How has Oregon's land use planning system affected property values?

http://www.sciencedirect.com/science/article/pii/S0264837711000469

Abstract: Oregon's landmark land use planning system has been criticized for imposing large negative effects on landowners’ property values, although evidence to support these claims has been lacking. This paper examines longitudinal data for undeveloped parcels since before adoption of the planning system. The sample includes parcels under different land use regulations, and it compares Oregon to Washington. The results indicate generally that property values have increased at similar rates both inside and outside urban growth boundaries, and across parcels zoned for different uses and across state lines. The results are consistent both with theory and with other studies indicating land use regulations can have positive, neutral or negative effects.
 

Highlights:

► The effects of land use regulations on property values in Oregon are evaluated.

► “Before-and-after” data covering 35 years are examined in Oregon and Washington.

► Results find property values have risen at similar rates inside and outside urban growth boundaries. ► Results find property values have risen similarly across zoning types and state lines.
 

Many states in the USA attempt to manage urban growth so that development is directed to urban areas equipped to accommodate development, and rural lands are preserved for resource and other non-urban uses. The state of Oregon is entering its third decade of what many commentators describe as the nation's most aggressive urban growth management programme administered statewide. This article reports a recent evaluation of the effectiveness of the state urban growth management policies as they are implemented by the metropolitan Portland area. The metropolitan Portland area contains the largest population, employment and land base within a single urban growth boundary in the USA. Using primary data collection and analysis, the effectiveness of the urban growth management and resource land preservation effort is assessed. Nearly all regional development has been directed to the urban growth boundary and away from resource lands. Many problems with administration are found, however. Policy implications are suggested.

...

In Lane County Oregon data show a large difference between real per-acre property values inside and outside the Urban Growth Boundary (UGB). By 2002, this difference was $24,894 per acre. [This implies] that the UGB, by limiting development opportunities, has greatly reduced the value of parcels outside the boundary.  However, this conclusion is not necessarily warranted. While the current average value of land inside the UGB is higher than that outside, the same was true in 1965. The differences in values in 1965 cannot be due to the UGB, as it had not been designated at that time. They likely were due to locational advantages, particularly proximity to the city center. The average distance to the Eugene city center for our sample of parcels outside the UGB is more than twice that for those inside the UGB.

... 

Location relative to the UGB is a relatively coarse filter. High-density residential development is not necessarily permitted on all parcels within the UGB. Thus, we also evaluated the effects of different zoning classes. For the parcels in our sample, the highest density residential zoning category (a maximum of 14 single-family housing units per acre) was low-density residential zoning (R-1). Residential housing development is allowed on parcels zoned rural residential (RR), but at lower densities (in our sample, either 5- or 10-acre minimum lot size). Finally, exclusive farm use (E) and forest lands (F) zoning are very restrictive in terms of housing development.  For example, dwellings may be constructed on EFU land only if they are directly related to the agricultural enterprise.

...

Land with R-1 zoning has the highest average value in 2002, in large part because of its proximity to the city center. This is followed by land with RR zoning, E zoning, and F zoning. This suggests that zoning restrictions have not greatly reduced property values. Land that eventually was zoned R-1 already had the highest average per-acre value in 1965: $1266 per acre, compared to $389 per acre (RR), $504 per acre (E), and $210 per acre (F). Like parcels located inside the UGB, R-1 land tended to have locational advantages such as proximity to the Eugene city center.

We compared the growth in land values for each zoning designation relative to values prior to implementation of land use regulations. For each subsample, we took the 1965–1972 average value as the base and computed the increase in value in each period relative to that base. The highest rates of  appreciation were realized on land with F zoning. By 2002, the value of this land had grown about 200 percent more than land with the least restrictive zoning (R-1). A high growth rate was also seen on land with RR zoning. The lowest growth rate was on the developable lands (R-1 zoning).

...

In Jackson County as expected, parcels with the least restrictions on residential housing construction have the highest average values in 2005. However, the growth in average land values over the 1965–2005 period was greatest for parcels with OSR and WR zoning. The average value of parcels with OSR and WR zoning relative to their 1965 value was 1,160 percent and 1,602 percent, respectively.

For RR and EFU parcels, the 2005 value was about 530 percent of the 1965 value. Thus, properties with OSR and WR zoning appreciated more by 2005 than properties with RR and EFU zoning. A similar result was found in Lane County.

by William K. Jaeger 1, Andrew J. Plantinga 1, and Cyrus Grout 2
1. Department of Agricultural and Resource Economics, Oregon State University, United States; 213 Ballard Extension Hall, Corvallis, OR 97331, United States. Tel.: +1 541 737 1419.
2. INRA (French National Institute for Agricultural Research), France
Land Use Policy via Elsevier Science Direct www.ScienceDirect.com
Volume 29, Issue 1, January 2012, Pages 62–72
Also see: http://arec.oregonstate.edu/sites/default/files/faculty/plantinga/jaeger_plantinga_grout_2011_land_use_policy.pdf
Keywords: Land use regulations; Property values; Urban growth boundaries; Land use planning

Valuing Green Infrastructure in Portland, Oregon

http://www.webmeets.com/files/papers/AERE/2011/74/GreenStreets-5-24-2011.pdf
Abstract: This study uses the hedonic price method to examine if proximity, abundance, and characteristics of green street facilities affect the sale price of single-family residential properties in the city of Portland, Oregon. Different methods for measuring proximity and abundance are explored with distance based on street network, and abundance of green streets at the census tract and census block level, producing statistically significant results. Sale prices increase as distance from the nearest green street facility increases although the magnitude of this effect is small. Preliminary results find that older green streets (10 years+), and those with a large number of trees (7 or more), have a positive effect on the sale price of nearby properties.

Over the past 20 years Portland has invested $1.4 billion in physical infrastructure projects to reduce combined sewer overflows. These projects, which are scheduled to be completed in December 2011, will reduce the number of overflows to the Willamette River to an average of four times each winter and once every third summer (Portland Bureau of Environmental Services 2011). Projects are funded, in large part, by Portland’s combined sewer/water bills, which are amongst the highest in the country (Frank 2011). Further rate increases to fund large capital projects may not be politically feasible, so in 2008 the city launched a new strategy, the $55 million “Grey to Green” program, to control stormwater runoff. Program goals include planting 33,000 yard trees and 50,000 street trees, adding 43 acres of ecoroofs, controlling invasive plant species, purchasing over 400 acres of natural areas, and constructing 920 new green street facilities.
...
Green streets are a low-impact development technique that use “vegetated facilities to manage stormwater runoff at its source” and include curb extensions, street planters, and rain gardens as well as “simple” green streets, which involve changes to existing planting areas between curbs and sidewalks.... Additional benefits attributed to these facilities include increased property values, traffic calming, better bike access, enhanced pedestrian safety, and added green space and wildlife habitat. These facilities “are more cost-effective than piping stormwater to a treatment plant” ...and are increasingly being promoted by city managers as an effective means for controlling stormwater runoff.

While green space and wildlife habitat have been estimated to increase the sale price of single-family residential properties (Donovan and Butry 2010; Mahan, Polasky, and Adams 2000; Netusil 2006), literature examining the relationship between green street facilities and the sale price of single-family residential properties is extremely limited. Ward et al. (2008) estimate that properties located in low-impact development project areas in Seattle, Washington sold for 3.5-5 percent more than properties in the same zip code located outside project areas. Williams and Wise (2009) reach the opposite conclusion finding that lots in Gainesville, Florida with low-impact development stormwater systems are valued less than lots that use conventional approaches.
...
Home characteristics are of the expected sign and magnitude across specifications—a property’s sale price is estimated to increase at a diminishing rate as lot size and building square footage increase. Additional full and half bathrooms, increases in elevation (a proxy for views), and neighborhood characteristics such as percentage white and median income at the census tract level, are also found to have a significantly positive effect on sale price. Land cover variables on a property and in surrounding buffers are included to avoid omitted variable bias because green streets are often located in areas with a high percentage of impervious surface area.

Tree canopy on a property, and in surrounding buffers, is found to have a positive but diminishing effect on a property’s sale price; water, which is only present in the 200-foot to ¼ mile and ¼ mile to ½ mile buffers, has a large and significant effect on sale price.
...
The economic magnitude of proximity, however, is small—increasing a property’s distance from a green street by 1,000 feet is estimated to increase its sale price from $430 (1/4 mile street network) to $851 (1/4 mile Euclidean).
...
The EPA estimates that between $331 and $450 billion of investment is needed over a 20-year period (2000 to 2019) to replace or update the existing sewer infrastructure in the United States.
...
by Noelwah R. Netusil 1, Zachary Levin 1 and Vivek Shandas 2
1. Reed College, Department of Economics, 3203 SE Woodstock Boulevard, Portland, Oregon 97202
2. Portland State University, Nohad A. Toulan School of Urban Studies and Planning, Portland, Oregon 97201
Association of Environmental and Resource Economists www.aere.org/ 2011 Summer Conference Seattle, Washington http://www.webmeets.com/AERE/2011/
June 10, 2011
Keywords: low impact development; green streets; hedonic price method; stormwater; Portland, Oregon

Plutonic Power and GE Achieve Commercial Operations at British Columbia’s Largest Wind Farm

http://tiny.cc/xb6u9
Plutonic Power Corporation (TSX: PCC) and GE Energy Financial Services, a unit of GE (NYSE: GE), have achieved commercial operations at their second major renewable energy project, British Columbia’s largest wind farm, a major milestone in their growth collaboration. The Dokie Wind project is now fully operational, providing clean energy to BC Hydro under a 25-year Electricity Purchase Agreement (EPA). Plutonic’s and GE’s Dokie General Partnership has received confirmation from BC Hydro that the project has achieved commercial operation as of February 16, 2011, thereby meeting its guaranteed commercial operation date commitment under the EPA.

During 13 months of construction, GE and managing partner Plutonic oversaw erection of 43 wind turbines, construction of an electric substation, installation of seven kilometres of transmission lines, and created more than 200 construction and permanent jobs to finish the C$228 million project— Plutonic’s and GE Energy Financial Services’ first Canadian wind farm. The project is located 1,100 kilometres northeast of Vancouver near Chetwynd in the foothills of the Canadian Rocky Mountains, an area with world-class wind speeds
...
The Dokie Wind project is capable of generating 320,000-340,000 MWh per year—enough energy to power about 34,000 homes. The project helps British Columbia reach its goal of meeting growing energy needs through the development and use of clean or renewable electricity. In November 2010, the companies began operation of their East Toba River and Montrose Creek project, British Columbia’s largest run-of-river hydroelectric power plant.
...
Link to photos and b-roll: http://www.plutonic.ca/s/DokieWindArchive.asp
GE www.GE.com
Press Release dated March 2, 2011

Wind Farms Mean Money for Sherman County, Oregon - Money Blows in to a Patch of Oregon Known for Its Unrelenting Winds - NYTimes.com

http://www.nytimes.com/2011/05/31/us/31wind.html
According to Lee Van Der Voo writing in the May 30, 2011 New York Times

It pays to live in Sherman County: $590 a year.

In this sparsely populated landscape south of the Columbia River Gorge, annual checks for that amount are local residents’ share of a windfall brought by the growing wind energy industry. In an area otherwise dominated by wheat farms, hundreds of 300-foot wind turbines now generate electricity and cash.

“Wind is the only thing that is going to save rural Oregon,” said Judge Gary Thompson of Sherman County Court, “especially since all the timber is gone and the sawmills and all that are closing down....”

The Columbia Gorge has been like an expressway for hard-blowing wind since long before the turbines arrived. ...

Sherman County, which earned $315,000 in property taxes from the first wind farm in 2002, raked in $3 million from wind farms in 2010. The bounty, while mostly flowing to the farmers who lease their land for the turbines, also benefits the public. Taxes, fees and assessments on more than 1,000 megawatts of wind turbine capacity have brought $17.5 million in nine years to a county with just 1,735 residents.

... At Sherman Junior/Senior High School in Moro, wind money paid for new computers, musical instruments, robotics equipment, portions of a greenhouse and a new teacher to instruct the most gifted of its 124 students last year.
...
Judge Thompson said the payments were intended to reward residents who have made no financial gains from wind energy development, but whose views of Mount Adams and the county’s stunning landscape now include a panorama of turbines.

“It’s modeled after a lot of Alaska compensation,” Judge Thompson said. “There are a lot of people who live in the county who are not necessarily going to benefit from the renewable energy...”

Such dividends were once unique to Alaska, where residents receive annual payments as a share of the revenue from oil flowing through the 800-mile Trans-Alaska Pipeline.

Every Sherman County head of household who has owned property for more than a year qualifies to receive money. Though the county can afford more, Judge Thompson said it decided to keep the checks lower than $600 to spare two clerks from having to file hundreds of related tax forms.
...
The McCulloughs’ earn 4.1 percent of the gross revenue from 15 wind turbines on their property, or about $5,500 a year for each turbine. The payments increase over time, as land values inflated by the turbines decline with their age.

Gorge communities benefit from their nearness to power transmission lines that connect to California. Until 2010, Oregon also offered attractive incentives for wind companies, allowing tax credits of up to $11 million toward wind farms costing $20 million or more, credits that could be sold before construction for cash. Counties like Sherman also have the authority to waive millions in local property taxes, negotiating lower taxes in exchange for special fees and payments.

Critics say that the incentives are overly generous and that they take money from hard-pressed state budgets. In Sherman County, however, the arrangement has helped build a library and two new city halls, sewers and a bridge.

Residents say the biggest challenge brought by the wind industry is simple jealousy. Because the northern part of the county is windier, some farmers in the south feel shorted.

A corporation, Praise the Wind, served as the vehicle for northern farmers looking to attract wind developers. After securing the rights to blocks of land, Praise the Wind negotiated leases, building in provisions like weed control, fencing and penalties for crop damage. The corporation now manages payments and acts as a liaison with the wind companies.

... Cheryl Woods, Praise the Wind’s chief financial officer said “because it’s getting more and more expensive to farm and the margin is getting narrower and narrower.” Ms. Woods said annual royalty payments of between $5,500 and $7,800 per turbine have saved some farms.

The turbines have also meant more jobs, officials say. The Columbia Gorge Community College has retooled its electrical engineering department into a renewable energy technician program that has trained 135 students from Sherman and surrounding counties. Judge Thompson said the industry was now Sherman County’s largest employer.

By LEE VAN DER VOO
The New York Times www.NYTimes.com
May 30, 2011
FOR FULL STORY GO TO:
http://www.nytimes.com/2011/05/31/us/31wind.html