Tuesday, June 16, 2009

Portland and the Urban Growth Boundary

One of the things you hear time and time again is that an Urban Growth Boundary (UGB) or, in our case, the Agricultural Land Reserve (ALR) is primarily responsible for high real estate prices. I’ve been reading a book on Portland called, funny enough, The Portland Edge. The book looks at the various myths and truths about planning and urban form in that region. It points out that in a study of UGB’s and regions across America, UGB’s play a small role in high real estate prices. The most important driving force in pricing is the desirability of an area.

One of the keys to providing affordable housing in a desirable area is to ensure that there is an affordable housing policy in place. Also, the promotion of secondary suites and a mix of housing type will provide housing options at different price points. A great way to provide affordable housing is for governments to own and/or buy land when the value is lower, then work on deals to help that land support an affordable housing policy. Portland, for the most part, failed to pick up land before the value increased. Smart Growth BC and many other organizations have great resources on affordable housing.
Critics who focus on the impact of the UGB as a land market constraint that unfairly drives up housing price would like to leave out the impression that Portland planners and policy makers are simply passive observers if the rising prices. Those who claim that the price increases are attributable to market constraints resulting from planning policies should explain the 80% increase (in 1999 dollars) in home prices reported values during the 1970’s when Portland’s population declined by 4.1% with a corresponding loss of 482 homeowner housing units. There certainly was plenty of undeveloped land readily available within the city in the 1970s. (Chapter 9)
This was also before the UGB was established in the region. So if anyone tells you that the ALR is why housing cost so much in Metro Vancouver, you can tell them that it has more to do with desirability and land speculation. And isn’t that the story of development in the whole history of the region.

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