Reason Foundation

Reason Foundation

Portland's Suburban 'Tipping Point'

Leonard Gilroy
October 24, 2005, 10:53am

According to Portland planners, the area's "tipping point" -- the point at which land value exceeds its improvement value -- has been achieved, thanks to the metro area's urban growth boundary. Rising suburban land values in turn spur the development of remaining underdeveloped parcels, as well as teardowns in existing neighborhoods and replacement with higher density developments. According to The Oregonian: As Randal O'Toole handily reminds us, Portland planners have been less than forthright about their intentions here: the plan "envisioned this phenomenon," even as planners continue to claim that the UGB doesn't increase land & housing prices. Got to give them credit for their skill at pulling the wool over the public's eyes. Back to the article: growth's tremendous impact on costs and housing is to make them soar. Randal also points out another glaring piece of the article -- a discussion with a broker whose claims that their new project of 1,200 sq. ft. townhouses priced between $279,000 and $310,000 "is perfect for first-time homebuyers." What?! Maybe if your household is pulling in over $100K per year, but how many first-time homebuyers fall into that category? Don't homes under $150K sound a bit more feasible for first-timers? Here in Houston, you can pick up a brand new single-family suburban home for under $150. Randal hits it right on when he points out that less land use regulation tends to equate with regional housing affordability. Too bad that Portland planners don't get this. (Hat tip: American Dream Coalition blog)

Leonard Gilroy is Director of Government Reform

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