Metro Portland’s Long Experience with Smart Growth: A Cautionary Tale

To see how Smart Growth policies might affect Northampton, we can look to the experience of those who are farther down the path. The experience of the Portland metro area raises concerns. Restricting sites that can be developed boosts home prices. Homeownership rates can suffer, especially among minorities and those with lower incomes. Buyers who want affordable homes with yards seek them farther and farther out, adding to vehicle usage. Those in the denser zones tend to retain their cars. Congestion ensues. The costs of upgrading urban infrastructure to keep pace with increasing density is significant. The increase in impervious surface in particular generates stormwater management issues.

Oregon has been a Smart Growth pioneer. A statewide program for land use planning dates from 1973, and cities have adopted strict urban growth boundary restrictions. Here are excerpts from “Smart Growth and Its Effects on Housing Markets: The New Segregation” (PDF), an econometric report by QuantEcon for the Center for Environmental Justice of The National Center for Public Policy Research (November 2002):

Restricted growth policies are designed to preserve open space and reduce motor vehicle usage through limitations on the geographic expansion of metropolitan areas. Such policies necessarily – as one of their goals – reduce the land available for home building. In other words: site restriction…

QuantEcon’s study examined the site restrictions caused by the restricted growth policies of Portland, Oregon, the metropolitan area with the most severe restricted growth policies in the United States…

Expected home price inflation was found to be greater than expected in most of the states that embraced smart growth, including Oregon, Washington, Tennessee, Kentucky, Pennsylvania, and Colorado…

Poor and minority families pay a disproportionate amount of the social and economic costs of growth restrictions. The weight of increased home prices falls most heavily on minorities, the disadvantaged and the young, fewer of whom already own homes. The “haves” who already own homes ride the price bubble created by restricted growth policies while the dream of ownership moves further away from the “have-nots.”

Restrictive growth policies actually caused increased suburbanization in Portland, which now has the 10th greatest suburbanization rate in U.S. As home prices went up in the site-restricted metropolitan area, families moved further out to find affordable housing. Portland actually has rates of suburbanization that are close to that in metropolitan areas with so-called “white flight” and other central city problems. This phenomenon increases vehicle miles traveled as it lengthens commutes…

Denser multi-family housing requires more costly construction techniques, further increasing the cost of housing.

Restricted growth policies do not eliminate the need for great amounts of spending on new infrastructure. Portland has encountered great expense in upgrading its urban infrastructure to accommodate increased population density. Infrastructure costs can in fact be higher in a dense metropolitan area because the old must be removed before the new is built.

The notion that potential homeowners would prefer to pay the higher cost of high-density housing as an alternative to the traditional home/yard/neighborhood environment style of raising families is wrong. The percentage of families moving to the Portland area that buy or rent within the UGB [Urban Growth Boundary] has fallen dramatically since site restrictions were implemented.

There is very little evidence that other aspects of restricted growth policies have reduced households’ costs in other areas to offset the increased costs of housing. In economic terms, it is safe to say that restricted growth policies are not family-friendly…

Smart growth advocates argue, of course, that the amenities and efficiencies of smart growth outweigh these adverse effects on the cost of housing. From this author’s viewpoint, however, these amenities and efficiencies have yet to be demonstrated…

…[Urban Growth Boundary] policies all tend to incorporate mechanisms for loosening the restrictions gradually in the face of growth. In the case of the state of Oregon and in its Portland region specifically, however, the practice has been to resist engaging the boundary expansion features of the policy. In practice, the planners find ways to redefine (upward) the development capacity of the area within the boundary, thereby avoiding significant increases in the area within the boundary despite regional and development demand growth…

To this day, the region’s planners are reluctant to accept the fact that there is any relationship between the UGB and the area’s skyrocketing housing prices…

…regional planners in Portland have been holding the line on the UGB by assuming away housing market responses, and by opportunistically redefining the concept of capacity…

Oregon housing has become among the least affordable housing in the United States, an effect that can be linked empirically to the joint phenomena of the UGB and the rapid growth in the economy that occurred in the 1990s.[10] Even though the Oregon economy weakened significantly in 2001, its housing remains among the most expensive in the nation. Small cities surrounded by developable land, like Eugene and Salem, now have housing prices that rival those in San Francisco Bay Area communities, when the purchasing power of local incomes is considered (see Figure 4). Homeownership in the Portland region has plummeted since home price inflation and the region’s emphasis on multifamily development discourage home purchases. Portland homeownership rates, once among the nation’s highest, fell sharply below U.S. and even nearby, larger Seattle’s rates (see Figure 5)…

Ironically, given the stated goals of smart growth policy, these trends caused the Portland metropolitan area to suffer a high rate of suburbanization because it lost its ability to “capture” new population influx into the metro area (see Figure 6). That is, growth was diverted from the Portland UGB to other areas. This so-called capture rate trend, of course, is inconsistent with the notion that Portland’s smart growth policy was successful in engineering a “quality of life” and other conditions that offset the disadvantage of high home prices. New migrants to the Portland region did what they could to avoid the region’s restrictive policies by increasingly choosing other metro areas…

…Portland is increasingly unattractive to some households, particularly to those with lower incomes and households hoping to own their own homes and rear their…children in a conventional house and yard environment…

It is certainly the case that suburban-type development requires infrastructure development. But so does in-fill development. The important difference is that infrastructure development in the suburban context occurs in a green-field development setting; that is, infrastructure development costs are favored by the relative ease with which right-of-way can be obtained, and the fact that there is not much need to acquire and demolish existing development. For example, Portland is currently laboring to finance a multi-billion dollar consolidated sewer outflow system to accommodate the effects that dense (and impervious) development is having on surface water accumulations in the region.

The presumption that Portland can significantly reduce auto use through intensive light rail and bus transit service and land-use planning is not borne out by the data… In Portland, average daily vehicle miles traveled (VMT) per person is about 20, versus 21 for Los Angeles…

The notion that concentrating development will somehow reduce the dis-amenity of regional congestion has poor theoretical and empirical foundation. Traffic congestion rises approximately in proportion to population density. Portland’s population density, for example, is approximately 45 percent higher than the average of the largest 200 metro areas; its VMT per square mile is, correspondingly, 42 percent higher… [S]tatistical analysis of a cross-section of metro areas reveals that VMT per capita increases with density…

Oregon actually has a tremendous amount of available land… Oregon has apparently successfully engineered a shortage of sites in a state with plentiful land…

See also:

Bozeman Daily Chronicle: “Bozeman’s Growing Pains” (9/7/05)
In 1992, Portland’s regional planning authority, Metro, began doing nearly everything smart growth advocates propose. They continued to uphold a 1973 urban growth boundary, rezoned neighborhoods to double the density, and diverted funds from new road construction to light-rail transit.

What happened? Portland, once one of the nation’s most affordable housing regions, is now one of the most expensive. “Leapfrog” suburbs are springing up outside the urban growth boundary. Taxpayers are forced to subsidize high-density housing and public transp
ortation that is used by only 2 to 5 percent of residents. Open space for recreation is at risk after 10,000 acres of parks, fields, and golf courses were rezoned for infill development.

One of smart growth’s goals is to significantly reduce car use. But in Portland, this has not worked. In fact, Metro predicts that by 2040 the percentage of car users will decrease by only 4 percent — by that time, Portland’s population will have nearly doubled. That means almost twice as many people driving on nearly the same amount of road…

A 2005 study by the Harvard Institute of Economic Research confirms that stringent zoning and urban growth boundaries are major factors in housing price increases.

Reason Magazine: “Dense Thinkers” (January 1999)
Portland is even selling park lands at discount prices to entice developers into building high-density apartments.

Planetizen: “Trouble in Smart Growth’s Nirvana” (6/30/02)
The 2000 Census shows that, as expected, Portland became more dense. What was not expected was that all-suburban Phoenix would become more dense than Portland…

Despite the claims of the transit-media complex, Portland’s anti-highway policies are failing. The 2000 Census shows that transit’s work trip market share remains 20 percent below the 1980 Census rate, which preceded opening of the first light rail line. And, Portland’s highway congestion has become the worst of any metropolitan area of its size…

The contrast between Phoenix and Portland could not be greater. Both urban areas densified, but housing affordability improved in Phoenix, while plummeting in Portland. The difference, of course, is that market forces were allowed to work to a greater degree in Phoenix…

Densification is no more popular in Portland’s neighborhoods than it is in Berkeley, Boulder or Bozeman. As a result, a recent citizen’s initiative sought to limit Metro’s (the land use regulation agency) densification power. Metro feared passage so much that it placed a competing densification referendum on the ballot, which passed with 66 percent of the vote. The citizen’s initiative received a respectable 43 percent…


The Atlantic Monthly: “How Portland Does It”
…the growth boundary has not changed the basic pattern of development. Housing, stores, and employment have developed mostly in separate zones. As they have, people have been driving more; total miles driven in the Portland area jumped 55 percent during the 1980s. A regional air-pollution problem attributable to motor-vehicle exhaust is in the making.

The New Draft Sustainable Northampton Plan: Balancing Compact Growth Against Taxes, Urban Greenspace, Homeowner Preferences
Mishandled campaigns for density can trigger an intense political backlash. In suburban Portland, voters recalled a mayor and two council members over dense development and a neighborhood light-rail alignment (Farris, p.23).

Berkeley, California: Cautions on Infill
We must draw people back into relatively compact urban areas. Showcase cities that have managed to attract would-be suburbanites into increased core densities have done so through neighborhood revitalization and by giving priority to quality of life, not density. This is the opposite of what Berkeley is doing…

Berkeley Downtown Area Plan Advisory Committee (DAPAC): “Environmental Sustainability”
Adopted by Subcommittee on September 11, 2007
…Pollution from urban runoff (stormwater) is the greatest contributor to degraded water quality in the Bay Area. Increased urban runoff is a direct consequence of development and the associated loss of natural water retention and filtration through the installation of impervious surfaces. Berkeley does not meet the current, state-mandated water quality standards for urban runoff…

At the same time, engineered stormwater treatment systems, which were installed 50-60 years ago, are now failing throughout the Bay Area (and California) as they reach the end of their projected “lifespans.” Berkeley’s stormwater system repair costs were recently estimated to be in the range of $100 million or more.

Green strategies for stormwater treatment are being implemented throughout the Pacific Northwest, and in other parts of California, as a more cost-effective, and multi-benefit solution to the challenges outlined above. Specifically, green approaches include: reducing impermeable surfaces, adding vegetation and soils that can absorb and filter stormwater, and restoring natural waterways and/or creating natural drainage swales to complement the engineered stormwater treatment systems now in existence…

Metro Portland: “Nature in Neighborhoods”
It’s unfortunate that Northampton’s new Wetlands Ordinance encourages development as close as 10 feet to wetlands in our more built-up areas. There is much to be learned from the experience of the West, which has witnessed the effects of rapid growth in formerly green areas.

The Economic Value of Wetlands: Wetlands’ Role in Flood Protection in Western Washington
More than half of the wetlands that once existed in western Washington have been lost. Often the cause has been agricultural conversion, but today wetlands are increasingly at risk due to urban and suburban development. Western Washington is now one of the fastest growing regions of the country, and the remaining wetlands in rapidly developing areas are increasingly valuable for the flood protection they can provide. At the same time, the increasing pace and density of development is resulting in the natural wetlands systems that are capable of absorbing urban runoff becoming ever more fragmented, even as the need for flood protection grows ever more critical…