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UGBs and Urban/Rural Reserves

Urban Growth Boundaries

Each Oregon city is surrounded by an urban growth boundary (UGB); a line drawn on planning maps to designate where a city expects to grow over a 20-year period. This growth can occur with new houses, industrial facilities, businesses, or public facilities such as parks and utilities. Restrictions in areas outside of a UGB protect farm and forest resource land and prohibit urban development. Generally speaking, it’s where the city ends and the farms and forests begin.

A UGB is expanded through a joint effort involving the city and county, and in coordination with special districts that provide important services in the urban area. The UGB expansion process typically includes some level of citizen participation. Once land is included in a UGB, it is eligible for annexation to a city. Adding land to an existing city limit through annexation is not regulated by the Land Conservation and Development Commission (LCDC).

Since 2016, when the Land Conservation and Development Commission adopted revised rules regarding UGB expansions, cities and counties in Oregon have successfully approved 40 expansions or adjustments to their UGBs. 

Learn more about UGB amendments since 2016 from this Summary.

Does a UGB cause density?

Oregon land use law favors places that have a variety of development types — apartments, condos and single-family homes, office buildings big and small, large factories and small manufacturers. The fact is, UGB or not, any city's going to have a healthy share of multifamily housing. But Oregonians familiar with other parts of the country, know apartments in other cities tend to wind up nestled on six-lane boulevards on the edges of town, surrounded by parking lots. The purpose of UGB's is to encourage that multifamily development to be within existing business districts, where people can walk to get to what they need and support small businesses.

The statewide planning goals encourage a city to offer a variety of housing options that are located near other city services and amenities.

Does a UGB cause rents and house prices to go up?

No matter where you are in the country, new housing is expensive. The average new American house costs more than $400,000, according to the National Home Builders Association. Rents in Portland aren't that different from Austin, Denver or Atlanta. There's a combination of factors at play: Housing construction almost totally stalled during the Great Recession, but population growth didn't. Once the recovery began, the rush to build new housing caused the prices on everything from labor to drywall to go up.

In greater Portland, one driver of rising housing costs are "system development charges" — fees that builders pay to help support construction of the pipes, roads, parks and schools that are required for urban living. Taxpayers here have said those bills should be picked up by people buying new housing, not the public at large.

So where a new sewer line in, say, Phoenix, can be paid for by a combination of a small sales tax and small systems charge, here, all of those charges are put back on the developer, and ultimately, home buyer or renter.

Certainly, the urban growth boundary does cause land values to go up a bit. But compared to the totality of home prices, the difference is minimal: For a 5,000 square foot lot, the difference between land selling for $100,000 per acre and $200,000 per acre is about $11,500. When you're talking about $450,000 houses — an $11,500 increase in land price is not causing affordability issues.

What's the point in having a boundary if it can be expanded indefinitely?

The UGB is meant to make the region think about growth, not to stop it completely. By encouraging developers to think about areas already in the UGB but available for development, it slows the rate that farms are converted to housing and prevents leap-frog developments.

Reference: UGB 101: Everything you wanted to know about the urban growth boundary but were afraid to ask​, Portland Tribune, Nick Christensen, Metro, January 2018.

In 2015, LCDC adopted a new simplified method for cities to use to evaluate and amend their UGB. This method is provided as an additional option for cities to consider and not in lieu of the traditional UGB amendment process. (The traditional UGB amendment process details can be found in OAR 660-024-0000.) The simplified method was created to reduce the costs, complexity, and time required to amend a UGB. The details of this method can be found in OAR 660-038-0000.

DLCD created a calculator tool for local governments to assist them in using the UGB Expansion Simplified Method.

The following reports summarize analysis performed to support the rules advisory committee tasked with creating the simplified method:

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Some UGB amendments adopted by local governments are submitted to DLCD for review. The DLCD director must either 1) approve the local decision, 2) deny the decision and return it to the local government for revision, or 3) refer it to the Land Conservation and Development Commission. The director must make a decision within 120 days from the date the information was received by DLCD. For more detailed information about UGB amendment review criteria and those currently in review by DLCD, click here.

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Urban and Rural Reserves

In 2007, the legislature authorized Metro and metro-area counties to designate urban land that might be developed in the future, and rural land to be preserved for farming, forestry, and other rural uses. Special rules for urban reserves in the Portland metropolitan area are intended to assist in the long-term planning for urban development. By designating urban reserves, the agriculture and forest industries, private landowners, and public and private service providers, are aware of future long-term (for the next 50 years) expansion locations of the Metro UGB. Additionally, rural reserves are intended to provide long-term protection for large blocks of agricultural land, forest land, and other important natural landscape features that will limit urban development. Details about designating urban and rural reserves in the Portland metropolitan area can be found in OAR 660-027-0005.

Urban reserves, outside of the Portland Metro area, may also be established by local governments. Urban reserves are intended to provide a 30- to 50-year area for long-term city growth. Urban reserves provide guidance for a city’s long-term future and protect the urban reserve area from rural development which would make future city expansion more difficult. Details about designating urban reserves outside of the Portland Metro area can be found in OAR 660-021-0000.

Contact

Kevin Young
Senior Urban Planner
kevin.young@dlcd.oregon.gov
Phone: 503-602-0238