This Land Problem Needs a Solution

A lack of ready-to-develop industrial sites is hurting the Portland-area economy

Jack McConnell, Senior Vice President, NAI NBS

When Senate bill 100 went into effect in Oregon in 1974, it required each Oregon town to maintain within its Urban Growth Boundary a 20-year inventory of land for ongoing residential development. Yet the bill was incomplete because it neglected to include a similar requirement for maintenance of an inventory of land for retail, office and industrial development.

Today, in the greater Portland area, there is a significant shortage of ready-to-develop land sites zoned for industrial use, especially along freeway corridors where an increasing number of businesses prefer to locate. Yet demand is still present for local firms to construct their own facilities and other firms to enter the region. In fact, it would be accurate to describe this shortage of land sites as “a clear and present danger” – a situation that will continue to hurt both our economy and our image.

Metro will tell you there is a more-than-adequate supply of industrial property to accommodate expansion and new development. And when considering only the number of acres available, that conclusion may seem accurate. However, such a conclusion is wrong and damaging to our community’s economic health, now and in the future. Numbers alone can be seriously misleading.

A recent study by a Portland engineering firm identified 9,300 buildable acres inside the Portland-metro UGB. But of these 9,300 acres, the great majority represent very small sites; many are just one acre or smaller.

Also, as many as 4,600 of these 9,300 acres (49 percent) are not even available to purchase and use (that is, the owners simply do not want to sell their land). This fact makes it unreasonable to include those acres in the inventory, because doing so implies availability.

Finally, most of those acres identified as buildable have serious development constraints (i.e. wetlands, lack of adequate utilities, sloping topography, poor configuration, environmental contamination, undesirable location, etc.), making them impractical to use and/or too expensive to correct for new construction.

There is only one sector of Portland that has significant industrial lands available for sale and new development. The largest inventory of such lands (approximately 300 acres) is located along Highway 26 in the Beaverton-to-Hillsboro corridor. However, the great majority of firms prefer to locate on or near the major north-south spine of Portland (Interstate 5), or on the east-west I-84 corridor. These routes allow quicker and less costly travel within the Portland area and beyond. Also, they provide the easiest routes to the Port of Portland’s marine terminals on the Willamette and Columbia rivers and the Portland International Airport.

Here’s another way to address the real issue here: If a local or new company wants to purchase, say, a 5- to 10-acre industrial-zoned site along the I-5, I-205 or I-84 freeways in the Portland area (from Wilsonville north to the Columbia River, or east from state Route 217 along I-84 to Troutdale), the list would include no more than six available ready-to-develop land sites. If the need was for a site 10 to 20 acres, the list would include no more than two parcels. And for sites of 20 acres and larger, there would be no list, because no ready-to-develop sites of that size exist today in these corridors.

Why should the citizens of Portland and the state of Oregon be concerned about this? Because a lack of land sites available for local firms looking to expand and others eager to enter our marketplace conveys a lack of commitment to business development and the creation of jobs. Such a realization by companies will drive them out of the area, to seek land sites (and more business-friendly environments). This is true at any time, in good and not-so-good economic times.

Here is what our civic leaders (both in Portland and throughout all Oregon communities) need to do now, to address this very real problem:

Remember that “quality of life” starts with a job, for every Oregonian.

Recognize that current land-use laws within Oregon are broken, slowing the creation of new lands for expansion and new development, which hinders job creation, which hinders quality of life for us all.

Stop talking about the problem. Identify the real problem and take steps to fix it … sooner rather than later.

Create an accurate inventory of “truly usable, truly available, ready to develop” industrial-zoned land sites.

Recognize the need for a sufficient inventory of these sites at all times within each community’s UGB, to meet the always-present demand for land parcels that will surely grow as the economy turns upward.

Commit financial resources to providing urban services (utilities, streets, etc.) to make these land sites “ready to go” for each expanding or new company.