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OP-ED: UGBs and the resurrection of subregional analysis

From the Daily Journal of Commerce. A recent Land Use Board of Appeals (LUBA) decision involving the city of Klamath Falls concerns an almost forgotten analysis for amendments of urban growth boundaries (UGBs). Under the conventional analysis, once a need for additional land was established, a city was required to look not only at lands already in the UGB, but then at candidate lands outside the UGB in order to choose appropriate lands.

In the late 1990s, Metro chafed at these requirements. If Hillsboro needed land for a new chip-making plant or Sherwood needed more land for housing, why should such needs be frustrated by requiring the region to use lands in multiple ownerships in Damascus or Stafford.

Metro came up with the idea that perhaps a needed lands analysis could be adjusted so that perhaps the entire region need not be considered. For example, if one considered only the western part of the region, Hillsboro could identify a need for additional chip-making lands and would not need to bother with satisfying that need in Damascus, which would likely make the chipmaker go elsewhere.

Metro adopted a “subregional analysis” along the lines described above and used it to direct needed residential growth to the Stafford area, instead of, say, Damascus. The Court of Appeals struck down the UGB expansion, saying that Metro could identify a subregional need for housing (say for the West Linn, Lake Oswego, Wilsonville area) but still must first look at alternative sites within the UGB and, if those lands were insufficient, at other lands that met state land use criteria. It could not limit its consideration of lands in Stafford to meet that need. Metro then prevailed on the Land Conservation and Development Commission to amend its UGB rules (but not Goal 14, which those rules implement) to allow for the decision maker to ignore other available lands within the UGB, but not near the subregion. Moreover, if there were candidate lands outside the UGB, the decision maker need only consider those lands near the subregion.

The Court of Appeals struck down that effort as well as being inconsistent with the urbanization goal, which required consideration of all lands within the UGB and did not limit consideration of lands outside the UGB to those near the subregion that was deficient in a particular type of urban lands. Thus a UGB expansion for the Hillsboro chipmaker would be obligated to consider lands in Damascus.

The LCDC and the state Legislature “fixed” the problem in a manner of speaking by providing for “urban reserve areas” (theoretically those lands proposed for inclusion in the UGB in 20-50 years) that would be first in line for expansion of the UGB once existing urban lands were used. Those lands were identified and ready to be added immediately. The fact that those lands were in large farm or forest holdings did not alter the analysis. That solved Metro’s problem, but it did nothing for other parts of the state that did not adopt urban reserves.

Klamath Falls and Klamath County decided to use a subregional analysis without having any urban reserves, notwithstanding Metro’s experience. The urbanization goal and rule had changed since those cases were considered, but not in a way that changed the analysis. Land within the entire UGB had to be considered and, although cities and counties could consider “proximity” in identifying need, though the Court of Appeals had already recognized use of this consideration, the basic considerations of locating the place where the need was satisfied, remained.

Klamath Falls was obviously enamored of a specific site that it wanted to add inside the UGB, the Badger Flats property, and wrote its local criteria to achieve that objective. The city used a subregional analysis that looked only at the west side, saying that only candidate sites within that subregion (extending beyond the UGB) would be considered. The city also said the site should be about 22 acres to allow for development of a lifestyle center, and should be developed at approximately the cost for the Badger Flats property, be available for purchase and be developed free of moderate or severe constraints and the like. By constructing these criteria, the city made Badger Flats the inevitable choice.

While the city and county did consider a number of sites, the state challenged six of the seven criteria used by the city to eliminate other candidate properties, contending they were inconsistent with the urbanization goal, which does not authorize establishment of subregions based on “physical and man-made barriers, transportation corridors, and market conditions affecting the commercial landscape” in the area. LUBA was apparently offended by the real possibility of “gerrymandering” of both the subregional boundaries, as well the city criteria that deliberately tilted toward the Badger Flats site. Moreover, the city and county did not prove that any subregional need for commercial lands could be solved only within that subregion. For all these reasons, the UGB expansion was struck down.

This is not the last word on the subject – the county and landowner, claiming that the criteria with the state had been cleared, will appeal the LUBA decision. But the case reveals the tricky analysis that must be used to meet the urbanization goal. Need within a subregion can rightly be considered; however, satisfaction of that need means a municipality must look first at lands within the UGB and, if insufficient, outside that boundary, but may not limit its consideration to the subregion unless that need may only be satisfied within the subregion (generally an unlikely prospect). Under current case law, Metro is accommodated by the urban reserve process, but other areas of the state will find the subregional process very difficult indeed.

Edward Sullivan is a retired practitioner of land use and municipal law for more than 45 years. Contact him at esulliva@gmail.com.

Carrie Richter is an attorney specializing in land use and municipal law at Bateman Seidel. Contact her at 503-972-9903 or crichter@batemanseidel.com.

http://djcoregon.com/news/2017/10/10/op-ed-ugbs-and-the-resurrection-of-subregional-analysis/