Portland Economist Warns Against Trading Inclusionary Zoning for UGB Expansion

In the feverishly-paced 35-day legislative session that began Feb. 1, few issues are more important to lawmakers than doing something to address Portland’s shortage of affordable housing.

One of the solutions lawmakers are mulling is a blockbuster trade: an expansion of the Urban Growth Boundary in exchange for inclusionary zoning.

The potential trade hasn’t gotten any press—but in the planning and housing world, it’s a huge deal, like talking about trading Kevin Durant for Steph Curry.

But Portland economist says Joe Cortright says the trade is bad policy.

“This is a losing proposition on both ends,” Cortright writes in a Feb. 3 article in the Journal City Commentary. “Busting the urban growth boundary will do nothing to address housing affordability, and inclusionary zoning would likely make the city’s affordability problems worse, not better.”

At least two bills attempt to address the shortage of housing supply by expanding the Urban Growth Boundary.

Senate Bill 1548, sponsored by Senate minority leader Ted Ferrioli (R-John Day) would allow local governments to expand their UGBs to create more housing without entering into the years-long, Metro-led process that normally proceeds a UGB expansion.

That bill is likely to face enormous opposition from Oregon’s powerful land-use advocates, including the Metro regional government and conservation groups such as 1000 Friends of Oregon.

The second bill, Senate Bill 1575, sponsored by Sen. Chris Edwards (D-Eugene) offers a straight-up trade: end the state ban on inclusionary zoning in exchange for a UGB expansion.

For the past four sessions, some Portland-area Democrats have pushed for inclusionary zoning, which they say will address the housing shortage by requiring a percentage of units in new developments be affordable.

Oregon and Texas are the only two states that ban inclusionary zoning.

Efforts by lawmakers to overturn that have repeatedly run into the opposition of the Oregon Home Builders Association and its powerful lobbyist, John Chandler.

Inclusionary zoning has long been seen as the silver bullet—or at least a very useful tool—for solving Portland’s affordable-housing shortage. But WW reported last year that cities that use inclusionary zoning as a tool have developed less affordable housing in recent years than has Portland.

Cortright lists seven reasons why inclusionary zoning is no magic solution for Porland.

“Housing affordability is a real problem, and it demands solutions that address the reality of today’s housing market,” Cortright concludes. “Sacrificing the state’s prudent system of planning for urban growth won’t remedy housing affordability.”