requires just that - a single forecast of land needs over a 20-year period. Process changes are needed to ensure the land use system is streamlined, flexible and adaptable to rapidly changing market conditions. Infrastructure By and large, regional UGB expansion areas designated for employment require lengthy concept planning and annexation for which there is little public sector priority and few resources. In addition, providing the necessary infrastructure to serve these areas requires substantial investment for which there is inadequate funding. The result is that there is typically a six to 10-year delay from the time new employment land is brought into the UGB and its availability for development. The impact of this is that even when UGB expansions occur to meet employment land needs, those lands cannot fulfill their intended purpose, further constraining the region's amount of available land. It is critical that the region make the land brought into the UGB available for industrial and employment uses by assuring there are adequate resources available to plan and provide the necessary infrastructure. Land Supply The Portland metropolitan region currently has an inadequate supply of employment lands to meet the region's projected job growth over the next 20 years, particularly land for industrial uses and in employment centers. The Land Conservation and Development Commission recently sent a remand order to Metro requiring it to address a 331 acre deficit of industrial land from the 2002 periodic review that exists despite Metro's 2004 post-review work to identify additional industrial acreage. With the population growing faster than Metro's projections - the region will reach the 2040 projection of 2.5 million by 2020 - there is even more pressure to create an adequate inventory of suitable, vacant employment land to support the region's economic development objectives. In addition, the recently adopted Nature in Neighborhoods program places additional regulations on industrial land, further limiting the region's ability to provide sufficient industrial land to serve its economic development objectives. To this must be added a number of contaminated brownfield sites that may require significant investment to return them to productive use. It is critical that the region identify mechanisms and develop tools to redevelop these sites as they are often located in prime or irreplaceable industrial locations and served by existing infrastructure.2 Clean up of these sites for industrial development is one way to increase the numbers of acres of industrial land available and ensure past investments in infrastructure are maximized. It is not just the total supply of industrial land that is inadequate to serve the regional economy. Numerous studies have identified the lack of competitive and suitable short-term sites as particularly problematic.3 Specifically, the Regional Industrial Lands Study found that of the region's total industrial land supply, only one-third was considered ready to develop; the remaining two-thirds were considered constrained.4 Business location decisions that once took 4 - 6 months to make now occur within 60 days. This means that if sites are not fully "shovel-ready," they will not even be considered. Additionally, the location of sites are critical, as well as having an array of suitable sites from which to choose. Industries are most successful when they can locate proximate to clusters of similar industries, as well as have access to infrastructure, workforce, suppliers and customers. Given the global economy in which the region must compete, it is more important than ever to ensure the region has an elastic supply of land that can accommodate the region's overall economic development objectives and the specific needs of targeted industries. 1) Enact policy changes that will enable land use decisions to be responsive to market factors and promote a healthy economy.
2) Enact process changes that will accelerate decision-making and provide flexibility in the land use system.
3) Ensure a competitive, development-ready supply of land that supports regional economic development objectives.
4) Implement policies and programs to promote redevelopment and the use of land within the UGB.
5) Prioritize infrastructure improvements that support regional economic development strategies both inside the UGB and within expansion areas.
6) Identify funding mechanisms for planning so that regional UGB expansion areas can be put to productive use in a timely manner.
7) Ensure adequate infrastructure capacity to serve employment land needs throughout the region.
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