Category: Land Use

Three-people-holding-the-word-NO!-over-their-faces-cm

Voters Should Reject Ballot Measure 26-203

By Eric Fruits, Ph.D.

By now, Oregon voters have received their ballots for the November 5 election. One of the items is Measure 26-203: a $475 million bond measure by Metro, the regional government for the Portland area.

Metro wants the money so it can buy more land for its so-called parks and nature program, a program that has shifted from providing parks for people to more vague and speculative objectives.

In Metro’s own words, the initial promise in 1995 was to “provide areas for walking, picnicking and other outdoor recreation.” This year’s measure now gives only passing mention to parks. And, it makes no promises of new parks, only preservation and maintenance of existing parks. In terms of bang for the buck, that’s a lot of bucks but not much bang.

Despite Metro’s earlier promises to provide parks for people, the agency has opened only seven parks and natural areas to the public over the last quarter-century. In some cases, promised parks never arrived.

Metro has about $30 million still sitting in its parks and nature bond funds, and it has an operating levy that runs through 2023. Voters should reject Measure 26-203 and urge Metro to use the money it already has to turn some of the land it’s already acquired into the parks that people demand.

Eric Fruits, Ph.D. is Vice President of Research at Cascade Policy Institute, Oregon’s free market public policy research organization.

Click here for PDF version:

10-23-19-Voters_Should_Reject_Ballot_Measure_26-203PDF

Read Blog Detail
Park-Closed-cm

Enough Is Enough: Voters Should Reject Metro’s Bond Measure

By Eric Fruits, Ph.D.

By now Oregon voters have received their ballots for the November 5 election. One of the items in the Portland region is Measure 26-203: a $475 million bond measure by Metro, the regional government for the Portland area. Adding in interest and other costs, Measure 26-203 will raise the region’s property taxes by about $60 million a year. Voters should say no to this measure.

Metro wants the money so it can buy more land for its so-called parks and nature program, a program that has shifted from providing parks for people to more vague and wide-ranging objectives.

Metro’s initial promise in 1995 to “provide areas for walking, picnicking, and other outdoor recreation” has changed to 2019’s bond measure promise to “protect water quality, fish, wildlife habitat, natural areas.” The 1995 ballot title mentioned parks eight times. The measure before voters now gives four passing mentions to parks. And, it makes no promises of new parks, only preservation and maintenance of existing parks.

Hidden lands, missing parks

Technically speaking, many of the natural areas are open to the public. More realistically, Metro makes great efforts to discourage public access. For example, a Metro attorney indicated to Cascade Policy Institute staff that many of Metro’s lands are not listed on its website specifically to prevent or discourage public access.

Even supporters of Measure 26-203 complain that most of Metro’s properties are out-of-reach. In three different languages in this year’s Voters’ Pamphlet, they conclude Metro’s acquisitions “exist as places on a map but not places you can actually go.”

In fact, Metro itself reports that more than 80% of the acres purchased with earlier bond funds are outside the region’s urban growth boundary. Because the UGB defines where most of the region’s population lives, much of this publicly owned land is far away from the public. For example, Metro’s much anticipated Chehalem Ridge nature park is located down a narrow, winding, gravel road more than seven miles from the nearest TriMet stop.

Despite Metro’s earlier promises to provide parks for people, the agency has opened only seven parks and natural areas to the public over the last quarter century. In some cases, promised parks never arrived. In 2005, Metro promised “at least four future public access points” for canoeing, kayaking, fishing, and picnicking. Since then—14 years later—only the Farmington Paddle Launch has been opened.

Over the years, Metro has spent more than $7 million to acquire 680 acres in the Clear Creek area, 20 minutes east of Oregon City. In 2007, Metro concluded the holdings have “such potential as a park.” Despite Clear Creek’s potential as a park, this year Metro indicated it did not have “any public access plans developed for Clear Creek Natural Area.” The site is now virtually off-limits to the public and does not appear on Metro’s parks and nature maps.

Vague promises, little accountability

Protection, preservation, and restoration of natural areas, watersheds, rivers, and streams for wildlife and fish are key components of Measure 26-203. These were also key components of the 1995 and 2006 bond measures.

Even so, Metro has provided scant information documenting its protection, preservation, and restoration efforts. While tree planting, weed removal, and volunteer efforts are mentioned in some Metro publications since 1995, the voter-approved operating levies were earmarked for restoration efforts. Metro reports that by 2018, only about 14% of the land it has acquired has been restored.

Enough is enough, vote no on Measure 26-203

Metro’s parks and nature bonds have been in place for nearly a quarter century. Over that time the agency has spent about half a billion dollars and acquired more than 14,000 acres of land. Metro has clear challenges managing the land it already holds. Promised parks have not been built, and some have been wiped off the map. Restoration efforts have not kept pace with property acquisitions.

Metro has about $30 million still sitting in its parks and nature bond funds, and it has an operating levy that runs through 2023. Voters should reject Measure 26-203 and urge Metro to use the money it already has to turn some of the land it’s already acquired into the parks that people demand.

Eric Fruits, Ph.D. is Vice President of Research at Cascade Policy Institute, Oregon’s free market public policy research organization. A version of this article appeared in The Portland Tribune on October 22, 2019.

Click here for PDF version:

19-23-Enough_Is_Enough-Voters_Should_Reject_Metro’s_Bond_MeasurePDF

Read Blog Detail
Bare-Trees-and-Ferns-cm

Press Release: Cascade Policy Institute Publishes Comprehensive Study of Metro’s Parks and Nature Program

October 15, 2019

FOR IMMEDIATE RELEASE

Media Contacts:
John A. Charles, Jr.
Eric Fruits, Ph.D.

PORTLAND, OR – In the next week or so, Portland area voters will receive their November ballots. One of the items is Measure 26-203: a $475 million bond measure by Metro, the regional government for the Portland area. Metro wants the money so it can buy more land for its so-called parks and nature program. Measure 26-203 will raise the region’s property taxes by about $60 million a year. The $475 million request is larger than the two previous Metro natural areas bonds combined, which were $135.6 million dollars in 1995 and $227.4 million dollars in 2006.

Cascade Policy Institute has published a comprehensive study of Metro’s parks and nature program, with the following conclusions:

  • Metro’s natural areas program began as a vision to increase and preserve parks and natural areas to a region facing increased population growth and density.
  • As the program evolved, the mission moved from providing parks for people to locking land away from the community that paid for it. The initial promise in 1995 to “provide areas for walking, picnicking, and other outdoor recreation” has shifted to the 2019 bond measure promise to “protect water quality, fish, wildlife habitat, natural areas.”
  • Over the nearly two decades since the first parks and nature bond measure, Metro has made, broken, and delayed its promises to voters.
    • In 2002, Metro imposed a solid waste tax enacted to pay for the operating costs of new parks. In 2006, Metro diverted the parks money into Metro’s general fund. In subsequent years, Metro put two operating levies on the ballot, increasing property taxes.
    • Chehalem Ridge was pitched as a regional park for Metro’s west side, but current plans are for a few miles of walking trails and a small picnic area. The park is more than seven miles from the nearest TriMet stop.
  • After spending hundreds of millions of dollars and acquiring more than 14,000 acres of land, less than 12 percent of Metro’s acquisitions are accessible to the public.
  • More than 80 percent of the acquisitions are outside the UGB.
  • Much of the land acquired by Metro was never at risk of development because Metro manages the region’s Urban Growth Boundary.
  • Metro’s restoration objectives, efforts, and results have been opaque and uncertain. Metro has provided no measurable documentation of changes to water quality or fish and wildlife populations.

Information was obtained from publicly available resources, interviews, and on-site visits to every natural area and nature park identified by Metro. Cascade paid thousands of dollars in public records requests to Metro.

Cascade’s report is available for download.

For more information on Measure 26-203 and Metro’s parks program, contact Cascade Policy Institute at 503-242-0900.

# # #

Contact Eric Fruits or John Charles at 503-242-0900 or by email at eric@cascadepolicy.org or john@cascadepolicy.org for more information or to schedule an interview.

About Cascade Policy Institute:

Founded in 1991, Cascade Policy Institute is a nonprofit, nonpartisan public policy research and educational organization that focuses on state and local issues in Oregon. Cascade’s mission is to develop and promote public policy alternatives that foster individual liberty, personal responsibility, and economic opportunity. For more information, visit cascadepolicy.org.

###

Read Blog Detail
walkway-with-street-lamp-in-garden-cm

Hidden Lands, Unknown Plans: A Quarter Century of Metro’s Natural Areas Program

By Vladislav Yurlov, Helen Cook, and Micah Perry with Eric Fruits, Ph.D., research advisor

  1. Executive summary 

In June 2019, Metro’s Council referred to voters a $475 million bond measure for the acquisition and restoration of natural areas as well as future recreational opportunities. If passed, the measure will cost the region’s taxpayers approximately $60 million a year in property taxes. The $475 million request is larger than the two previous Metro natural areas bonds combined, which were $135.6 million dollars in 1995 and $227.4 million dollars in 2006. 

Cascade Policy Institute researched Metro’s management of its natural areas program. Information was obtained from publicly available resources, public records requests, interviews, and on-site visits to every natural area and nature park identified by Metro. Several areas were more thoroughly examined as case studies because of their location, size, acquisition price, and length of time owned by Metro. These case study areas comprise about 20 percent of the land acquired by Metro in the 1995 and 2006 bond measures. 

Cascade’s findings lead to the following conclusions: 

  • Metro’s natural areas program began as a vision to increase and preserve parks and natural areas to a region facing increased population growth and density. With increasing population density, local governments would offset the loss of backyards with more parks to meet, play, and offer “nature in neighborhoods.” It was an expensive vision that would require hundreds of millions of dollars. 
  • As the program evolved, the mission moved from providing parks for people to locking land away from the community that paid for it. The initial promise in 1995 to “provide areas for walking, picnicking, and other outdoor recreation” has shifted to the 2019 bond measure promise to “protect water quality, fish, wildlife habitat, natural areas.” Parks are to be “maintained” rather than built, expanded, or improved. 
  • Over the nearly two decades since the first parks and nature bond measure, Metro has made, broken, and delayed its promises to voters.  
  • Metro promised that a solid waste tax enacted to pay for the operating costs of new parks would protect residents from additional taxes for the same purpose. Nevertheless, it swept that money into Metro’s general fund and put two operating levies—increasing property taxes—on the ballot.  
  • Metro assured the region that Clear Creek would become a regional park. More than a decade later, it has no plans to make the area publicly accessible and has removed it from its maps of parks and natural areas. 
  • Chehalem Ridge was pitched as a regional park for Metro’s west side, but current plans are for a few miles of walking trails and a small picnic area.  
  • After spending hundreds of millions of dollars and acquiring more than 14,000 acres of land, less than 12 percent of the acquisitions are accessible to the public.  
  • Even the land that is open to the public is out of reach of many Portland residents.  
  • Seventy percent of Metro’s acquisitions have been outside Metro’s jurisdiction.  
  • More than 80 percent of the acquisitions are outside the Urban Growth Boundary 
  • A statement in the 2019 Voters’ Pamphlet from a group of bond supporters admits that many of Metro’s acquisitions “exist as places on a map but not places you can actually go.”  
  • Much of the land acquired by Metro was never at risk of development because Metro manages the region’s UGB 
  • Metro’s restoration objectives, efforts, and results have been opaque and uncertain. Metro has provided no measurable documentation of changes to water quality or fish and wildlife populations.  
  • Metro has promised a strategy focused on racial equity. Even so, minority communities’ desire for parks that serve as “gathering places, places to eat, security, and places for kids to play, exercise and cool off during the summer” have been overlooked in favor of natural areas amenable only to “passive recreation.” 

Metro has acquired more land than it can manage. The focus for the next decade should be on making current lands available for public use. Metro’s largest planned park—Chehalem Ridge near Gaston—has been in Metro ownership for nine years, and there is still no public access. Metro also owns about 1,400 acres in the Sandy River Gorge. These holdings are not shown on any of Metro’s parks and nature maps and Metro has no plans at all to make these properties available for swimming, boating, hiking, or family cookouts. Metro needs to turn these and other areas into parks its residents actually use before seeking more money to acquire more land.

Vladislav Yurlov, Helen Cook, and Micah Perry are Research Associates at Cascade Policy Institute. Eric Fruits, Ph.D., is Vice President of Research at Cascade.

Click here for the full report in PDF:

2019-10-Hidden_Lands_Unknown_Plans_A_Quarter_Century_of_Metro’s_Natural_Areas_Program

Read Blog Detail
Sunny-Path-Through-Sugar-Maple-Trees-in-Autumn-cm

Where Is Our Metro Park at Chehalem Ridge?

By Helen Cook

This summer, I was walking on an old logging road in the middle of thick forest, not a person in sight. The only sign of human activity were signs nailed to the trees prohibiting fungus-collecting. A tattered strand of red tape displaying the print, “Invasive Species,” waved in the wind.

You wouldn’t know it since no signage exists, but I was hiking through Metro’s biggest natural area: Chehalem Ridge. In fact, you wouldn’t know this was public property. The trailhead is on the side of a gravel road after driving miles through rural countryside. A gated fence blocks the entrance alongside a sign forbidding a long list of activities, including dog-walking. (Ironically, later in the day, I observed a couple walking their dog in Chehalem. There was no one there to stop them.)

Metro bought Chehalem Ridge Natural Area in 2010. The land is nestled between Forest Grove and Gaston, about a 20-minute drive to Hillsboro. The size of the parcel is actually bigger than Central Park in New York. In other words, this land’s potential is not that of a typical neighborhood park.

But where is our park? Metro likened the area to the future “Oxbow Regional Park,” whose popularity is due in part to its camping sites, twelve miles of trails, and picnic areas.

The regional government is in no hurry to fulfill this promise. The land has purportedly undergone restoration for nine years. Yet when I asked Metro for evidence, few numbers were given. The only indication of restoration on the website are whimsical “field notes” by a Metro Senior Scientist. Some mentions of thinning forest and planting shrubs are sporadically found in updates. But I was unable to find proof of water quality restoration, which is one of the most important reason cited for acquiring the land.

So if Chehalem Ridge is really Metro’s next big success story, why hasn’t it become a reality? It’s unclear why we don’t see a park since Metro had several opportunities to develop the area.

Voters approved a $226 million dollar bond for parks and nature in 2006. This was supplemented by a $50 million dollar levy for maintenance in 2013 and another levy in 2016. But Metro is asking for $475 million dollars more in a 2019 bond, some of which is promised to Chehalem Ridge. All of this money comes from taxpayers, but Metro seems in no rush to return the favor.

Even when Metro eventually breaks ground on Chehalem, none of this money will go to the biggest obstacle: the roads. The winding roads leading to the park are extremely difficult to drive with traffic. But Metro has no jurisdiction to repave the roads. Washington County, which does have this authority, certainly has no intention of improving roads in the area. Just to be sure, I asked them. A definitive no was the immediate answer, despite the fact that Metro will be charged an estimated $2 million Transportation Impact Fee by Washington County when construction permits are issued.

During the next several years, you will not see campsites, twelve miles of trails, playgrounds, or access for low-income individuals who can’t drive to the park. What Chehalem’s master plan does promise you is three miles of multi-use trails, a trailhead, parking, and restrooms. To put it bluntly, you are promised a remote trail that’s less useable than your average neighborhood park.

I suggest taxpayers contact Metro to ask that it live up to the promise of an “Oxbow Regional Park.” If Metro wants voters to maintain a higher tax rate with this proposed bond, voters should demand that original promises be kept.

Maybe with more accountability, Metro would live up to its slogan, “Promises Made, Promises Kept.” But as of now, I’m skeptical. That’s why I plan to vote “No” this November on Metro’s newest $475 million bond. Metro needs more transparency, not more money.

Helen Cook is a Research Associate at the Portland-based Cascade Policy Institute, Oregon’s free market public policy research organization. She can be reached at info@cascadepolicy.org. A version of this article appeared in the Portland Tribune on October 4, 2019.

Click here for PDF version:

19-20-Where_Is_Our_Metro_Park_at_Chehalem_RidgePDF

Read Blog Detail
hiking-trail-cm

Metro Measure 26-203 Land Grab

By Eric Fruits, Ph.D.

Soon, Portland area voters will receive their November ballots. One of the items is Measure 26-203: a $475 million bond measure by Metro, the regional government. Metro wants the money so it can buy more land for its so-called parks and nature program. Measure 26-203 will raise the region’s property taxes by $60 million a year.

Cascade Policy Institute urges a vote NO on Measure 26-203. Voters have already approved two such measures in 1995 and in 2006. Most of that money has been spent to buy up more than 14,000 acres of land. Yet, less than 12% of these lands are available for public use. This summer, a Metro lawyer told Cascade staff that they don’t want the public to know where the park land is because they don’t want the public to visit it.

More than two-thirds of the land bought with bond money is outside Metro’s jurisdiction and outside the Portland Urban Growth Boundary. That means most voters will never use Metro parks because they are so far away—even if the areas were open to the public.

In some ways, most of Metro’s nature properties are Oregon’s own Area 51—they’re owned by the government, they don’t show up on maps, and no one knows what’s going on there.

It’s time to put an end to Metro’s expensive land grab.

Eric Fruits, Ph.D. is Vice President of Research at Cascade Policy Institute, Oregon’s free market public policy research organization.

Click here for PDF version:

9-18-19-Metro_Measure26-203_Land_GrabPDF

Read Blog Detail
House-under-construction.--cm

Public Debt for Public Housing

By Vlad Yurlov

In the 2018 general election, voters approved a bond measure that enabled Metro to borrow about $652 million for low-income public housing in the tri-county area. This money will be given out to localities within Metro. With the minimum of 3,900 housing units to be built, the price-tag would be more than $165,000 per unit.

When pressed for completion times for this project, a high-level Metro staffer stated new units can be expected to be used in eight to ten years. This schedule should not surprise anyone who has dealt with government bureaucracies, but a decade is a long time to wait for a crisis we’re having today.

For comparison, more than 6,700 housing units were constructed per year between 2010 and 2018 in the tri-county area, based on the U.S. Census Annual Housing Estimates. This means that even a target of 3,900 units would be roughly 60% of just one year’s worth of private construction. In addition, if Metro does build homes, private companies have less incentive to build, thereby compounding the current crisis.

A good government delivers public services on time and on budget. Right now, Metro is taking the bucks, without making much of a bang.

Vlad Yurlov is a Research Associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

Click here for PDF version:

7-3-19-Public_Debt_for_Public_HousingPDF

Read Blog Detail
sunrise-over-Mt-Hood-at-Trillium-Lake-cm

Metro Wants More Money—For Parks You May Never See

By Helen Cook

How much would you be willing to spend to buy parkland that would ban your dog?

Metro hopes Portland area taxpayers will spend $475 million to buy land kept from public use for many years. That’s the purpose of a Metro bond measure on the ballot in November.

Much of the new tax money would go to acquiring natural areas that will be unusable by the public for an unspecified amount of time. If this feels like déjà vu, that’s because Metro passed a similar bond measure in 2006.

Rather than let the previous tax increases sunset, Metro wants more money, ostensibly to create parks for historically underserved communities. But much of the land Metro plans to buy is located far from the communities it’s intended to serve.

Metro also claims the new bond measure won’t increase taxes. This is not true. If the bond measure fails, property owners’ tax bills will go down. A “yes” vote is a vote for higher taxes. A “no” vote will save the average homeowner about $48 a year.

Metro’s new bond is neither the beginning nor the end of a cycle of buying remote natural areas that won’t allow recreational uses. Make sure to look for this measure on your ballot in November and vote no.

Helen Cook is a Research Associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

Click here for PDF version:

6-19-19-Metro_Wants_More_Money_For_Parks_You_May_Never_SeePDF

Read Blog Detail

Read My Lips: Metro’s Promises Are Doubtful at Best

By Miranda Bonifield

There’s nothing so permanent as a temporary government program, and nothing is quite as immortal as a temporary tax. Metro promised in 2006 that its parks bond would leave no need for new taxes until 2016. Instead, the money was sent to a general fund and additional taxpayer support was requested in both 2013 and 2016.

Now Metro is planning a new 400-million-dollar bond measure to support expansion of its parks and nature programs. The organization argues that tax rates wouldn’t be raised and that the funds would combat the challenges posed by population growth, climate change, and racial inequity.

What isn’t said is that your property taxes would go down without approval of the new 20-year bond measure. Metro can and probably will want to issue additional bonds and levies in future years, including a potential transportation bond in 2020—meaning that taxes would rise in the long term.

Metro’s auditor found in 2015 that Metro’s land acquisition often lacks clear connection to its long-term goals. This means that not only is Metro stretching for more money, it’s not even entirely sure what it accomplishes by spending it.

Read my lips: Metro’s version of no new taxes is doubtful at best.

Miranda Bonifield is a Research Associate at Cascade Policy Institute, Oregon’s free market public policy research organization. 

Click here for PDF version:

4-3-19-Read_My_Lips_Metro’s_Promises_Are_Doubtful_at_BestPDF

Read Blog Detail
sun-shining-in-a-forest

Oregon Taxpayers Can’t Celebrate $146 Million Debt Service on the Elliott State Forest

By John A. Charles, Jr.

This week our State Treasurer, Tobias Read, issued a press release bragging that investors around the country “stood in line” to loan Oregon $100 million so that Governor Kate Brown could buy part of the Elliott State Forest, which we already own.

According to Treasurer Read, “There was three times more demand than supply” of the bonds, which will be repaid to investors over 20 years at an interest rate of 3.83 percent.

While this may have been a great day for investors, Oregon taxpayers have no reason to celebrate. They will be paying roughly $146 million in debt service on the loan, while getting little in return.

The Elliott is an 82,500-acre forest in Coos and Douglas Counties. It is an asset of the Common School Fund, which means it must be managed for the financial benefit of K-12 public schools. It was once a thriving commercial forest, generating millions of dollars each year for schools. In 1994, it had an estimated market value of $850 million.

Timber harvesting started to decline in the late 1980s due to environmental litigation. By 2014, timber production was so minimal that the Elliott actually started losing money. This immediately caught the attention of the State Land Board, which owns it. Land Board members in 2015—Governor John Kitzhaber, Secretary of State Kate Brown, and Treasurer Ted Wheeler—feared they would be sued for breach of fiduciary trust if they continued to hold onto a money-losing asset.

Seeing no other options, the Board unanimously voted in August of that year to sell the forest and place the proceeds in the Common School Fund, where they could be profitably invested in stocks, bonds, and other financial instruments.

The Board set the market value of the forest at $220.8 million. After a lengthy outreach process, the Board received a bid for that amount in 2016 from a consortium of buyers led by Lone Rock Timber Co.

However, by the time the bid was evaluated in December, the composition of the Land Board had changed. Kate Brown had become Governor, Tobias Read was Treasurer, and Dennis Richardson was the new Secretary of State. At the first meeting of the board in February 2017, both Read and Richardson stated that they had a fiduciary duty to sell the forest so that $220.8 million could be invested in better-performing assets. Gov. Brown reversed her 2015 vote and urged the Board to reject the offer. The final vote was 2-1 in favor of selling the forest.

This infuriated Oregon’s environmental lobby, even though it was their own lawsuits that had turned the Elliott into a liability. After the vote, pressure mounted on Treasurer Read to change his mind.

Two months later, Read reversed himself. He and Gov. Brown decided that instead of selling the forest for $220.8 million, they would retain it and ask the legislature for permission to borrow $100 million to buy part of the Elliott so that it would no longer be required to make money. The $100 million would be placed in the Common School Fund to make up for the lost timber harvest receipts.

Unfortunately, the $100 million loan will require debt service payments of roughly $200 million, and all of it will have to be paid by Oregon taxpayers. Therefore, the benefits to schools of adding $100 million to the Common School Fund will be diluted or possibly exceeded by debt service.

Moreover, the Land Board had no clear idea of which part of the Elliott will be free of the obligation to produce revenue for schools. The $100 million certainly will not “buy” the entire forest; an unknown portion will still have to be managed for profit, if that’s even possible.

Ordinarily, one could expect the State Treasurer to be the adult in the room regarding a cash offer of $220.8 million and the Board’s fiduciary duty to schools, but this is Oregon. It’s so much easier to just borrow money and talk about something else. Tobias Read is giddy that several of the bond buyers were from “socially responsible investment funds.”

Perhaps if he talks long enough about green investing, taxpayers will forget about the $200 million they owe on the loan.

John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.

Click here for PDF version:

19-06-Oregon_Taxpayers_Can’t_Celebrate_146_Million_Debt_ServicePDF

Read Blog Detail

Rent Control Is a Steal

By Miranda Bonifield

Remember that emotional final episode of the now-classic sitcom Friends? As the group reminisces about the New York apartment that served as the stage for most of the show, Chandler tells his newborn child, “This was your first home…and thanks to rent control, it was a steal.”

His comment was more apt than the screenwriters probably realized. Rent control is a steal. It steals incentive from landlords who are interested in providing housing but can’t make ends meet when they’re no longer in charge of their rates. And especially in combination with aggressive anti-sprawl policies cities like Portland are so fond of, it steals housing opportunities from individuals who need them most.

Rather than solving housing problems, studies have found that in the long run, rent control policies increase housing costs and fuel gentrification. In San Francisco, researchers found that landlords frequently turned their apartment buildings into condominiums and invested in higher-value properties—making it even more expensive to live in the city. And unfortunately, landlords are less interested in maintaining rent-controlled apartments, which does nothing for the tenants’ quality of living.

If people are struggling to find housing, the solution isn’t to limit supply and destroy affordability. That just makes things harder. Instead, state leaders should reduce regulations that constrict housing supply, allowing developers to provide the homes Oregonians need so desperately

Miranda Bonifield is a Research Associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

Click here for PDF version:

2-6-19-Rent_Control_Is_a_StealPDF

Read Blog Detail
US-dollar-in-a-money-bag,-small-residential,-house-model-on-table-against-green-nature-background-cm

Press Release: Report shows Oregon’s “smart growth” policies make housing less affordable for Oregonians

FOR IMMEDIATE RELEASE

Media Contact:
John A. Charles, Jr.
503-242-0900
john@cascadepolicy.org

PORTLAND, Ore. – Cascade Policy Institute has released a new report examining the links between anti-sprawl, “smart growth” regulations and increasing housing costs in Oregon. The report measures the extent of supply restrictions in Oregon and their impact on housing prices. It concludes that “smart growth” policies contribute substantially to the decrease in affordable housing and single-family housing options in Oregon.

The report, The Housing Affordability Crisis: The Role of Anti-Sprawl Policy, was written by Randall Pozdena, Ph.D. Pozdena is president of QuantEcon, Inc., an Oregon-based economics consultancy.

Over the last fifty years, many states have adopted “smart growth” or “anti-sprawl” policies. Enough time has elapsed for the effects of these policies to be studied. The evidence shows that many urban areas now have housing prices that make either home ownership or rental increasingly unaffordable.

In the face of resulting “affordable housing crises,” cities and states are currently considering additional regulations and subsidy policies to attempt to provide residents with more affordable housing options. There is virtually no public policy discussion of whether regulatory interventions precipitated the housing crisis in the first place, let alone consideration of abandoning these damaging policies.

In The Housing Affordability Crisis, Pozdena examines the links between anti-sprawl regulations and the spectacular increases in housing costs and the virtual disappearance of affordable housing in many markets. Specifically, he measures the extent of site supply restrictions and its impact on housing prices using an economic model of housing markets, data on the economic conditions in housing markets, and trends in development revealed in satellite inventories of U.S. land uses. At the national level, using state and Metropolitan Statistical Area data, Pozdena concludes:

  1. Twenty-three of the 50 states studied fail to provide housing units at a volume adequate to keep housing prices and incomes growing at a rate consistent with affordability. On average, these states under-provided housing units by 6.4 percent of their current stock of housing units.
  1. Those states that fail the affordability and supply adequacy test are overwhelmingly those with documented adoption of one or more aggressive anti-sprawl growth regulatory initiatives.
  1. Annual housing price inflation exceeded annual income growth by 14 percent each year during the study period in those states that failed to provide housing in sufficient quantity to keep it affordable. Extrapolating the findings to the nation, the housing stock is smaller by as much as 4.5 million housing units than it should have been to preserve affordability.

Cascade Policy Institute President and CEO John A. Charles, Jr. said, “Oregon land-use planners have long pretended that Urban Growth Boundaries and other site restrictions have no real effect on housing supply. Dr. Pozdena’s analysis clearly shows that this is wrong. We cannot solve the housing crisis by simply ‘throwing money’ at public housing projects; growth controls need to be reduced or repealed if we want to make the American Dream affordable.”

The full report, The Housing Affordability Crisis: The Role of Anti-Sprawl Policy, can be downloaded here.

Founded in 1991, Cascade Policy Institute is Oregon’s free-market public policy research center. Cascade’s mission is to explore and promote public policy alternatives that foster individual liberty, personal responsibility, and economic opportunity. For more information, visit cascadepolicy.org.

###

 

Read Blog Detail

Can National Parks’ Operations Be Funded with User Fees? National Park Service Says Yes!

By Rachel Dawson

Whether or not you have ever visited a national park, you have contributed to their budgets by paying a federal income tax. These funds help to pay for operational services like removing trash, operating camp grounds, and maintaining roads.

If you want to enjoy a national park in person, you’ll (usually) also pay an entrance fee. Under the Federal Lands Recreation Enhancement Act, park fees are designated for “repair, maintenance, and facility enhancement related directly to visitor enjoyment, visitor access…” and other visitor services. Under this law, entrance fees do not fund the previously mentioned park operations.

However, the current federal government shutdown changed this. During the shutdown, some of the nation’s most popular parks have used entrance fees to fund necessary operational expenses, due to fear that keeping the parks open during the shutdown would become unsustainable.

This change demonstrates the benefits of giving local park managers more flexibility with the use of visitor fees. Allowing individual parks to have greater control over the use of fees could reduce the parks’ reliance on Congressional (taxpayer) funding allocations, give local staffs more incentive to manage their parks efficiently, and provide a better experience to visitors. That would be an improvement both for the National Parks and for the taxpayers whose money provides for them.

Rachel Dawson is a Research Associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

Click here for PDF version:

1-16-19-Can_National_Parks’_Operations_Be_Funded_with_User_FeesPDF

Read Blog Detail

The Housing Affordability Crisis: The Role of Anti-Sprawl Policy

By Randall Pozdena, Ph.D.

Executive Summary

So-called smart growth policies are advocated as a means of avoiding sprawl.  These policies have at their heart a policy of reducing the availability of land for housing in urban areas. In Oregon and some other states, anti-sprawl policy is implemented by regulations that impose urban growth boundaries (UGBs).  Other regulations impose minimum density policies and others reduce spending on highways and increase spending on transit service—especially light rail—as an alternative.  Advocates of anti-sprawl policies argue that such regulations would allow urban growth to proceed at a lower overall cost.

Many states adopted smart growth policies in the last five decades—enough time for the policies to have demonstrated their purported advantages.  The evidence, at least on the housing front, is that the cost-containment claims have not materialized.  Instead, many urban areas are finding themselves with home prices that make ownership and rental of housing increasingly unaffordable.  Cities and states are thus using or considering additional regulations and subsidy policies to provide their residents with more affordable housing.  There is virtually no discussion of whether anti-sprawl regulatory interventions precipitated the housing crisis, let alone consideration of abandoning the policy.

The purpose of this study is to examine the links between anti-sprawl regulations and the spectacular increases in housing costs and the virtual disappearance of affordable housing in many markets.  Specifically, we measure the extent of site supply restrictions and its impact on housing prices using an economic model of housing markets, data on the economic conditions in housing markets, and trends in development revealed in satellite inventories of US land uses.

We apply the analysis to data from all 50 states and identify those states whose development policies reflect constrained site supply and those that do not.  Because Oregon has among the longest-standing and most aggressive implementations of smart growth land use policy, we pay particular attention to the state, and drill down with analyses at the Metropolitan Statistical Area (MSA) level in Oregon to demonstrate that the state-level findings are corroborated for all of its MSAs.

The primary metrics examined in this study are the rate of housing price appreciation, the degree of rigidity (“inelasticity”) of the supply of new homesites, and the degree to which the housing stock has failed to increase enough to affordably provide additional housing services.  Since we note that the adverse trends in house price inflation and slowing of site supply took greatest effect the last 30 years or so, we scrutinize market behavior subsequent to this period.  Because of the onset of the Great Recession in 2007, however, we estimate our models on this period.  This is because we do not wish to conflate the effects of anti-sprawl policy with the collapse of mortgage markets and home construction that persisted for the next half decade.

After establishing the linkage between constrained site supply and housing prices and affordability, we turn to the evaluation of the various policies that are in place or proposed to redress these problems.  This analysis is performed for the state of Oregon only.  The State’s wide-ranging and aggressive policies and proposals make it broadly representative of the nature, cost, and effectiveness of these policies—both those in place and those recently proposed.  With theory as a guide, and our acquired knowledge of the reactivity of the housing market to various stimuli, we can then opine on the likely effectiveness of these policies.  We also offer our own suggestions.

At the national level, using state and MSA data, we find the following:

  1. Twenty-three of the 50 states studied fail to provide housing units at a volume adequate to keep housing prices and incomes growing at a rate consistent with affordability. On average, these states under-provided housing units by 6.4 percent of their current stock of housing units.
  2. We demonstrate that those states that fail the affordability and supply adequacy test are overwhelmingly those with documented adoption of one or more aggressive anti-sprawl growth regulatory initiatives.
  3. Annual housing price inflation exceeded annual income growth by 14 percent each year during the study period in those states that failed to provide housing in sufficient quantity to keep it affordable. Extrapolating the findings to the nation, the housing stock is smaller by as much as 4.5 million housing units (in 2015 likely) than it should have been to preserve affordability.

Because Oregon has aggressively pursued anti-sprawl policy, it was given special attention in the study.  We found the following:

  1. All eight of Oregon’s MSA housing markets failed the test of affordability and adequacy of supply over the various study periods for which data was available. The estimated total shortfall in supply equals approximately 18 percent of the existing stock—virtually identical to that found for Oregon using state-level data.
  2. We analyzed the current and proposed housing policies of the state of Oregon. At present, proposals include approximately $2.3 billion by the State and the Department of Housing and Urban Development (HUD) to assist housing access and over $600 million in new affordability-related programs. This study finds that there is little hope that these policies can redress the scale and extent of Oregon’s affordable housing problems and, in some cases, may worsen them by burdening developers of housing with new regulations.

In summary, this study finds anti-sprawl policy to have been implemented in a manner that has pernicious effects on housing affordability.  Specifically, regulatory constraints on site supply have caused an on-going crisis of housing supply and affordability.  In many markets, the development of land for housing is regulated too aggressively.  Additionally, existing and new programs for addressing housing affordability rely on other regulation and spending programs that will not have the designed effect of providing affordable housing.  This study strongly recommends, instead, relaxation of regulations that limit the land area available for housing development.  Any residual concerns about sprawl should be addressed by reforming current highway and transit pricing and finance practices, which are known to be economically inefficient.

READ THE FULL REPORT

 

Read Blog Detail

Better Forest Management Can Prevent Oregon WIldfires

By Justus Armstrong

Wildfires in Oregon this summer have burned thousands of acres, resulting in hazardous air quality conditions and the evacuation of hundreds. As our firefighters face these fires, it’s important to examine the policies and practices that may contribute to increased wildfire risks.

Environmental advocates point to carbon-induced climate change as a factor in intensified droughts and longer fire seasons, but dealing with climate change as a means of dealing with wildfires puts the cart before the horse. Wildfires are a cause of carbon emissions more than a consequence, since burning forests release higher amounts of stored carbon. Before addressing the impacts of carbon on our forests, we must address the impacts of poor forest management.

Proposed strategies for preventing wildfires have included clearing overcrowded forests with commercial logging, or focusing the Forest Service budget on prevention today to save money on firefighting tomorrow. These solutions are a start, but the root of the problem exists at the top. The U.S. Forest Service simply doesn’t have the same incentive to take care of Oregon forests as those most affected by wildfires. In addition to reevaluating regulations that hinder controlled burning and forest clearing, Oregon officials can advocate for the decentralization of federal forest management to state, local, or private levels. Rethinking forest management is one step towards preventing future wildfires.

Justus Armstrong is a Research Associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

Click here for PDF version:

9-12-18-Better_Forest_Management_Can_Prevent_Oregon_WildfiresPDF

Read Blog Detail

23 Million Reasons for Metro to Repeal Its Construction Excise Tax

By Jakob Puckett

How much do we have to tax something to make it affordable? You might think that’s counterintuitive, and you’d be right. But that’s exactly what the Portland-area Metro Council is doing with affordable housing through their Construction Excise Tax. So what is this tax? For every construction project valued at over $100,000, Metro taxes 0.12% of its value, with most of the revenue directed to fund grants to plan for affordable housing.

That number may not sound like much, but the Portland City Council also has a Construction Excise Tax, only it’s eight times higher than Metro’s, also for housing land-use planning. So two councils levy the same tax on the same people for the same purpose.

And the money raised rarely goes to constructing housing units. Metro recently approved 10 new grants; and while all of them fund more land-use planning exercises, none of them actually build new housing. This extra paperwork often leads to construction delays, creating an expensive, redundant mess for land developers.

And just how expensive has it been? Metro has renewed this tax twice, raising over $23 million for these projects, which has just made housing construction $23 million more expensive. And, in a city where every dollar put towards new housing counts, that’s 23 million reasons why Metro should repeal its Construction Excise Tax.

Jakob Puckett is a Research Associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

Click here for the PDF version:

8-1-18-23_Million_Reasons_for_Metro_to_Repeal_Its_Construction_Excise_TaxPDF

Read Blog Detail

Private Developers Leading the Way for Affordable Housing

By Rachel Dawson

The Metro Council voted June 7 to place a housing bond measure of $652.8 million for only 3,900 units on the ballot this fall. The regional government estimates the cost of new projects will be around $253,000 per home. But as there is no cap on cost per dwelling, project costs could be much greater. This bond will spend too much money on too few homes. However, private developers in the Portland region have shown it’s possible to build more residences at a lower cost compared with Metro’s proposal.

There is no better example of this than local private developer Rob Justus. With Home First Development, Justus has helped build a total of 431 public units for an average cost of $90,230 since 2011. Home First likes to call this “affordable-affordable” housing. Before a project begins, the company keeps itself accountable by working backwards: They contain the costs of the project so apartments can be rented to tenants at a price that works for them. This philosophy has allowed Home First to increase the number of homes they are able to build.

In concert with the Portland Habilitation Center, Justus built 78 affordable residences in 2015 in Portland at $65,000 per unit. In 2017 he offered to build 1,000 homes in Portland at $85,000 per unit if the city could gather $20 million, but Portland officials rejected this proposal. These homes would have cost 66% less than Metro’s housing bond estimates.

Justus has made low costs possible by building in less expensive neighborhoods and using non-union labor. These homes may not be the largest dwellings in the best part of town, but they are affordable to those in the lower 30% of area median income who are in need of a home.

Along with wages and location, the materials used can greatly affect the price of a project. A Catholic charity attempted to build the complex known as St. Francis Park in 2015 using an inexpensive siding called HardiPlank. When the project went through Portland’s required design review, city regulators decided to choose a more expensive siding, which drastically increased the cost of the project. This additional cost caused the city to increase taxpayer subsidy to the building. Ironically, in 2006 a housing complex in Vancouver using the same inexpensive siding that was rejected by the city of Portland received a national development award.

The fatal flaw in this bond measure is that there is no cap on cost per home, which the city of Vancouver has demonstrated is possible to have. Vancouver passed their own Affordable Housing Fund in 2016 which caps the amount spent per housing unit at $50,000. Money from the fund would add to a project’s “capital stack,” rather than fully funding the complex. This forces project applicants (one of whom was Home First Development) to search for multiple sources of funding instead of relying on the Vancouver City Council to foot the bill.

The Metro Council could build cheaper apartments by using less expensive materials and contracting with private developers to decrease labor costs. Without a cap on cost per unit to keep themselves accountable, Metro is able to write a blank check with taxpayer dollars for every project.

Housing can be made affordable to both taxpayers and renters. Metro can do this by withdrawing the bond measure and redrafting it to include a cap on costs. Doing so would allow them to follow the lead of private developers like Rob Justus to make “affordable-affordable” housing a reality.

Rachel Dawson is a Research Associate at Cascade Policy Institute, Oregon’s free market public policy research organization. A version of this article appeared in The Portland Tribune on July 26, 2018.

Click here for the PDF version:

18-14-Private_Developers_Leading_the_Way_for_Affordable_HousingPDF

Read Blog Detail

Metro’s November Bond Measure Would Make All Housing More Costly

By John A. Charles, Jr.

Metro recently decided to refer a $652.8 million bond measure to the November ballot. If approved by voters, it would authorize Metro to borrow money either to purchase existing housing units or to subsidize the construction of new ones. The loans would be paid off by higher taxes on every property owner in the region for the next 30 years.

Unfortunately, of all the things Metro could do to reduce the price of housing, borrowing money is likely to be the least effective.

For one thing, new construction is expensive. Many public housing projects in recent years have cost more than $250,000 per unit. If Metro is lucky, the bond measure might pay for a total of 2,400-3,000 new apartments. Since the Portland region produces over 10,000 units of new housing every year, Metro’s intervention would not even be noticed.

In addition, borrowing $652.8 million and paying it back with interest (for a total of over $1 billion in debt service) would make every current home and apartment more expensive. We can’t tax ourselves to prosperity.

The basic weakness in the Metro bond measure is that it misdiagnoses the problem. When the Metro Council adopted its long-range growth management plan in 1995, it made a conscious decision to limit the physical size of the urbanized metropolitan region. That limit is imposed through Metro’s control of the Urban Growth Boundary. The planning goal was to “grow up, not out,” in order to prevent rural development and create the population density needed for light rail.

While that vision may sound appealing to some, there is a tradeoff: It limits the supply of new housing. Metro has always known this. As the agency’s economists wrote in 1994, “…the data suggest a public welfare tradeoff for increased density, more transit use, and reduced vehicle miles traveled. The downside of pursuing such objectives appears to be higher housing prices and reduced housing output.”

Metro controls the regional land supply and doesn’t want lots of cheap land for housing. Metro actually needs land to be scarce and expensive, because that’s the only way to justify its vision of high-density housing projects and light rail transit. Inevitably, this will be self-defeating; higher home prices will push more and more people out of Portland, where they will become even more auto-dependent.

In addition to its control of the regional land supply, Metro also imposes a tax of 0.12 percent on all new housing construction, with the exception of projects where the value of land improvements is less than $100,000. The tax revenues are used to pay for planning required on lands that might be used for housing in the future. The City of Portland also imposes its own tax for a similar purpose, at a much higher rate. It should be obvious that taxing new construction makes the housing problem worse.

Metro’s November Bond Measure Would Make All Housing More Costly The best thing Metro could do would be to systematically inventory every artificial barrier to housing production, such as zoning ordinances, planning requirements, building codes, system development charges, and hidden taxes—and figure out a way to reduce or eliminate them.

In other sectors of the economy where supply is unregulated, the market does a wonderful job of providing us with the products we want at reasonable prices. The same thing will happen in housing, if we allow it.

John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization. A version of this article appeared in The Portland Tribune on July 3, 2018.

Click here for the PDF version:

18-12-Metro’s_November_Bond_Measure_Would_Make_All_Housing_More_Costly

Read Blog Detail

Is Metro’s Affordable Housing Plan Really That Affordable?

By Rachel Dawson

The Metro City Council voted June 7 to place a housing bond measure of more than $600 million dollars on the ballot this fall. The regional government estimates the cost of new projects will be around $253,000 per unit. There is no cap on cost per unit, so project costs could be much greater, and have proven to be with past bonds.

However, it is possible to decrease the costs of these projects. Rob Justus, with Home First Development, has built a total of 431 public units for an average cost of $90,000 since 2011. He offered to build the city 1,000 homes at $85,000 per unit in 2015, but Portland officials rejected his proposal.

The city could build cheaper apartments by using less expensive materials and contracting with private developers to decrease labor costs. Placing a cap on how much is spent per unit would ensure that the city held itself accountable on project costs. Doing so would decrease the size of the bond and the burden it places on taxpayers.

There is a way to make housing affordable to both taxpayers and renters, and following the lead of private developers like Rob Justus is a way Portland can do just that.

Rachel Dawson is a Research Associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

Click here for the PDF version:

6-27-18-Is_Metro’s_Affordable_Housing_Plan_Affordable

Read Blog Detail

Amateur Hour at the State Land Board

By John A. Charles, Jr.

Oregon owns 1.5 million acres of School Trust Lands that must be managed for the benefit of public education. When profits are earned, the money goes into the Common School Fund, an endowment. Last year, the Fund distributed more than $70 million to local schools.

The Trust Lands are managed by the State Land Board, comprised of the Governor, the State Treasurer, and the Secretary of State. By policy, they are supposed to sell money-losing lands and keep the profitable ones.

Unfortunately, they tend to do the opposite. At its April meeting, the Board voted to sell a 3-acre industrial parcel in Washington County. There was no compelling reason to sell, as the property had an internal rate of return of 8% since it was purchased in 2012.

The state also owns 74,000 acres of timberland within the Elliott State Forest, near Coos Bay. Earnings on the Elliott have been spiraling downwards since the 1990s. In 2013, it finally started losing money and is expected to continue doing so for the foreseeable future. These losses take money directly out of public school classrooms.

In November 2016, the Board received an all-cash offer of $221 million dollars for the Elliott from a consortium of private landowners and tribal nations. That offer was rejected last year.

Students deserve professional management of their assets. They will never get it from the State Land Board because it’s made up of politicians. It’s time to amend the Oregon Constitution to remove trust land management from the Board’s jurisdiction.

John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.

Click here for the PDF version:

4-11-18-Amateur-Hour_at_the_State_Land_BoardPDF

Read Blog Detail

Study: School Trust income would go up by 600% if lands were sold

FOR IMMEDIATE RELEASE

Media Contact:
John A. Charles, Jr.
503-242-0900
john@cascadepolicy.org

PORTLAND, Ore. – Cascade Policy Institute released a study today showing that revenue generated for schools by the Oregon Common School Trust Lands (CSTL) likely would go up by 600% if the lands were sold and the net income added to the existing Common School Fund.

The study, A Proposal to Generate Adequate Returns from Common School Trust Lands, also showed that Oregon is only making $4.25/acre from its CSTL portfolio, the lowest among nine Western states. The state of Washington is earning the most, at $37/acre.

Management of Oregon’s 1.5 million acre portfolio of CSTL has long been a contentious issue. In 1992 Oregon Attorney General Charles S. Crookham issued an opinion clarifying that CSTL must be managed primarily for revenue maximization. Advocacy groups representing non-school interests have worked to subvert that directive ever since.

Environmental groups have repeatedly lobbied and litigated to eliminate revenue generation from the Trust Lands, claiming that commodity production is an outdated concept. They finally succeeded during the three-year period of 2013-15, when Oregon’s Trust Land portfolio actually lost $360,000/year in net operating income. Those losses had to be paid for by Oregon public school students.

The Oregon Land Board voted in 2015 to sell most of the Elliott State Forest in order to remedy this problem. However, the Board reversed itself in 2017, and Governor Kate Brown subsequently sought bonding authority from the Legislature to allow her to borrow $101 million (requiring $199 million in debt service) in order to “buy out” a portion of the Elliott so that it no longer would be subject to the Constitutional mandate to earn money for schools.

Those bonds have not yet been sold, and the Elliott is expected to incur more losses during 2018.

Last year Cascade Policy Institute commissioned economist Eric Fruits, Ph.D. to do a comparative analysis of nine Western states with large CSTL portfolios to determine under what circumstances it might make sense for states to sell these lands and invest the net proceeds into stocks, bonds, and other financial instruments. Dr. Fruits concluded that six states (including Oregon) likely would be better off selling CSTL assets; two states would be better off maintaining ownership; and one state likely would benefit from divestment, but more information is needed.

Cascade President John A. Charles, Jr. stated, “The Oregon Land Board has a fiduciary obligation to manage CSTL assets for the benefit of schools. Losing money every year violates that obligation. The Trust Lands have a market value of over $700 million, and students would be best served if the Land Board simply sold its real property portfolio and turned the proceeds over to the Oregon Investment Council, which has earned an average of 8.2% annually from the Common School Fund since 2010. In fact, there is no management option that would earn more money for students than selling these lands.”

The full report, A Proposal to Generate Adequate Returns from Common School Trust Lands, can be downloaded here.

Founded in 1991, Cascade Policy Institute is Oregon’s premier policy research center. Cascade’s mission is to explore and promote public policy alternatives that foster individual liberty, personal responsibility, and economic opportunity. For more information, visit cascadepolicy.org.

###

 

Read Blog Detail

Poll Shows Voters Are Smarter Than Politicians Think

By John A. Charles, Jr.

In November the regional government, Metro, released the results of a new public opinion poll of 800 registered voters living in the tri-county region.

One of the questions was, “In a few words of your own, what is the most important change that could be made to improve the quality of life in the Portland region?”

The top three responses were: dealing with the homeless/poverty (25%); affordable housing (17%); and traffic congestion (14%).

Environmental issues tied for last place (2%), and global warming did not even make the list.

This is roughly the opposite of what we frequently hear from many of the political talking heads. Listening to them, one would think that environmental Armageddon is upon us, especially because Donald Trump is President.

For instance, the top legislative priority for Senator Michael Dembrow (D-Portland), who chairs the Senate Environment Committee, is a bill he hopes to pass in early 2018 that would create a $700 million/year tax on carbon dioxide by establishing a convoluted industrial regulatory program. The ambient environment would not be improved one bit by this tax, but all of our basic necessities—food, clothing, shelter, and energy—would become more expensive.

Sen. Dembrow’s biggest supporter on this issue is Governor Kate Brown, who recently flew to Bonn, Germany to hobnob with celebrities at a United Nations conference on global warming. The two of them are convinced that if they can make energy more expensive, we’ll all use less of it and the world will be saved from “global warming.”

Most voters intuitively know that this is a scam. The term “global warming” doesn’t even have a useful definition. Voters know that the pain-versus-gain equation of global warming taxes is heavily one-sided: the “benefits” of reducing fossil fuel use are highly speculative (and may not exist at all); long-term (potentially thousands of years away); and global in nature. Yet the costs will be known, immediate, and local.

As the Metro poll shows, there is very little grassroots support for this kind of punishment.

It’s not surprising that homelessness, housing, and traffic congestion rank as the top three issues in the Metro poll because these are problems most of us confront daily. They are also things we can take action on.

Unfortunately, government itself has caused much of the mess, so voters will need to think carefully before signing on to more tax-and-spend programs. Almost every time regulators intervene in real estate markets, the result is some combination of less housing production and higher housing prices.

Take the most obvious intervention: urban growth boundaries. Since 1980, the population of the Portland metro region has increased by about 78%, but the available land supply for housing has only gone up by 10%. Making buildable land artificially scarce and thus more expensive is not a winning strategy if you’re trying to provide more housing.

But lack of land is just the start. After you add in ubiquitous farm and forestland zoning, extortionist system development charges, tree protection ordinances, inclusionary zoning requirements, prevailing wage rules on public housing projects, and numerous other interventions, the result is that we have a serious shortage of housing.

Even the government is trapped in government regulation. Last spring the Portland City Council approved spending $3.7 million to purchase a strip club on SE Powell Boulevard near Cleveland High School. The City plans to tear down the building and build 200 to 300 units of low-income public housing on the 50,000-square-foot property. City officials have admitted that it will take two years just to obtain the necessary permits for the redevelopment.

If it takes this long to get the permits for one of Mayor Ted Wheeler’s top priorities, imagine the delays facing a private sector developer.

The housing woes in such cities as Portland, San Francisco, New York, and Seattle are mostly self-inflicted. Housing supply is lagging demand because we’ve created so many barriers to housing construction. Removing those barriers should be a top priority for the state legislature when it convenes in February.

Global warming legislation does not even deserve a hearing.

John A. Charles, Jr. is President and CEO of the Portland-based Cascade Policy Institute, Oregon’s free market public policy research organization. A version of this article was published by the Pamplin Media Group and appeared in The Portland Tribune.

Click here for the PDF version:

18-01-Poll_Shows_Voters_Are_Smarter

Read Blog Detail
Income

Straightforward policy reforms can reverse Oregon’s lower-than-average incomes and high cost of living

By Eric Fruits, Ph.D.

Oregon’s economy seems to be chugging along, yet many of us feel like we’re losing steam. Employment and incomes are up since last year, but when we compare Oregon with other states, things don’t look so good here.

Oregon’s median family income is about the same as the national average. But according to the Census Bureau, we are 14 percent below our northern neighbor. Oregon’s per capita personal income—another measure—is more than 8 percent lower than the national average. Oregon is not a rich state.

At the same time, according to one widely used survey, Oregon’s cost of living is about 25 percent higher than the national average and 17 percent higher than in Washington. Oregon’s Consumer Price Index has increased 20 percent since 2007, while prices nationwide only increased 16 percent. Much of this disparity is due to Oregon’s increased cost of housing. In addition, prices for food, gasoline, and health care are also higher here.

It’s expensive to live in our state. When adjusting incomes for the cost of living, Oregon goes from the middle of the pack to the bottom of the bunch. Accounting for purchasing power, Oregon’s median family income is 20 percent lower than the nation and 27 percent lower than Washington’s.

While our incomes are lower, they are more evenly distributed. By various measures, Oregon has less income inequality than most other states. Our top one percent of income earners has a smaller share of total incomes, and our poverty rate is lower than the national average.

On the one hand, our state does not have enough deep pockets to feed soak-the-rich tax policies. On the other hand, our below-average incomes mean we don’t have the resources to feed soak-the-middle-class tax policies like the health insurance and provider taxes that a “no” vote on Measure 101 in the upcoming January 23 election would repeal.

It also means we don’t have the resources to feed soak-the-poor tax policies like the carbon tax the legislature is almost certain to take up next February.

Regulations regarding paid time off, employee scheduling, and occupational licensing increase the cost of employing people without directly adding money to workers’ paychecks. The result is reduced employment and lower wages.

Oregon’s land use laws—as well as regulations regarding design review, historic preservation, and inclusionary zoning—have stifled residential development. Demand for housing is outpacing construction, driving up housing prices. The Oregon Office of Economic Analysis estimates that over the past 10 years, the Portland area has underbuilt by 27,000 units.

The application of Oregon’s land use laws has also limited commercial development. While local areas are supposed have a 20-year supply of vacant industrial land, too often much of that land is not development-ready. Modern companies operate in globally competitive markets and cannot wait for a years-long planning process. Instead of waiting, they locate and expand elsewhere, taking jobs with them.

Anyone who drives through the Portland area knows that congestion has worsened over the past few years. It affects more than just commuters. The Oregon Department of Transportation concludes that congestion is affecting freight traffic and businesses throughout the state, threatening their national and international competitiveness. Higher transportation costs result in higher prices for consumers.

With the decline in water traffic in the Port of Portland and increased railway congestion, highway traffic is a key transportation mode for freight. As highway conditions worsen, Oregon is more likely to get crossed off the list of places to do business, resulting in a loss of potential middle-income jobs.

A recent study of income and cost-of-living data between states concludes: “Cost of living is clearly impacted by state policies [such as those noted above].” Oregon can move from being a poor state to a rich state through straightforward policy reforms. These must address our high cost of living as well as our lower incomes. Reforms to speed up and expand real estate development will relieve housing price pressures and attract employers. Construction to relieve congestion will improve our competitiveness while reducing roadway accidents and alleviating commuter stress. Labor market reforms will increase employment and boost Oregonians’ paychecks.

Do these things, and Oregon can meet its promise to all of us.

Eric Fruits, Ph.D. is an Oregon-based economist, adjunct professor at Portland State University, and Academic Advisor for Cascade Policy Institute, Oregon’s free market public policy research organization. A version of this article was originally published by the Pamplin Media Group and appeared in the Gresham Outlook and The Portland Tribune.

Click here for the PDF version:

17-22-Straightforward_Policy_Reforms_for_Oregon

Read Blog Detail
Tolling People on to Portland’s Highways

Tolling People on to Portland’s Highways

By John A. Charles, Jr.

Earlier this year the state legislature passed a bill requiring the Oregon Transportation Commission (OTC) to apply for federal authorization to implement “value pricing” on two regional highways: I-205, and I-5 from the Washington border to the intersection with I-205. The OTC must apply by December 31, 2018.

Although value pricing may sound vague or somewhat ominous, motorists should be happy with this new policy. It has the potential to eliminate traffic congestion and create a revenue stream that will allow us to build the new highways and bridges that we need.

First, some background. “Value pricing” is a bureaucratic term for electronic tolling of highways where the toll rates vary based on the density of traffic. Usually, the rates change based on time of day, direction of travel, and day of the week. The rates are set to ensure 45 MPH driving conditions at all times of the day, hence the “value” offered to motorists.

There are many possible variations on this theme. In most cases, value pricing is used on new highway lanes, allowing drivers the option of staying in the unpriced, general purpose lanes. That probably will not be feasible in the Portland region because there is no room for an entire new network of priced lanes on I-5.

In some ways this is a blessing, because variable tolling will make our current lanes more productive. If priced properly, it’s possible that new lanes will not even be needed, saving us the expense of construction.

Value pricing is necessary because our current system cannot address congestion. Our highway network is an open access system, where each trip appears to be “free.” Of course, it’s not free—it’s being paid for by various back-door mechanisms such as motor fuel taxes, vehicle registration fees, and random federal grants. But we think it’s free, so during peak hours we see a “stampede” effect.

When too many people try to get on at the same time, per-lane throughput drops substantially. The carrying capacity for most highways is roughly 1,800 vehicles per-hour in each lane. At times of hyper-congestion, this can drop to 900 vehicles or fewer.

By using variable pricing, we can clear up the stampede and get per-lane travel back to 1,600 or 1,800 vehicles per-hour. In essence, value pricing allows us to “toll on” more people than we “toll off.”

The effect of this was seen recently when tolls on the Port Mann Bridge in Canada were removed on September 1. The Port Mann is a 10-lane bridge over the Fraser River near Vancouver. After tolls were removed, the result was a huge increase in congestion. One driver saw her daily commute increase by 25 minutes each way. She told a news reporter, “Absolutely, it’s terrible. It’s selfish but I want those tolls back on.”

In addition to the benefits of free-flow driving conditions, variable tolling will also create the dedicated revenue stream we need for future highway expansion. There is no doubt that we need several new bridges over the Columbia River, plus additional highway lanes elsewhere. Value pricing will tell us where to build, when to build, and who is willing to pay.

Fortunately, the Oregon Constitution does not allow toll revenues to be siphoned off for non-highway uses such as light rail construction. Therefore, money paid by motorists will benefit them directly.

The new law mandates value pricing on two specific highways but also authorizes the OTC to implement pricing anywhere else. Since the Portland highway network is an integrated system including I-84, I-5, I-405, HW 26, HW 217, and I-205, it would be better to implement value pricing region-wide to ensure that motorists get what they want: free-flow driving conditions, at all times of the day.

Most new highways being built around the world are using electronic tolling with variable rates. The new Oregon law is an opportunity for us to learn from that experience and to implement a Portland highway pricing system that truly delivers “value” for motorists.

John A. Charles, Jr. is President and CEO of the Portland-based Cascade Policy Institute, Oregon’s free market public policy research organization. A version of this article was originally published by the Pamplin Media Group and appeared in the Wilsonville Spokesman and The Portland Tribune.

Click here for the PDF version:

17-20-Tolling_People_on_to_Portland’s_Highways

Read Blog Detail
Oregon’s affordable housing crisis can be attributed to restrictive land use policies

Oregon’s affordable housing crisis can be attributed to restrictive land use policies

By Lydia White

Affordable housing advocates are quick to criticize Portland City Council’s use of the $258.4 million affordable housing bond, but their criticism is fundamentally misdirected. Advocates should turn instead to Oregon’s state and local governments to demand an overhaul of restrictive land use policies.

Vanessa Brown Calder of the Cato Institute has produced a report which demonstrates a correlation between increased zoning and land use regulations and more expensive housing.

One of Oregon’s most restrictive land use policies is the urban growth boundary, a simulated border created to reduce urban development. The Portland Tribune recently reported that, according to Christopher Herbert, the managing director of the Center for Housing Studies at Harvard University, UGBs “have the downside of raising land prices” by restricting access to developable land. While some proponents claim that UGBs protect farmland, most fail to acknowledge the extent of their negative externalities.

Calder also suggests government housing subsidies undermine the incentives for states and localities to address what underlies the housing problem—an artificially scarce supply of land—because the aid serves as a substitute for substantial solutions.

Advocates continue to underestimate well-intentioned policies’ unintended consequences. To have an effective impact on housing affordability, they should call on legislative officials to address Oregon’s state and local land use policies.

Lydia White is a Research Associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

11-1-17-Oregon’s_Affordable_Housing_Crisis

Read Blog Detail
Metro's New Plan to Keep Voters out of Chehalem ridge nature park

Metro’s New Plan to Keep Voters out of Chehalem Ridge Nature Park

By John A. Charles, Jr.

On October 19 the Metro Council adopted an Access Master Plan for the Chehalem Ridge Nature Park. This is a former industrial tree farm of 1,230 acres that Metro bought from Stimson Lumber Company in 2010.

Chehalem Ridge is Metro’s largest land purchase financed through the bond sale program approved by voters in 1995 and again in 2006. However, it’s not clear why it was ever a priority. Located just east of Gaston, Chehalem Ridge is outside the Metro boundaries and far from any urban population. The roads leading to it are narrow and winding, and there is no public transit. The entrance is gated, and the land has never been open to the public.

Chehalem Ridge is supposed to be the “crown jewel” of the Metro parks system, but the land itself is unremarkable. According to the Master Plan, prior surveys found “no significant natural areas on site.”

Surveys also showed “no historic or archeological materials” and “no cultural resources were found.”

In short, this is a generic parcel of overgrown timberland with minimal ecological value and almost no recreational appeal.

Nonetheless, the Access Master Plan treats it like the second coming of Yellowstone. Of the 1,230 acres, more than 99% are in some kind of “conservation zone” that limits or prohibits active use by the voters who paid for it. The Plan notes that the property could easily accommodate 29.5 miles of recreational trails, in four different separate-use categories—hiking, cycling, equestrian, and multi-purpose—but only three miles are being planned for by Metro. This will create conflicts between cyclists, horseback riders, and walkers.

In comparison, Portland’s revered Forest Park totals 5,157 acres and offers 90 miles of trails. After adjusting for size, Forest Park has seven times more trail miles than Chehalem Ridge will have.

Moreover, dogs are allowed in Forest Park, as they are in virtually all local parks in the metropolitan region. Metro has a strict policy prohibiting dogs.

Chehalem Ridge will have a single parking lot for 80 vehicles, public restrooms, parking for equestrians, a multi-use shelter and picnic area, and a small lawn area for family activities. If you want greater access to nature itself, it will be disallowed or discouraged.

This is consistent with Metro’s over-arching philosophy of buying up vast tracts of green spaces far from where most people live, and then limiting taxpayer use. Other Metro properties near Chehalem Ridge—including Carpenter Creek Natural Area, Wapato View Area, and Penstemon Prairie—are not open to the public, nor is there any plan to do so.

Metro went through a multi-year public outreach effort ostensibly designed to learn what people would like with this new property. According to Appendix C of the Master Plan, comments from the Spanish communities emphasized the importance of “gathering places, places to eat, security and most importantly, places for kids to play, exercise and cool off during the summer.”

Comments for the English-speaking community emphasized “wanting to hike or walk with their dogs, and both advocacy for more bike-specific trails as well as comments around not wanting to mix bikes, pedestrians and horses on the same trail.”

Metro’s Master Plan ignores virtually all these concerns. There will be no playgrounds for kids, few places for families to eat, the trails will create user conflicts, and dogs will be banned.

At the public hearing, I was the only witness to criticize the Plan. I encouraged Metro to build at least 30 miles of trails, with separate facilities for hikers, cyclists, and equestrians. I suggested that a long hiking loop be created with possible campsites for use by Scouting groups and others desiring an easy backpacking experience.

I also encouraged Metro to plan for more family-friendly elements such as disc golf, sand volleyball courts, picnic areas, and playgrounds for young children. These are the kinds of facilities found at Blue Lake Park, one of the region’s most popular recreational destinations.

The Metro Council had zero interest in these ideas. As far as Councilors are concerned, they are letting us use 5.5 acres of the Park and we should be grateful. In his celebratory speech before dropping the gavel, Presiding Officer Tom Hughes proudly defended the status quo by stating, “There will be no ivy and no dogs; both are invasive species.”

John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.

10-26-17-Metro’s_New_Plan_to_Keep_Voters_out_of_Chehalem_Ridge

Read Blog Detail
Timber Conservation and Oregon’s Constitution Shouldn’t Be at Odds

Timber Conservation and Oregon’s Constitution Shouldn’t Be at Odds

By Lydia White

Last week the Idaho Department of State Lands and the U.S. Forest Service signed ten agreements to allow logging and restoration on federal forest land, including land managed to benefit Idaho public schools by means of the Common School Fund.

Officials say allowing lumber companies to manage the land will create jobs while reducing the severity of wildfires raging in the western United States, costing over $2 billion this year alone. Jonathan Oppenheimer of the Idaho Conservation League says, “We’d like to see them recognize that you can still have a profitable timber sale while protecting some of those sensitive resources.”

Oregon faces similar wildfires, cost constraints, and environmental litigation, but hasn’t adopted Idaho’s successful approach, despite its Constitutional mandate to produce revenue for its own Common School Fund.

Earlier this year, the State Land Board halted the sale of the Elliott State Forest to a private company, an approach similar to Idaho’s, after backlash from environmental advocates. Instead, the Legislature passed a measure allowing Oregon to borrow $100 million in bonds to purchase the Elliott from a different state entity, all while costing Oregon’s Common School Fund billions in forgone returns.

Oregon, and other western states scourged by wildfires, should look to Idaho as it moves forward with its logging projects and adopt similar strategies proven to balance conservation and Constitutional requirements.

Cascade Policy Institute is set to publish a study of nine western states, including Idaho and Oregon, and their versions of the Common School Fund early next month.

Lydia White is a Research Associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

View the PDF version here: 10-4-17-Timber_Conservation_Oregon_Constitution_Not_at_Odds – PDF

 

Read Blog Detail

Floor Memo Regarding Bond Funding for the Elliott State Forest

TO: Members of the Oregon Legislature

FM: John Charles for Cascade Policy Institute

RE: SB 5505/Elliott State Forest Bonds

DT: July 5, 2017 

SB 5505 includes bond funding for many worthy projects. Unfortunately, it also includes authorization for the sale of $101 million in Certificates of Participation for the purpose of “buying out” part of the Elliott State Forest (ESF), which we already own.

The State Land Board chose this option in May rather than taking a cash offer of $220.8 million to sell most of the ESF, which is losing money for schools.  While this “feel good” measure appeased many environmental interests, what has never been discussed publicly is the long-term opportunity cost of borrowing $101 million and paying $199 million in debt service over 25 years, instead of investing $220.8 million of new money into the Common School Fund.

The graphic below attempts to do that over a 50-year period, using an average total return rate of 5.58% (the actual rate over the past 10 years). The gap between the blue and red lines is the estimated loss to schools in the annual payouts from the CSF. Note that the gap widens over time and can never be made up. Over the lifetime of the Fund – which is infinity – your approval of the bond sale will result in many billions of dollars lost to Oregon schools.

READ MORE HERE

 

Read Blog Detail

Oregon Land Board Should Take the Deal

By Lydia White

At a time when Legislators threaten to slash government services to cover a $1.6 billion budget shortfall, Governor Kate Brown and Treasurer Tobias Read plan to make things worse.

Next week, the State Land Board will meet to consider selling 84,000 acres of the Elliott State Forest to Lone Rock Timber Management for $221 million. If the sale is approved, all the money would be invested in the Common School Fund, generating billions of dollars in earnings for K-12 schools.

Governor Brown, who supported the sale in 2015, now wants the state to buy out the Elliott for $100 million by issuing bonds. Taxpayers would pay back the principal and interest for the next 25 years, at a cost of $120 million or more.

But the Land Board has a constitutional obligation to produce revenue for Oregon schools by either managing the Elliott for a profit or selling off dead assets. Forcing taxpayers to buy an asset they already own, plus forgoing $121 million in additional funds from a willing buyer and millions more when factoring in compound interest, would violate the Board’s fiduciary trust.

Fortunately, the Oregon School Boards Association, one beneficiary of the Common School Funds, expressed intent to sue if the Land Board refuses to “fulfill its fiduciary duties.”

The Board has a firm offer of $221 million. They should accept it.


Lydia White is a Research Associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

Read Blog Detail

Selling Bonds to Buy the Elliott State Forest Would Be a Breach of Fiduciary Trust

By John A. Charles, Jr.

State Treasurer Tobias Read has announced that he is now prepared to support a plan being developed by Gov. Kate Brown to sell bonds that would “buy out” the Elliott State Forest from the Common School Trust Land portfolio and keep it in public ownership.

Unfortunately, this would saddle taxpayers with debt service on the bonds, thereby reducing or even eliminating the financial benefits of adding the bond proceeds to the corpus of the Common School Fund. This would be a breach of fiduciary trust on the part of the State Land Board.

Members of the public may not understand that bond sales don’t create “free” money; the face amount must be repaid over some designated period of time, with interest.

For example, if the legislature authorizes the sale of $100 million in general obligation bonds, total principal and interest will likely exceed $150 million over several decades.  All Oregon taxpayers will be legally obligated to pay off that debt.

Another option might be the sale of bonds backed by future earnings on the Oregon Lottery. But lottery revenues are essentially the same as General Fund revenues. Paying debt service on lottery-backed bonds will inevitably take money from public schools.

The Governor’s proposal to have the public buy a forest it already owns is akin to someone losing money in an IRA, then transferring funds into the account from a 401(k) to make up for the loss. If both accounts are owned by the same individual, there is no net gain; the loss is just disguised.

As the state’s elected Treasurer, Tobias Read should know better. The only way to decouple the Elliott State Forest from the Common School Fund is to sell it to private parties with no taxpayer financing involved.

Such an offer is sitting in front of the Board today. The Board should accept the offer of $220.8 million from the Lone Rock Timber consortium, place the net proceeds into the Common School Fund, and let the money begin immediately working for public school students.


John A. Charles, Jr. is President and CEO of the Portland-based Cascade Policy Institute, Oregon’s free market public policy research organization.

 

Read Blog Detail

How Portland’s Inclusionary Zoning Policy Makes Development Less Affordable

By Lydia White

The City of Portland’s inclusionary zoning* requirements have turned a once-gushing housing development market into sludge. This was predicted by nearly everyone outside the central planning bureaucratic bubble.

In a rush to beat a February 1st deadline, developers submitted permits for 7,000 units in less than two months. Since then, that number has dropped by 1033%. Combined with other onerous mandates, inclusionary zoning has pushed developers to build in Portland’s surrounding suburbs. Developers aren’t doing so out of greed; they cannot feasibly finance projects within city limits.

Incentives provided by the city aren’t enough to supplement the costs of inclusionary zoning units. Portland-based Urban Development + Partners estimates that an “affordable rate” building costs over $300,000 more than its value, which is the primary number banks and investors use to determine a project’s viability. Eric Cress, a principal with Urban Development + Partners, says, “You can’t finance that [inclusionary zoning projects]. The financing world does not accept anything that costs more than its value.”

The unfortunate, yet not unforeseen, consequence of inclusionary zoning is that some low-income households benefit, while the policy serves as an informal gentrification program suffered by other residents. If Portland’s city planners want to help people afford housing, they should repeal inclusionary zoning requirements and let developers increase housing supply in a free and open housing market.

*Portland’s inclusionary zoning policy requires developers with 20 units or more to make 20% of units “affordable” at 80% of median family income, or 10% “affordable” at 60% median family income.


Lydia White is a Research Associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

Read Blog Detail

It’s Finally Time to Sell the Elliott State Forest

By John A. Charles, Jr.

At the February 14 meeting of the State Land Board, the Board voted 2-1 to enter into negotiations with a private consortium to sell 82,450 acres of the Elliott State Forest. Gov. Kate Brown, who was on the losing end of the vote, has ordered the Department of State Lands to come back in April with an alternative plan that would allow for continued public ownership.

Not only is the Governor being petulant, but the alternative she favors has been studied repeatedly since 1995. That was the year that the Board released its first “Draft Asset Management Plan.” The Elliott was then valued at $850 million, but annual revenues were dropping due to rising management costs.

The Land Board was told by a consultant that “selling the Elliott State Forest would be the most effective way to maximize Common School Fund revenues.” The Board is required by the Oregon Constitution to make money on the Elliott because it is an endowment asset for public schools.

Sadly, that recommendation was rejected. Instead, state officials spent the next 20 years engaged in fruitless negotiations with federal regulators regarding compliance with the Endangered Species Act. Every time the Board thought an agreement to cut more timber had been reached, it turned out to be a false summit.

Meanwhile, advocacy groups used the Elliott as a legal piñata. They successfully sued the Land Board so many times that the forest stopped generating any revenue by 2013 and actually became a financial liability for Oregon schools.

The costs of this wait-and-see approach were not trivial. According to a report published by the Board in 2014, the Elliott had cost the Common School Fund $1.4 billion in lost earnings since 1995.

Things actually worsened after the report was published. In 2015 the Land Board decided to finally sell the Elliott; but instead of taking competitive bids, the Board established a fixed price. The Board also downzoned the land by imposing multiple limitations on future timber harvesting.

The result was that the Board received a single offer in 2016, for the state-mandated price of $220.8 million. The net result of 22 consecutive years of public ownership was a loss to the Common School Fund of at least $1.62 billion.

Governor Kate Brown now wants to renege on the sale entirely (despite voting for it in 2015) and use state bonding capacity to “buy out” a portion of the Elliott. This is probably the worst idea yet. The public already owns the forest; why would we want to go into debt buying ourselves out?

While the $220.8 million offer now on the table is a far cry from the $850 million we could have received in 1996, it’s better than hanging on to a dead asset. Secretary of State Dennis Richardson and State Treasurer Tobias Read voted to sell the forest, and that was the appropriate decision. Adding $220 million in new revenue to the Common School Fund endowment will generate many billions of dollars for schools over the next century.


John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization. A version of this article originally appeared in the Portland Tribune on March 16, 2017.

Read Blog Detail

Land Board Votes to Sell Elliott State Forest

By John A. Charles, Jr. 

On February 14 the Oregon State Land Board – comprised of Governor Kate Brown, Treasurer Tobias Read, and Secretary of State Dennis Richardson – voted 2-1 to sell 82,450 acres of the Elliott State Forest to a consortium of private parties led by Lone Rock Timber Management Company. The agreed-upon sale price is $220.8 million; and the net proceeds will be placed in the Oregon Common School Fund (CSF), an endowment for public schools.

This parcel is a small part of the Oregon Common School Trust Land portfolio of 1.5 million acres of lands that must be managed by the Land Board to maximize revenue over the long term for the benefit of public schools.

For many years the Elliott was a money-maker, but environmental litigation steadily reduced timber harvesting to a trickle. For the last three years the Elliott has actually lost money, which prompted the Board in August 2015 to vote unanimously to sell the Elliott and put the proceeds into alternative investments.

As a long-time Board member, Gov. Kate Brown repeatedly voted to sell the forest, but in December 2016 she changed her mind and announced her intent to use state bonding capacity to buy a portion of the Elliott and keep it in public ownership. Treasurer Ted Wheeler and Secretary of State Jeanne Atkins agreed with her conceptually, but no formal vote was taken and both of them have since left the Board.

At the meeting earlier this week, Gov. Brown made a motion to terminate any further negotiations to sell the forest, despite the fact that Lone Rock and its partners had spent at least $500,000 putting together a good-faith offer in response to the Land Board’s sale protocol. Her motion never received a second.

New Treasurer Tobias Read indicated that he was uncomfortable walking away from the offer at the last minute, and that the legal doctrine of “undivided loyalty” to Common School Fund beneficiaries – public schools – compelled him to sell the money-losing forest. Secretary of State Dennis Richardson concurred and the Governor was out-voted.

Cascade Policy Institute has been urging the Land Board to sell the Elliott since 1996, when the forest was valued at roughly $800 million. It was evident to us that over the next several decades, environmental lawyers would treat the Elliott like a legal piñata and file continuous lawsuits to prevent timber harvesting. That is exactly what happened, turning this vibrant forest into a net liability by 2013.

Cascade published a number of technical papers demonstrating that over virtually any time period and under any reasonable set of assumptions, Oregon schools would be better off if the Board simply sold the forest and put the net proceeds into stocks, bonds, and other financial instruments. These papers were ignored by multiple generations of Land Board members, including John Kitzhaber, Ted Kulongoski, Jim Hill, Phil Keisling, Randall Edwards, and Kate Brown.

Many editorial writers are urging the Land Board to “hit the pause button” on this sale, but the fact is the Board has been “pausing” since at least 1995. As timber harvest receipts steadily declined over the next several decades, Oregon wasted more than $3 million trying to negotiate a so-called “Habitat Conservation Plan” with the federal government that would shield Oregon from further litigation. Such an agreement was never reached.

In a report paid for by the Department of State Lands in 2015, experts found that the failure to sell the Elliott in 1995 – as recommended by a Department of Forestry consultant – had cost public schools $1.4 billion in lost earnings over a 20-year period.

Gov. Brown’s last-minute effort to buy back timberland the public already owns was poorly thought out. Most of the media observers – who tend to favor public ownership – have apparently overlooked the fact that any revenue bonds sold by Oregon would have to be paid off by profits generated on-site. Since the Elliott has been steadily losing money under public management, it’s unlikely that anyone would even buy such bonds.

Although selling the Elliott was the right thing to do, we will never know if the public received fair market value because the Land Board refused to take competitive bids. In 2016 the Board established a price of $220.8 million based on multiple appraisals, and no one was allowed to offer a higher amount. Clearly, this was a bizarre way to sell a valuable asset and demonstrates how Kate Brown, Ted Wheeler, and Jeanne Atkins consistently abdicated their fiduciary responsibilities in favor of a political agenda to retain public ownership.

Treasurer Read and Secretary Richardson deserve credit for moving forward with the sale. Neither of them wanted to do it, but they understand that they have an obligation to current and future public school students to add value to the Common School Fund.


John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.

Read Blog Detail

How Much Is the Elliott State Forest Worth to Oregon Schools? (Don’t Forget the Value of Compounding)

By John A. Charles, Jr.

Advocates of public schools frequently complain about the need for more money, yet many of them are now objecting that the State Land Board is on the verge of selling off the Elliott State Forest, which is an endowment asset for public schools.

The fact is, the Land Board is required by the Oregon Constitution to maximize revenue from the Elliott. The sale has to go forward because timber management is no longer profitable. But the Board should insist on competitive bids, which it is currently prohibiting. The Board should also remove all restrictions on future timber harvesting.

If the Elliott were sold in a competitive auction, it would likely go for $350 million or more. Let’s assume that the proceeds were invested in a manner similar to the PERS fund and had average annual returns of 7.5%, which is the target rate for PERS.

After 50 years, the investment would be worth $13 billion; but after 100 years, it would be worth $487 billion. The huge difference in the two time periods is due to the miracle of compounding.

Do school funding advocates have a better idea for raising $487 billion? If not, they should support an auction sale of the Elliott State Forest.


John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.

Read Blog Detail

Portland’s Zoning Policies Make the Housing Crisis Worse

By Lydia White

The masterminds behind Portland’s newest inclusionary zoning recommendations have proven once again to be economically illiterate.

The Portland Planning and Sustainability Commission unanimously recommended requiring developers with 20 units or more to make 20% of units “affordable” at 80% of median family income, or 10% “affordable” at 60% median family income.

This policy fails to accomplish the Portland Housing Bureau’s stated intentions to “harness the economic power of the private market to increase the supply of affordable housing.”

A simple economics lesson would show them their policies exacerbate the city’s affordable housing crisis.

Developers are indeed responsive to basic economic concepts like incentives and cost-benefit analyses. They will not, and cannot, eat 20% of their costs. As with any tax, costs are passed on to consumers. Developers must offset their losses by accepting taxpayer-funded subsidies, cutting costs (such as forgoing routine maintenance or major repairs), or raising the prices of remaining units. This makes housing even less affordable, forcing lower-income households out of the city and spurring gentrification.

Until such unintended consequences are seriously considered, Portland city leaders will continue to amplify the housing crisis. Only the most out-of-touch city planners believe they can defy the laws of economics and make a scarce commodity more affordable by decreasing its supply.


Lydia White is a Research Associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

Read Blog Detail

New Report Highlights Civil Rights Implications of Oregon Land Use Laws, Urban Growth Boundaries

FOR IMMEDIATE RELEASE

Media Contact:
John A. Charles, Jr.

john@cascadepolicy.org

503-242-0900

PORTLAND, Ore. – A new report released today by Cascade Policy Institute demonstrates that Portland’s rapidly growing housing prices are a major hardship on newcomers, renters, and low-income families. The report claims the ultimate source of Portland’s crisis in housing affordability is the region’s urban growth boundary and that minorities suffer the most from the consequences of high housing prices.

The report, Using Disparate Impact to Restore Housing Affordability and Property Rights, is authored by Randal O’Toole, an adjunct scholar with Cascade Policy Institute, Oregon’s free market public policy research organization, and the author of The Vanishing Automobile and Other Urban Myths.

The report claims the ultimate source of Portland’s crisis in housing affordability is the region’s urban growth boundary:

“The Oregon legislature and various cities have applied band-aid solutions to this problem; but none of them will work and some, such as inclusionary zoning, will actually make housing less affordable. That is because none of these solutions address the real problem, which is that the urban growth boundaries and other land-use restrictions imposed by the Land Conservation and Development Commission, Metro, and city and county governments have made it impossible for builders to keep up with the demand for new housing.”

“Common sense says that restricting the supply of something for which demand is increasing will cause prices to go up,” says O’Toole, who cites the findings of economic studies from Harvard, the Federal Reserve Board, the University of California, and the University of Washington, among others, to conclude that strict land-use regulation is the main cause of unaffordable housing.

Other policies which make Portland-area housing less affordable, the report claims, include lengthy delays in the permitting process, onerous impact fees, and architectural design codes. But these policies would have little effect if developers could meet market demand by building homes in unregulated areas outside of existing cities. Urban growth boundaries not only limit supply, but they shield city governments from outside competition.

“These policies effectively discriminate against low-income blacks and other minorities,” says O’Toole. “Under the 2015 Supreme Court ruling, Texas Department of Housing v. Inclusive Communities Project, they also violate the Fair Housing Act just as much as if Portland put out a sign saying, ‘No blacks allowed.’”

O’Toole explains how this Court decision could have a profound impact on Portland’s housing market. He says the Supreme Court’s ruling said that land use policies that make housing more expensive can be legal under the Fair Housing Act only if they have a legitimate goal and there is no other way of accomplishing that goal without making housing less affordable.

According to Cascade Policy Institute CEO John A. Charles, Jr., “Policymakers think the solution to our housing shortage is to build more tax-subsidized apartments, but simply deregulating the land markets would result in far greater housing supply at lower cost.”

The report, Using Disparate Impact to Restore Housing Affordability and Property Rights, is available here.

Founded in 1991, Cascade Policy Institute is a nonprofit, nonpartisan public policy research and educational organization that focuses on state and local issues in Oregon. Cascade’s mission is to develop and promote public policy alternatives that foster individual liberty, personal responsibility, and economic opportunity. For more information, visit cascadepolicy.org.

###

Read Blog Detail

Repeating Mistakes Is Not a Housing Strategy

The Portland City Council has approved a plan for the Housing Bureau to lease industrial land in North Portland for $10,000 per month, beginning October 7. The site is to be used for the construction of a large homeless shelter that potentially could serve up to 1,400 people. This idea, pushed by developer Homer Williams, was rushed through with virtually no due diligence.

Before additional money is spent, the City Council should carefully analyze what went wrong in two previous construction projects. First was the $58-million Wapato Jail built by Multnomah County in 2004, but never operated. With 525 beds in pristine condition, one would think there is potential for this site to temporarily house at least a few people now living under bridges.

Second, in 2011 Portland opened the $47 million Bud Clark Commons, which includes 130 studio apartments and extensive social services for low-income individuals. It was a nice idea, but the police have been called so often to the Commons that in December 2013, then-Chief Mike Reese told the Portland City Council that he was considering filing a chronic nuisance property complaint against the shelter.

Both structures were built with good intentions, but things did not go as planned. Let’s learn from the past before repeating mistakes in the future.

Read Blog Detail

Oregon Land Board Low-Balls Elliott Timber with Fixed-Price “Bidding”

Last week the Oregon Department of State Lands announced the “fair market value” of 82,450 acres of Common School Trust Lands within the Elliott State Forest as $220.8 million. The number was picked by Roger Lord of the consulting firm Mason, Bruce & Girard after analyzing three different professional appraisals. Proceeds from the land transfer will go to the Common School Fund and be invested for the long-term benefit of public school students.

At a public meeting held in Salem, the Director of the Department, Jim Paul, reiterated that anyone hoping to acquire the 82,450 acres must offer exactly $220.8 million. Any offer above that will be considered “outside the protocol” and deemed “non-responsive.” This announcement was the latest step in the Land Board’s plan to dispose of the Elliott property in a non-competitive bid process.

The Land Board has invented a “fair market” value of the Elliott timberland without allowing a market to actually function. The price investors are willing to pay might be higher than $220.8 million, or even multiples of that number. Unfortunately, we’ll never know because the Land Board is refusing to take competitive bids. Clearly, this is a breach of fiduciary trust. Public school students, teachers, and parents deserve to get top dollar in this once-in-a-lifetime sale of a public asset.

Read Blog Detail

Oregon Land Board Low-Balls Elliott Timber at $220.8 Million

FOR IMMEDIATE RELEASE

Media Contact:
John A. Charles, Jr.

503-242-0900

john@cascadepolicy.org

 

PORTLAND, Ore. – Today the Oregon Department of State Lands announced the “fair market value” of 82,000 acres of Common School Trust Lands within the Elliott State Forest as $220.8 million.

The number was picked by Roger Lord of the consulting firm Mason, Bruce & Girard after analyzing three professional appraisals which valued the land at $262 million, $225 million, and $190 million, respectively.

All proposed “Elliott Acquisition Plans” are due to the Department of State Lands by 5:00 p.m. November 15, 2016. If there are multiple plans accepted, the Oregon Land Board will choose the winning offer at its December meeting. Proceeds from the land transfer will go to the Common School Fund and be invested for the long-term benefit of public school students.

At a public meeting held in Salem, the Director of the Department, Jim Paul, reiterated that anyone hoping to acquire the 82,000 acres must offer exactly $220.8 million. Any offer above that will be considered “outside the protocol” and deemed “non-responsive.”

Today’s announcement was the latest step in the Land Board’s plan to dispose of the Elliott property in a non-competitive bid process. This prompted Cascade Policy Institute President John A. Charles, Jr. to make the following statement:

“The Land Board has invented a ‘fair market’ value of the Elliott timberland without allowing a market to actually function. The price investors are willing to pay might be the $262 million appraisal, or it could be multiples of that number. Unfortunately, we’ll never know because the Land Board is refusing to take competitive bids. Clearly this is a breach of fiduciary trust. Public school students, teachers and parents deserve to get top dollar in this once-in-a-lifetime sale of a public asset.”

Founded in 1991, Cascade Policy Institute is a nonprofit, nonpartisan public policy research and educational organization that focuses on state and local issues in Oregon. Cascade’s mission is to develop and promote public policy alternatives that foster individual liberty, personal responsibility, and economic opportunity. For more information, visit cascadepolicy.org.

###

Read Blog Detail

Why is the State Land Board selling the Elliott State Forest without competitive bidding?

In August 2015 the Oregon Land Board (Governor Kate Brown, Secretary of State Jeanne Atkins, and Treasurer Ted Wheeler) voted to sell roughly 82,450 acres of “Common School Trust Lands” within the Elliott State Forest because the state was losing money on those lands. Under Oregon law, School Trust Lands are supposed to make money for schools.

Given the ongoing losses, the Board reached the correct decision. Unfortunately, the sale protocol adopted by the Board is bizarre. The Board will establish a price for the land based on appraisals, and that will be the only price accepted. If you dare to offer $1 more, your offer will be declared “non-responsive.”

How can this make sense when Trust Lands serve an as an endowment for public schools? Trustees of any endowment have a fiduciary obligation to make decisions in the best interest of beneficiaries. The 82,450 acres of timberland being sold in the Elliott may be worth anywhere from $300 million to more than $400 million, but no one knows the exact value. Setting a non-negotiable price through appraisals means that potentially vast amounts of money could be left on the table.

Anyone who has been to a charity fundraising auction knows that the estimated value of something frequently turns out to be wrong—by a lot. That’s why we have competitive bidding.

The same is true in business transactions. Just last month, for example, Alaska Airlines bought Virgin Airlines for $2.6 billion, or $57/share—a price that was 80% higher than what the shares had been trading for prior to the sale.

Instead of bidding on price, the Land Board plans to pick a winning offer based on which prospective purchaser has the best package of “public benefits.” The minimum level of benefits has been defined by the Board as the following: (1) at least 50 percent of the purchased timberland must remain open for public recreational use; (2) no-cut buffers of 120 feet on each side of fish-bearing streams must be left permanently untouched; (3) at least 25% of the older stands of trees must be left intact; and (4) at least 40 full-time jobs annually must be provided over the first 10 years of new ownership.

These benefits may have merit, but using them as the way to choose the best offer will turn the sale protocol into a beauty contest. There is no objective way to compare an offer including 130-foot buffers with another offer that has only 120-foot buffers but proposes to employ 50 people each year rather than 40.

This protocol is going to create a nightmarish decision process for the three Land Board members, while violating their fiduciary obligations to schools.

There is an easy solution to this problem: Simply make the four public benefits a minimum requirement, and then pick the highest-price offer meeting those requirements. Maybe we’ll find out that the Elliott is worth a lot more than it’s been appraised for.

Anyone who works at a public school, serves on a school board, or has a child enrolled at a public school should be outraged at this giveaway.


This article originally appeared in the Salem Statesman Journal on April 30, 2016.

Read Blog Detail

Freedom in Fiction: Mansfield Park

“Wretchedly did [Sir Thomas] feel, that with all the cost and care of an anxious and expensive education, he had brought up his daughters, without…his being acquainted with their character and temper.”

Graduation season begins this weekend. With young Oregonians taking their next steps in life, why not revisit a classic story about young people setting out into the world of new jobs, independent incomes, first homes, debt, leisure, and love?

Of all Jane Austen’s novels, Mansfield Park is probably the most misunderstood and underrated. Unlike Austen’s more popular tales of upper-class English gentry, Mansfield does not star a confident young woman from a prominent family. Instead, Fanny Price is a shy teenager, dependent on wealthy relatives, who says little in public and hates attention. Mansfield is the only Austen novel in which the full force of a cynical world comes crashing down on an inexperienced teenage girl who seems least equipped to fight it.

The most contemplative of Austen’s works, Mansfield is not so much about a young girl’s search for love as it is a careful study of how not to lose oneself while trying to “make it” in the world. Because Fanny is a quiet person, she observes her peers while they hash out among themselves what is important to their lives and how they judge what they encounter. They debate―often acrimoniously―what their career choices should be, how much money they stand to make, what prestige they can earn in the eyes of others, and what are the criteria by which they should evaluate these decisions.

As their friendships unfold, the young adults of Mansfield Park don’t appear much different from today’s college students. In the brief window of time in which they settle their ideals, professions, friends, and spouses, they show each other their true colors. They discover they have irreconcilable worldviews. They decide what they can and can’t live with. Their romantic and financial decisions bear fruit.

Henry Crawford and his sister Mary, friends of Fanny’s relatives, excuse their personal shortcomings by their upbringing. Raised without the example of stable, responsible adults, they don’t have the confidence (or the will) to operate from a higher set of principles than convenience, social convention, and popular opinions. They admit they don’t have the capacity to trust others or to be reliable in their relationships. Mary is socially adept and attractive, but her cynical biases against concepts and values beyond her personal experiences are crippling. Her intellectual and romantic clashes with Fanny’s favorite cousin reveal the depth of their different approaches to discerning one’s path in life.

The Crawfords had lacked guidance, but Fanny’s cousins have the opposite problem: Sir Thomas confuses his children’s abiding by conventional rules of behavior with authentic character development. Sir Thomas “had meant them to be good, but his cares had been directed to the understanding and manners, not the disposition; and of the necessity of self-denial and humility, he feared they had never heard from any lips that could profit them.”

When three of his four children become involved in public scandals, Sir Thomas’s pain as a parent comes mostly from the realization that he does not truly know who they are. He knows them from the outside―how they tried to do what he expected of them while in his presence―without being acquainted with their minds, hearts, values, and aspirations. Their choices surprise him.

On the other hand, Fanny, despite her social and financial dependence and shy temperament, knows herself. Lacking self-deception or illusions about what will make her happiest in life, she is truly independent on a personal level. When morally unreliable (but financially eligible) Henry suggests that by becoming involved with him, Fanny could bring out the best in him, she delivers her most famous line: “We have all a better guide in ourselves, if we would attend to it, than any other person can be.” By calling him to take responsibility for his own conscience, and refusing to make him a romantic “project,” Fanny shows she understands equal relationships. Her refusal to compromise her self-knowledge by being mismatched frees her to seek a healthy relationship. She and the man she really loves are the only young couple in the novel who do not subscribe to, or settle for, a transactional view of friendship.

Mansfield Park and Fanny Price have drawn acerbic criticism from writers who cannot “like” her and wish the novel “came down” on the side of the sparkling, au courant Mary rather than the quiet, conservative Fanny. That the characters make modern readers uncomfortable says more about what we value, and what we think about how to treat other people, than perhaps we want to admit. The contrast between Mary and Fanny is exactly what we are meant to see: No matter how clever she is, Mary is tragic because she will not give up her self-centeredness; Fanny is heroic because she won’t be browbeaten into going along with the crowd.

Personal authenticity requires the ability to say no, to find happiness in simple things, to value one’s primary relationships, to resist the urge to hide from oneself in a blur of activities and friendships that mask a restless spirit, and to make choices that resonate with one’s true self. At a crossroads in life—like high school or college graduation, or any new beginning—these are crucial reflections deserving deep thought. The most important decisions a person will ever make involve choosing a state in life, establishing a healthy outlook on one’s career and finances, and loving a good person. Each involves surrounding ourselves with a set of people and activities that either will enable or inhibit us from being who we ought to be. By remaining steadfast under tremendous pressure, Fanny Price proves not to be Austen’s weakest heroine, but her strongest.


British television’s 2007 Mansfield Park is a condensed but faithful―and charming―movie adaptation which remains true to Austen’s characterization and the most important themes of the novel. The 1999 feature film is seriously flawed. It alters characters, including Fanny’s, in key ways and introduces plot elements that distract from the meaning of the novel. The 1983 miniseries is faithful in both characterization and plot, but it is missing the production values audiences are used to in Austen films made since the early 1990s.

Read Blog Detail

Portland Worries About Homelessness, While Metro Makes Housing Less Affordable

The Portland City Council has decided to allocate $20 million to solve a perceived crisis with “homelessness” and another $67 million to subsidize “affordable housing.”

As usual with Portland spending, these numbers were pulled out of thin air; they have no connection to an actual strategy. If the Council had done some thinking, it might have realized that Portland’s housing crisis is the result of many factors, including ongoing government policies that are making things worse.

First and foremost is excessive government regulation. Any private investor trying to build more housing faces a gauntlet of barriers, including planning requirements, inspections, density mandates, parking restrictions, environmental overlays, and punitive fees. Many of these interventions serve no purpose other than to ensure that top-down mandates of planners replace market preferences. All of them impose delays and add costs to construction.

To make matters worse, Metro is recommending that no new land be added to the regional Urban Growth Boundary. When this recommendation is finalized next month, it will ensure that the already-high price of buildable land continues to increase.

Government is not the sole cause of the housing crisis; poor decision-making also causes many individuals to become homeless. But deliberately creating a shortage of buildable land through government regulation guarantees that the affordable housing crisis will get worse.

 

Read Blog Detail

When Will the State Land Board Restore the “Trust” in Oregon’s State Trust Lands?

 

By Anna Mae Kersey

When Oregon joined the Union in 1859, it was granted approximately 3.4 million acres by Congress in State Trust Lands, public lands managed by the state to support public education. In so doing, Congress assigned a fiduciary responsibility to the state to produce a profit from these lands for the Common School Fund in perpetuity. Over time, Oregon sold the majority of these lands in an effort to yield more economic benefits for the fund, with some 772,776 acres remaining under state management.

 

Unfortunately, those lands have been poorly managed, especially when compared with other Western states and the federal government.


 

Average Annual Return on Investment

State Trust Lands vs. Federal Management

2009-2013

Jurisdiction Revenues Expenditures Returns per dollar spent
 
New Mexico $554,218,262 $13,516,608 $41.00
Arizona $231,823,603 $16,629,652 $13.94
Montana $107,610,838 $12,443,132 $8.65
Bureau of Land Mgmt. $4,690,082,024 $1,508,484,072 $3.11
Idaho $66,033,347 $23,572,154 $2.80
Oregon (2013-14) $8,096,821 $7,593,305 $1.09
U.S. Forest Service $571,781,109 $5,708,126,237 $0.10

 

 

 


 

When Oregon can barely break even on lands that other states manage for great profit, it is a serious indictment of leadership by the State Land Board.

Furthermore, only 7,400 acres of the 772,776 acres currently classified as State Trust Lands actually meet the criteria of having either short- or long-term revenue earning potential. This means that approximately 96 percent of State Trust Lands show no signs of generating revenue in five to ten years.

The primary reason for the discrepancy between Oregon’s profit margins and those of its peer states is the endangered species restrictions placed on the Elliott State Forest. These restrictions have transformed these lands from profit producing assets into deficit inducing liabilities.

Oregon, in essence, is in default to the Common School Fund. In addition to its obligation to continue to bring in revenue, it is also legally bound to maintain “intergenerational equity” and “cannot benefit current students at the disadvantage of future students, or vice versa.” Neither current nor future students stand to benefit from a deficit.

In contrast, the Common School Fund itself earns significant net revenue for schools each year. Assets of the Fund are invested by the State Treasurer and the Oregon Investment Council and consistently exceed performance expectations, earning an annual average of 13.25 percent return on investment over the past three years, as opposed to the 0.1 percent return on investment by the State Trust Lands.

There can be no public trust in an agreement where one side, time and time again, fails to deliver. On August 13, the State Land Board will meet in Salem to discuss the Elliott State Forest. It is imperative that board members look to the past to prepare for the future. There is already a precedent of transferring lands to private ownership. The board needs to sell those lands that are costing the fund and future generations, so that the trust in State Trust Lands can be restored.

Anna Mae Kersey is a research associate at Cascade Policy Institute, Oregon’s free market think tank. She recently graduated from Mercer University in Macon, Georgia with an Honors B.A. in Philosophy and is pursuing a Master’s of Liberal Arts at St. John’s College in Santa Fe, New Mexico.

 

 

Read Blog Detail

Restore the Trust in State Trust Lands

By Anna Mae Kersey

When Oregon joined the Union, the U.S. Congress granted it control of State Trust Lands, public lands managed by the state to support public education in perpetuity through the Common School Fund.

Currently, 96 percent of Oregon’s remaining State Trust Lands show no signs of generating revenue within five to ten years. The primary reason for this is restrictions placed on the Elliott State Forest, transforming these lands from profit producing assets into deficit inducing liabilities.

The Common School Fund itself, which is invested by the State Treasurer and the Oregon Investment Council, consistently exceeds performance expectations. Over a three-year period ending in 2014, it earned a 13.25 percent average return on investment as opposed to the 0.1 percent earned by the State Trust Lands.

There can be no public trust in an agreement where one side fails to deliver. As such, there can be no trust in Oregon’s State Trust Lands. In the upcoming August State Land Board meeting, it is imperative that board members look to the past to prepare for the future.

There is already a precedent of transferring lands to private ownership in order to maintain the state’s fiduciary responsibility to the fund. The board needs to sell lands that are costing the fund and future generations, so that the trust in State Trust Lands can be restored.

Anna Mae Kersey is a research associate at Cascade Policy Institute, Oregon’s free market think tank. She recently graduated from Mercer University in Macon, Georgia with an Honors B.A. in Philosophy and is pursuing a Master’s of Liberal Arts at St. John’s College in Santa Fe, New Mexico.

Read Blog Detail

Media Release: The Case of the Disappearing Backyard

February 25, 2015

FOR IMMEDIATE RELEASE

Media Contact:
John A. Charles, Jr.
503-242-0900
john@cascadepolicy.org

PORTLAND, Ore. – Cascade Policy Institute today released a report investigating the disappearance of backyards throughout the Portland metropolitan region.

In 1995, the average lot size for a new home in Washington County was 15,000 square feet. Today, new residential housing projects in Washington County list 7,000 square foot lots as “executive housing,” an apparent luxury only for the rich. Has the American Dream disappeared in the Portland region?

The purpose of this research project was to see if the disappearance of backyards was real or an illusion. After examining the adopted land-use plans and accompanying zoning codes of the three metro counties and a cross-section of local cities, it became clear that private backyards in fact are being zoned out of existence, in order to comply with state and regional land-use mandates.

All new development projects on lands recently approved for urban growth boundary expansion in the Portland region have high-density overlays that prevent traditional backyards (roughly 4-5 units/acre), except for a small percentage of all units. In addition, many older neighborhoods with large lots are experiencing an epidemic of teardowns, due to the artificial shortage of buildable land. Homes with large yards are being purchased, demolished, and replaced with several homes or towering apartment complexes.

As a result of density mandates, homebuyers are increasingly paying more while getting less in the way of private open space.

According to report author John Glennon, “Local planners know that most people prefer lower-density neighborhoods; yet zoning codes have been written to take that option away.”

Cascade Policy Institute President and CEO John A. Charles, Jr. noted, “As Metro prepares for another round of possible growth boundary expansions, elected officials should think hard about the effects of land-use regulation on livability. In a state that is already 98% open space, there is no reason to create an artificial shortage of buildable land. The State Legislature should enact reforms this year to remove high-density mandates from local governments.”

The full report, Have Private Backyards Been Outlawed in the Portland Metropolitan Area?, can be downloaded here.

Read Blog Detail

The Elliott State Forest Should Be an Asset―Not a Liability―for Oregon Schools

By Jordan Lofthouse, Randy Simmons, and John A. Charles, Jr.

With Oregon’s schools constantly facing budget crises, why are our lawmakers missing out on the opportunity to give more money to our kids?

As part of the Common School Trust Lands, the Elliott State Forest has the constitutional obligation to generate money for Oregon’s schools. In the last few years, however, environmental interests have carefully manipulated the Endangered Species Act so that the Forest costs taxpayers money instead of providing funds for Oregon’s children.

Lately, harvest levels and revenues have been a fraction of their former levels. Despite potential to harvest 40 million board feet in 2013, actual harvest was only 4.5 million board feet. The expected timber harvest for 2014 is similar. This has resulted in a net deficit of $3 million that is covered by your tax dollars.

The Oregon State Land Board is searching for ways to balance the financial responsibilities of the forest with environmental factors hindering the Forest from providing revenue for schools.

Researchers at Utah-based Strata Policy have identified several options for monetizing the Elliott State Forest so it can meet its constitutional responsibility to Oregon’s children. Privatizing the Elliott State Forest is likely the most financially beneficial option. In a report for the Cascade Policy Institute, Eric Fruits of Economics International concluded that selling or leasing Forest assets could provide stable funding for Oregon schools at approximately $40 to $50 million annually.

A second option is a land exchange between the federal government and the state government. The federal government would receive control of the ESF in exchange for federally owned land that could be more easily monetized for Oregon schools. Other states such as Utah, Minnesota, and California have all successfully made land exchanges to increase revenue for schools.

A third but less likely option consists of renewing a Habitat Conservation Plan (HCP) with federal agencies. HCPs allow timber to be extracted while also protecting endangered species habitat. The former HCP expired several years ago, meaning that harvestable areas in the Elliott State Forest are severely limited. If state and federal agencies can negotiate a new HCP for the forest, timber harvest and revenue can increase while also protecting critical habitat. However, conflicts between state and federal agencies make HCP renewal a significant challenge.

As we consider ways of providing increased funding for education in Oregon, we should press the State Land Board to pursue options that will allow the ESF to fulfill its constitutional responsibilities. We can no longer allow environmental groups and federal regulations to dictate the failure of this trust at the expense of children’s education.

 

Jordan Lofthouse and Randy Simmons are scholars with Strata Policy, based in Utah. John A. Charles, Jr. is President and CEO of Cascade Policy Institute in Portland.

Read Blog Detail

Time for a “New Business Model” for the Elliott State Forest

Oregon’s political leaders have the chance to do what they frequently ask of the state legislature: provide more money to Oregon’s schools. So why aren’t they doing it?

The Elliott State Forest on Oregon’s South Coast is an endowment asset for Oregon public schools and is supposed to be making money through timber sales. Unfortunately, due to mismanagement by the Oregon Land Board, timber harvest levels (and associated revenues) have been a fraction of their former levels.

Earlier this year, the Land Board directed the Department of State Lands to develop a new business model for the Elliott in order to turn it from a “net-negative to a net-positive.” In a new report by Cascade Policy Institute, researchers at Utah-based Strata Policy have identified several options for monetizing the Forest so it can meet its constitutional responsibility to Oregon’s children. One option, privatizing the Forest, is likely the most financially beneficial. In a previous Cascade report, economist Eric Fruits concluded that selling or leasing Forest assets could provide stable funding for Oregon schools at approximately $40 to $50 million annually.

The State Land Board will make preliminary decisions on the “new business model” on December 9. Environmental advocates are pushing strongly to eliminate all timber harvesting from the Elliott, but the Board must turn the Forest into an income-producing asset to fulfill its fiduciary obligations to the schools.

Read Blog Detail

It’s Time to Change Our Failed Federal Lands Policy

By Ken Ivory

In 1976, Congress changed its “policy” regarding our public lands (Federal Lands Policy Management Act, or FLPMA). This “policy” change sought to retain public lands in federal ownership―ignoring the 200-year-old obligation of Congress to transfer title to our public lands.[1]

In 2009, the U.S. Supreme Court, in Hawaii v. OHA, unanimously declared that Congress does not have the authority to unilaterally change the “uniquely sovereign character of [a state’s] admission,” particularly where “virtually all of a state’s public lands are at stake.” This “policy” change has failed Western communities and schools, forest health, wildlife preservation, watershed management, and jobs and the economy―locally and nationally. The Supreme Court has also called these statehood Enabling Acts promises “solemn bilateral compacts between each State and the Federal Government” where both parties have rights, duties, and remedies for breach―even against the federal government if it fails to perform its duties, including its duty to transfer title of the public lands.

However, because Congress changed its “policy” regarding our public lands:

  • Western communities are dying;
  • Western communities have as little as 10% taxable lands to generate revenues for schools, roads, public safety, and public services for the sick and the poor;
  • Western communities are prevented from creating jobs through the responsible use of their abundant natural resources, which further diminishes tax revenues;
  • Western communities are prevented from harvesting even sick and dead trees (let alone our great renewable forest resources), which would create healthier forests less susceptible to catastrophic fires that kill millions of animals, destroy watershed for decades, and harm life and private property;
  • The FBI is now warning that our forests are weapons for al Qaeda jihad efforts instead of renewable resources for creating wealth, funding schools, and providing for healthier forests;
  • Hunters, fishers, campers, recreationists, and others are denied access to public lands as federal agencies arbitrarily close thousands of roads throughout the West;
  • Western states and local governments are dangerously dependent for funding on a broke federal government that is cutting promised funding, robbing revenues derived from Western lands, and even clawing back SRS monies already paid;
  • Western states get between 30-50% of their total revenues from this same broke federal government;
  • Eastern states are paying nearly $9 billion a year to inflict this harm on Western states;
  • As a nation, we are dependent on China for 95% of the rare earth minerals that are essential for national defense technology and modern electronics (including renewable energy technologies), even though an abundance of rare earth minerals is locked up in federally controlled Western lands;
  • As a nation, we are dependent on foreign sources of oil, gas, and minerals, despite having more than $150 trillion in oil, gas, and minerals (and tens of thousands of jobs) locked up in federally controlled lands.

We have the opportunity of our generation to leverage our voices, through local and state representatives, to compel Congress to change its failed “policy” that is killing Western communities, siphoning funds out of Western schools, closing off Western lands, destroying Western forests, locking up Western resources―and in the process destroying Western and national jobs, economic activity, and tax revenues.

It’s been done before. Did you know that the federal government controlled for decades as much as ninety percent of the lands in of Illinois, Missouri, Indiana, Arkansas, Louisiana, and Florida? Those states simply refused to be silent or take “no” for an answer. They banded together and leveraged their individual, community, and state voices and persistently called upon Congress to honor its obligation to transfer title of their public lands.

There is a solution big enough for the pressing problems of Western states, including Oregon. Congress must change its failed, community-killing “policy.” County and state representatives and their constituents should refuse to be silent or take “no” for an answer until it does. Jobs, school funding, better care for and access to our lands, and our economic future depend on it.

Ken Ivory is president of the American Lands Council and a member of the Utah House of Representatives. He has been a guest speaker on this issue for Cascade Policy Institute, Oregon’s free market think tank.

[1] See, A Legal Overview of Utah’s H.B. 148 – Transfer of Public Lands Act by Professor Donald Kochan, http://americanlandscouncil.org/downloads/Kochan%20Utah%20Public%20Lands%20WP.pdf

Read Blog Detail

Report Shows Possibilities for Elliott State Forest to Make Money for Oregon Schools

Today, the Cascade Policy Institute released a report analyzing the range of policy options for turning the Elliott State Forest from a liability into an asset for Oregon’s Common School Fund.

The Elliott State Forest (ESF), located on Oregon’s South Coast, is part of a portfolio of lands known as “Common School Trust Lands.” These lands are an endowment for the Oregon public school system and must be managed by the State Land Board to maximize income over the long term. Unfortunately, due to environmental litigation, income from the Elliott’s net timber harvest receipts has been steadily declining over the past two decades. In 2013, the ESF cost Oregon taxpayers $3 million, which was a drain on the Common School Fund.

“The State Land Board has been watching the financial returns from the Elliott State Forest steadily decline for over 20 years, while doing essentially nothing,” said Cascade Policy Institute President John A. Charles, Jr.

“The Elliott is now a liability instead of the $800 million asset it was in 1995. Oregon schools deserve better,” said Charles. “The State Land Board has a fiduciary obligation to take decisive action, and the analysis by Strata Policy helps provide a road map for Board decision-making.”

The Land Board in 2014 directed the Oregon Department of State Lands to develop a “new business model” for the ESF. The Cascade report, prepared on contract by Strata Policy, a Utah-based consulting firm, provides a critical review of various options for accomplishing this goal.

The report divides the known options into three categories: viable options, potentially viable options, and individually unviable options.The top three recommendations – the only ones considered “viable” – are full privatization, a land exchange with the federal government, and completion of a Habitat Conservation Plan that would allow logging in habitat currently used by protected species.

The full privatization option was analyzed at length for Cascade Policy Institute by economist Eric Fruits and published as a separate paper in March. Selling or leasing the forest clearly would result in the greatest financial returns to Trust Land beneficiaries over the long term.

A land exchange with the federal government also could result in healthy financial returns to the Common Schools if any lands could be identified for such an exchange, but that is doubtful given the litigious nature of federal forest management in the Pacific Northwest. Moreover, it would take Congressional approval, which likely would take a decade or more to execute. Such delays appear to be a violation of the fiduciary trust responsibilities held by the Land Board.

Development of a Habitat Conservation Plan (HCP) would face the same bureaucratic challenges. Oregon attempted to develop an HCP in cooperation with the U.S. Fish and Wildlife Service and spent $3 million over a 10-year period without gaining federal approval. Before reviving this effort, there needs to be some reassurance from the federal government that an HCP is actually possible.

The Land Board is scheduled to take public testimony regarding ESF management in Coos Bay on October 8, and will discuss options for a “new business model” at its December meeting in Salem.

The full report by Strata Policy may be viewed here.

Read Blog Detail

A Prescription for Affordable Housing in Portland

A new issue faces Portland. City Hall is considering waiving development fees for developers of market-rate housing in the Old Town Chinatown district. Chinatown is Portland’s oldest neighborhood and has earned an unpleasant reputation. City Hall claims that waiving these fees, which cover a project’s impact on urban infrastructure, can stimulate building in Chinatown. In the past, only developers of so-called “affordable housing” have been granted this waiver.

Critics argue that this is an expensive subsidy for big businesses which aren’t providing affordable housing. However, they assume that market-rate rent is permanent, no matter how much housing is built. This may not be true. As the supply of market-rate apartments increases in Chinatown, the market rate can be expected to decrease. Essentially, housing is made affordable by supplying more of it.

Waiving fees deprives certain city bureaus of funds; but perhaps these funds could be better spent, in this case, by private developers. If the City wishes to revitalize Chinatown, it needs to encourage more people to live there, and the best encouragement is lower rent. This can be accomplished by decreasing development fees and encouraging construction. More housing and lower rents could be good for Portland.

Everet Rummel is a research associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

Read Blog Detail

Leave Lodging Alone

By Everet Rummel

On July 2, the Portland City Council held a hearing on proposed amendments to the Zoning Code concerning short-term rentals. The council chambers were packed with citizens who support legalizing renting one or two bedrooms from a primary residence.

An emerging sector of many local economies is “homesharing,” or renting space in your home to strangers on a short-term basis, usually for a few nights. Smartphone apps such as Airbnb allow owners to list their homes for renters to see. Homesharing is controversial because it remains informal in most places and presents a challenge to the status quo of residential living and conventional hotels.

In Portland, homesharing falls under traditional bed and breakfast regulations. These may be too expensive for the typical homeowner short on cash, so many homesharers operate illicitly.

In an effort to regulate homesharing and make compliance cheaper, the City Council has taken testimony from citizens. Sharers say renting provides them with supplementary income, allowing them to keep their homes or enjoy their retirement years. Renters benefit from low prices and a more authentic atmosphere compared with hotel rooms. Opponents of homesharing fear increased noise, diminished neighborhood safety, and that lucrative short-term rental prices would attract landlords to the market, making long-term rentals less affordable.

However, noise and safety issues probably can be solved by talking to your neighbors and complaining to the police if things get out of hand. A study by the Rosen Consulting Group shows that short-term rentals make up a small fraction of the total rental housing stock in San Francisco, so they are unlikely to affect rents.

With many benefits and low costs, the City should embrace homesharing and interfere with it as little as possible. Council members are infatuated with the idea of requiring sharers to have their homes inspected and licensed and to display their license numbers if they post an ad on Airbnb. But maintaining a listing of high-quality rentals is in the best interest of Airbnb. The site already offers refunds to guests who cancel due to rentals that fail to meet health, safety, and legal standards. Online branding is a powerful tool that may be preferable to city codes for promoting high standards among homesharers.

 

The hotel industry has expressed a desire for “fairness.” It wants short-term rentals to face the same tax and regulatory burdens as conventional hotels. However, hotels are in a better position to comply with taxes and regulations, which will disadvantage cash-strapped homesharers. A truly fairer route would be to reduce the burden on both hotels and homesharers alike.

The City’s discussions so far have ignored the fact that many short-term rentals include entire homes; and no one is sure how to address the question of rentals in apartments or condos, either. Portland is instead leaning toward working out these crucial details later. Given the enormous costs of regulating such a diverse and informal industry as homesharing, Portland should step back from over-regulating it.

Everet Rummel is a research associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

Read Blog Detail

The “Sharing Economy” Benefits Homeowners, Guests

By Everet Rummel

An emerging sector of many local economies is “homesharing,” or renting space in your home to strangers for a short term, usually a few nights. Smartphone apps such as Airbnb allow owners to list their homes for renters to see. Homesharing is controversial because it remains informal in most places and challenges the status quo of residential living and conventional hotels.

In Portland, homesharing falls under traditional bed and breakfast regulations. These may be too expensive for the typical homeowner, so many homesharers operate illicitly.

In an effort to regulate homesharing and make compliance cheaper, the Portland City Council has taken testimony from citizens. Sharers say that renting provides them with supplementary income, allowing them to keep their homes or enjoy their retirement years. Renters benefit from low prices and a more authentic atmosphere compared with hotel rooms. Opponents of homesharing fear increased noise, diminished neighborhood safety, and that lucrative short-term rental prices would attract landlords to the market, making long-term rentals less affordable.

However, noise and safety issues can probably be resolved by talking to your neighbors and complaining to police if things get out of hand. A study by the Rosen Consulting Group shows that short-term rentals make up a small fraction of the total rental housing stock in San Francisco, so they are unlikely to affect rents. With many benefits and low costs, Portland should embrace homesharing and interfere with it less.

Everet Rummel is a research associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

Read Blog Detail

Elliott State Forest Management Puts Small Birds over Small Kids

By John A. Charles, Jr.

Last year the S&P 500 Index had a total return on investment of 32%. That should have been good news for Oregon public schools, which receive twice-yearly checks from an endowment known as the Common School Fund (CSF).

One of the largest assets supporting the Fund is the 93,000-acre Elliott State Forest, near Coos Bay. Net timber harvest receipts from the Elliott are transferred to the CSF, where the money is invested in stocks, bonds, and other financial instruments.

Unfortunately, the Elliott did not return 32% last year. It did not even return zero percent. The state actually lost $3 million. That is quite a feat of mismanagement for timberland valued at more than $500 million.

The Elliott is governed by the State Land Board, comprised of Governor John Kitzhaber, Secretary of State Kate Brown, and State Treasurer Ted Wheeler. Under their leadership, timber harvesting has steadily declined on the Elliott, so that roughly 78% of the forest is off-limits. Since overhead is relatively fixed (e.g., fire suppression and road maintenance), if harvest is halted, the forest loses money.

 

The Elliott is part of a broader portfolio of lands known as the Common School Trust Lands. Under the terms of the Oregon Admissions Act, the primary management objective for Trust Lands is to raise money for the Common School Fund. Therefore, the Land Board has a fiduciary duty to maximize timber harvest on the Elliott.

As environmental litigation became more widespread in the 1980s, it became clear that “fiduciary trust” would start taking a back seat to wildlife habitat preservation in state forests. Knowing this, in 1994 outside consultant John Beuter was retained by the Department of Forestry to look at various options for increasing revenue to the School Fund from the ESF. His conclusion: “Selling the Elliott is the only marketing alternative likely to significantly increase net annual income to the CSF.”

The Land Board did consider this option in 1995-96, but rejected it. Instead, the Board wasted more than a decade on a futile attempt at negotiating with the federal government on a so-called “Habitat Conservation Plan” (HCP) for spotted owls and marbled murrelets. But ultimately the Board was left at the altar by federal negotiators, and the HCP was abandoned.

This continual appeasement emboldened environmental activists, who sued to halt virtually all commercial logging on the Elliott. As single-issue advocates, they have never cared about the collateral damage to schools. They only want one thing, and that is a shutdown of commercial timber harvest on the ESF.

There is a better way. Selling or leasing the Elliott would result in much more revenue for schools while still protecting bird habitat, because private landowners are subject to Endangered Species Act regulation just as the state is. However, it’s well known in the industry that private landowners use different compliance techniques that allow reasonable levels of harvest, while also maintaining necessary habitat. Private owners generally don’t waste time trying to negotiate HCPs.

To its credit, the Land Board has recently acknowledged that the status quo is unacceptable and is reviewing bids for three parcels of the ESF that it may sell off this year, totaling some 2,700 acres. Selling this land would help erase the $3 million loss from last year, but the basic problem remains: The state itself is a poor manager of commercial timberland.

A recent study by independent economist Eric Fruits reinforces the conclusion made by John Beuter 20 years ago, namely that Oregon schools would gain additional revenues of $40-50 million per year if the state placed management of the Elliott in private hands. While this is not the only option available, it is clearly the one that would generate the most money for schools. Therefore, it needs to be seriously considered by the Land Board.

John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.

Read Blog Detail

Airbnb, Destructive Innovation, and Liberty

By William Newell

Portland is brainstorming regulations for temporary lodging made possible by websites like Airbnb. Airbnb describes itself as a “community marketplace for people to list, discover, and book unique accommodations around the world.” The proposed rules would make homeowners pay a tax, get a permit, and follow certain limitations. Portland’s slow and conditioned acceptance of home lodging businesses serves as a microcosm of one of America’s most troubling problems: our fatal conceit.

Individual liberty is a founding principle of American government and one of our most sacred rights. We protect our individual liberty in part because the dynamism that liberty affords individuals is necessary for a flourishing society. The only time individual liberty is to be attenuated is when one individual interferes with the rights of another.

Portland’s rules simply encourage a political system that erodes liberty and takes with it America’s diversity, dynamism, and drive. If a widow living on a fixed income wants to rent a room to help make ends meet, why should she be stopped because her home wasn’t “zoned” for lodging? If a young couple rents an extra room to pay off college loans, should they have to pay tourism taxes? Those who advocate for bans or restrictions not aimed at mitigating externalities and protecting individual rights are really questioning the underlying dignity and respect we should each be afforded.

*In his essay on the failures of central planning, The Fatal Conceit, Friedrich Hayek argued that individuals are best suited to know their own circumstances and to act to improve them. Actions based upon the presumption of superior knowledge by governments to impede individual endeavors tend to fail and to create more harm than otherwise would have occurred.

William Newell is a research associate at Cascade Policy Institute, Oregon’s free market public policy research organization. He is a graduate of Willamette University.

Read Blog Detail

Sale of Elliott State Forest Would Mean Millions More Each Year For Schools

A new report released today shows that if the Oregon State Land Board sold or leased the 93,000-acre Elliott State Forest, public school funding would increase by at least $40 million annually.

Roughly 85,000 acres of the Elliott State Forest are managed for the primary purpose of raising funds for public schools. These lands are known as “Common School Trust Lands,” and the Oregon State Land Board is required by law to manage them for the trust beneficiaries: public school students. Net receipts from timber harvest activities on the Elliott are transferred to the Common School Fund (CSF), where assets are invested by the Oregon Investment Council in various financial instruments. Twice each year, public school districts receive cash payments based on the investment returns of CSF assets.

Due to environmental litigation, the State Land Board lost $3 million managing the Elliott State Forest in 2013. As a result, the Land Board has recently decided to sell 2,700 acres of the Elliott. An independent analysis conducted for Cascade Policy Institute by economist Eric Fruits shows that selling or leasing the entire forest would dramatically increase the semi-annual returns to public schools, and would do so in perpetuity.

According to Cascade president John A. Charles, Jr., “The Land Board has a fiduciary duty to manage the state trust lands for the benefit of the public schools. Losing $3 million on a timberland asset worth at least $600 million is likely a breach of that duty. The Land Board is doing the right thing by taking bids to sell parcels of the Elliott, and should continue to pursue a path of selling or leasing larger portions of the forest. There is no plausible scenario of Land Board timber management that would bring superior returns to public schools than simply disposing of these lands and placing the funds under the management of the Oregon Investment Council.”

Click here to read the report.

Read Blog Detail

Knowledge and Courage: What the West Needs to Take Back Our Public Lands

By Ken Ivory

The federal government continues to control more than 50% of all lands in the western United States. Locked up in these federally controlled lands are more than $150 trillion in mineral values and more recoverable oil―in Utah, Colorado, and Wyoming alone―than in the rest of the world combined. Failed federal forest policies prevent harvesting timber, which would improve forest conditions and wildfire resilience, provide useful consumer products and renewable energy feedstock, and revitalize rural schools and communities. FBI criminal activity alerts now warn that terrorists are encouraging the use of wildfire in fuel-laden federal forests as weapons for jihad.

There is no good reason for the federal government to retain control over these lands and resources in states like Oregon. We in the West have, in good faith, simply tolerated the federal government’s delay in honoring its more than 200-year-old obligation to transfer title to these lands for so long that now most people assume there must be some valid reason the federal government controls our lands and resources.

But there is none. At a recent Continuing Legal Education seminar to several dozen lawyers, a law professor (who is frequently quoted as saying it is “clearly unconstitutional” for states to take action to secure the transfer of title to their public lands) displayed an annual average precipitation map indicating that the federal government retains control of western lands because they are “arid.”

The second reason he gave was that the founders of the western states simply gave up their lands as a sort of ransom for the privilege of statehood, citing half a sentence in the statehood enabling acts: “… forever disclaim all right and title….” The funny thing is, this same half sentence is word-for-word the same in the statehood enabling acts of almost all states east of Colorado, where the federal government did dispose of their public lands.

In fact, for decades, as much as 90% of the lands in Illinois, Missouri, Arkansas, Indiana, Louisiana, Alabama, Mississippi, and Florida were kept under federal control. Then, one man had the knowledge and courage to rally citizens to compel Congress to transfer title to their public lands. His name was Thomas Hart Benton, a Democratic U.S. Senator from Missouri featured in President John F. Kennedy’s best-selling book Profiles in Courage.

The statehood enabling acts promising to transfer title to the public lands are the same for all states west and east of Colorado. It’s been done before―repeatedly and recently. And, returning these lands to state control is the only solution big enough to fund education; better care for our lands and forests; protect access; create jobs; and grow local, state, and national economies and tax base.

If we fail to stand up and take action to secure state and local control of our lands and abundant resources, it will not be because it is illegal, unconstitutional, or impossible. It will only be because we―and the local, state, and national leaders we “hire”―lack the knowledge and the courage to do what has been successfully done before.

Do your local, state, and national leaders know why there is a difference between the way the federal government has handled eastern and western lands? Have you inquired what specifically they are doing to compel Congress to honor the same statehood promise for our children and our future that Congress already kept with Hawaii and all states east of Colorado? Have you asked them what groups or influential individuals they will bring to the effort? Have you asked them what specifically you can do to help?

Now is the time to let our representatives know how transferring federally controlled lands back to the state can vastly benefit Oregon’s economy while preserving and using wisely our wealth of natural resources.

Ken Ivory is president of the American Lands Council and a member of the Utah House of Representatives. He was a guest speaker on this issue for Cascade Policy Institute in November 2013.

Read Blog Detail

Metro’s War on Single-Family Housing Continues

For more than a decade, the regional government, Metro, has been quietly herding people into high-density neighborhoods. For those unaware of this policy, the recently announced plans for 80 acres of development near the light rail station at Sunset Transit Center should be a wake-up call: The developers plan to build 2,175 new housing units, and none of them will be single-family homes. In order to meet Metro-imposed density requirements, the project will be dominated by mid-rise apartment complexes, along with commercial and retail buildings.

Metro anticipates that virtually all future development projects will be similar. In draft documents for a planning exercise called “Climate Smart Communities,” Metro notes that the current number of Portland-area households in mixed-use neighborhoods is 26%. By 2035, that number likely will rise to at least 36%. No options for reducing density are being studied.

Metro’s vision of ubiquitous apartment bunkers means that the region will slowly become a childfree zone, because few parents wish to raise their children in vertical housing. Portland parents, and those who hope to become parents, should ask hard questions about why the Metro Council thinks this is a great leap forward for livability.

John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.

Read Blog Detail

Ken Ivory to Speak on Transferring Public Lands

Join Cascade Policy Institute as we welcome Utah’s Ken Ivory to share his insights on how to solve many of the western states’ problems through the transfer of public lands.

Ken Ivory (R-UT, District 47) was elected to the Utah House of Representatives in November of 2010. Ken campaigned as a candidate of the “Dad Party.” Ken and his wife, Becky are the parents of four children. Given the daunting challenges that face the state and the nation, Ken took time from his business, mediation, and estate planning law practice to “secure the blessings of liberty” to his posterity.

Ken Ivory will explain why the Transfer of Public Lands is a solution big enough to fund education; to better care for the lands; to protect access; to create jobs; and to grow local, state, and national economies. If we fail to secure our state’s rights to transfer public lands, it will not be because doing so is illegal, unconstitutional, or impossible. If we fail to enforce this “solemn compact” of statehood, it will be because our leaders lack the knowledge or the courage to do what has already been done before.

As the current president of the American Lands Council, Ken educates legislators and community leaders throughout the country about their jurisdictional rights and duties to manage, protect, and care for the lands within our borders. Ken is the author of Where’s the Line? How States Protect the Constitution.

Hors d’oeuvres, a dessert buffet, and a no-host bar will be provided.

Sponsored By

Read Blog Detail

Statement on the Columbia River Crossing Project

For Immediate Release

Media Contact
John A. Charles, Jr., john@cascadepolicy.org
503-459-3727
Sarah Ross Wolf, sarah@cascadepolicy.org
503-242-0900

Statement on the
Columbia River Crossing Project

PORTLAND, Ore. – In light of the decision by the governors of Washington and Oregon to shut down planning for the Columbia River Crossing (CRC) project, John A. Charles, Jr., President and CEO of Cascade Policy Institute, issued the following statement:

“The CRC was never a solution to any transportation problem, and the Washington State Legislature did the right thing by refusing to appropriate more money for it.

“As the two Northwest governors move forward, they should consider the following points:

  • The Interstate Bridge is not in any danger of imminent collapse and should be used for decades to come.
  • Expansion of rail transit between Vancouver and Portland should be taken off the table. Existing express bus service operated by C-TRAN is already providing excellent transit between the two cities.
  • Any new bridge should have a minimum river clearance of 144 feet, which matches the Glenn Jackson Bridge.
  • The governors should consider building at least two new Columbia River bridges in the region, one to the west of I-5 and one to the east of I-205. The reasons are to create redundancy in the case of an earthquake, and to provide better connectivity between the states. By dispersing traffic across four bridges, most congestion problems will disappear, making all classes of bridge users better off and reducing emissions caused by congestion.

“We have ten bridges across the Willamette River in Portland, and each serves an important purpose. There is no policy reason why we should restrict the number of Columbia River crossings to just two.”

###

Read Blog Detail

Beaverton Wants More Affordable Housing

By Doug DeFilipps

The Beaverton City Council is considering exempting non-profit organizations that open new affordable housing units from paying the city’s property tax. An associate planner for the city said that “affordable units [are] going to be a major challenge in the future” because “[t]he housing market is tight, and a lot of affordable units in Beaverton are occupied by residents who could pay more but opt for cheaper housing.”

If the goal is affordable housing, then the city should ease the tax and regulatory burden on all development and businesses. That way it would be easier for developers to build new housing, and housing would become more affordable. If a major cause of the lack of affordable housing is “people who could pay more but opt for cheaper housing,” then it makes sense to try to give everyone more, less expensive options.

Developers of affordable housing should not be given special treatment. Why should other developers, not to mention businesses and residents, be taxed more than these affordable housing groups? Why should they be forced to make up the shortfall?

Government entities, including the Beaverton City Council, have an obligation to treat all citizens and businesses fairly and equally, and not to pick favorites.

Doug DeFilipps is a research associate at Cascade Policy Institute. He is a graduate of Santa Clara University.

Read Blog Detail

Supreme Court Should Reject Federal Regulation of Forest-Road Rainwater

By Daniel A. Himebaugh

Is rain in the woods the equivalent of hazardous waste? The answer might seem obvious, but the question is one that the U.S. Supreme Court will answer soon, in the case of Georgia-Pacific West v. Northwest Environmental Defense Center.

The environmental organization Northwest Environmental Defense Center sued Oregon state officials and several timber companies in 2006, seeking to require them to obtain federal Clean Water Act permits before using or authorizing the use of forest roads. NEDC won at the 9th U.S. Circuit Court of Appeals in 2011 by convincing the court that rainwater flowing through forest road ditches must be treated as industrial pollution that requires a federal permit.

In briefs with the Supreme Court, timber harvesters argue that requiring Clean Water Act permits for forest road runoff would do little to improve the environment, but would greatly harm logging in the United States.

Indeed, expanding federal Clean Water Act authority to cover forest road runoff makes no sense if the objective is to improve water quality. A new permitting regime would interfere with state programs that are already being enforced.

At last count, there were more than 150 state laws designed to prevent logging from becoming a major source of water pollution. According to a study made available by the U.S. Forest Service, such regulation is effective because it fosters flexibility, avoids impractical one-size-fits-all restrictions, and improves compliance.

Furthermore, federal permitting will create tremendous new costs. As the Supreme Court noted in 2006, the cost required at that time to obtain Clean Water Act “dredge and fill” permits was staggering―$271,596 for an individual permit. Similar costs would apply to as many as 5 million landowners if the court accepts the idea that forest road runoff requires a Clean Water Act permit. Big operations that can afford it will pay (and pass the cost on to consumers). Many small operations―which make up the majority of forest land owners―simply will not be able to pay.

Regulating forest road runoff under the Clean Water Act will also lead to intolerable delay. A few years ago, EPA was forced as a result of litigation to create a rainwater permitting program for shipping vessels. EPA needed over two years to get the program up and running, and that program has a much smaller scope than a program covering forest roads would have.

How long would it take the agency to develop a program for forest roads? Nobody knows, but one thing is certain: Any delay in developing a new program would harm timber harvesters, confronting them with a brutal choice. If they continued using forest roads, they would run the risk of becoming a defendant in a Clean Water Act lawsuit. But no longer using forest roads would mean abandoning their livelihoods.

The right path for the Supreme Court should be clear: The justices should consider the destructive effects of treating forest road runoff as industrial pollution under the Clean Water Act, and reject NEDC’s claims when they rule on Georgia-Pacific West v. NEDC.

Daniel A. Himebaugh is an attorney with Pacific Legal Foundation in Bellevue, Washington. He represented over a dozen timber industry, conservation, and educational organizations in filing a friend-of-the-court brief urging the U.S. Supreme Court to reverse the 9th Circuit’s decision in the Georgia-Pacific West case. Himebaugh is a guest contributor for Cascade Policy Institute, Oregon’s free market research center. A version of this article was originally published by The Capital Press, October 2012.

Read Blog Detail

Instead of More Public Housing, How About Housing Freedom?

By Victoria Leca

The activist on hunger strike outside Portland City Hall ended his 55-day housing protest on July 26. In response to the protest, the City Council will participate in a Regional Summit on Housing and Homelessness this fall. The Council also will support a public vote on new funding for “affordable housing.”

Homelessness is a tough problem. No matter how much assistance is given, it will never completely go away. Self-destructive choices or mental problems will impede some people from living normal, healthy lives. No matter how much help is provided, they may never live in independent housing, no matter the price tag.

For those for whom price is the barrier to stable housing, “portable rental assistance” programs, which already exist on the federal level, can be a less restrictive option that empowers them to live outside the public housing system. Obtaining “decent and affordable housing on the private market” maximizes opportunities to escape poverty and promotes integration with the wider community. But while preferable to public housing, even housing vouchers come with their own dangers, such as reinforcing dependence on government cash subsidies.

Portland must acknowledge that its restrictive Urban Growth Boundary is at the root of high housing prices. The City Council could make housing more affordable for everyone simply by ending zoning policies that inflate the price of land within the Urban Growth Boundary and make more land available for low-cost housing. But the Council’s proposal simply to fund more public housing for the homeless is neither a desirable nor a sufficient solution to high prices and homelessness. Throwing more public funds at “affordable housing” only masks symptoms, rather than addressing the causes, of high housing prices in Portland.

Victoria Leca is a research associate at Cascade Policy Institute, Oregon’s free market public policy think tank.

Read Blog Detail

Oregon BLM Counties Must Craft Their Own Sustainable Funding

By Randal O’Toole

Many Oregon counties, particularly in Southwestern Oregon, are in deep financial trouble. Coos, Curry, Douglas, Jackson, Josephine, Klamath, Lake, and Lane counties historically received 15 to 33 percent of their revenues from the federal government as payments in lieu of property taxes for the national forest and Bureau of Land Management (BLM) lands in those counties.

Those payments came out of timber sale revenues; but as concerns over the spotted owl and other environmental issues led to a decline in timber sales after 1990, the payments also fell. To ease the transition to more sustainable revenue sources, Congress provided “temporary” funding out of general funds.

Each time temporary funding was set to expire, though, counties complained about a financial crisis; and Congress extended the funding. The latest extension was added to a transportation bill that Congress passed on June 29. But this bill extends the funding only one more year, so county treasuries may be emptied next year. Curry County has threatened to simply shut down, and the Oregon state auditor recently reported that all of these counties have a high risk of financial distress.

The truth is that taxpayers in these counties (of which I am one) have been getting a free ride for decades. While federal lands impose little cost on counties, the payments out of timber receipts have been many times greater than the federal government would have paid if it had paid ordinary property taxes.

Counties throughout the country that have national forests in them receive 25 percent of timber sale receipts. In most cases, this was more than property taxes before sales declined. But the greatest difference was in Oregon, whose valuable old-growth timber produced 40 percent of national forest revenues in the 1970s and 1980s.

Congress allowed the states to divide these “25-percent funds” between schools and county road departments. Most states gave half to each, but Oregon gave 75 percent to roads and 25 percent to schools. This meant that Oregon county road departments were literally rolling in cash in the 1970s and 1980s, but it also meant that the decline in timber sales hit them the hardest.

To make matters worse, the BLM paid a whopping 50 percent of the revenues from most of its western Oregon timber sales to counties. This compares with just 10 percent of timber receipts paid by the BLM to counties elsewhere. While the national forest funds were split between roads and schools, all BLM funds went straight into county general funds.

The result is that these counties have some of the lowest property tax rates in the state. While the average Oregon property owner pays more than $2.80 per thousand dollars in assessed value to the county, property owners in Curry and Josephine counties pay only 60 cents, and rates are also much lower than average in Coos, Douglas, and Jackson counties.

Raising property taxes to somewhere around the statewide average would solve the problems in all of these counties except Lake and Lane. But Oregon law prevents counties from raising taxes without voter approval, and county commissioners suspect that few voters will be willing to double or quadruple their county tax burden.

Representative Peter DeFazio has proposed to divide western Oregon BLM lands into two chunks. One portion, containing mostly old-growth timber, would be set aside for conservation. The other portion, mainly second-growth timber, would be managed as a source of revenues for the counties.

While some environmental groups oppose this plan, I don’t see anything wrong with managing cutover land for timber. But I have to wonder why Southwest Oregon counties should continue to live off of federal taxpayers, who otherwise would get any receipts from Forest Service and BLM sales.

County leaders say these BLM lands (which Congress originally granted to a railroad, then took back when the railroad failed to live up to the terms of the grant) would have been private had they not been taken back by Congress. Perhaps so, but the amounts the counties are asking federal taxpayers to pay—either through an extension of timber payments or via DeFazio’s bill—greatly exceed the amount that private forestland owners pay in property and harvest taxes.

Most of these counties spend the largest share of their funds on public safety, including the sheriff, courts, and jail. Other funds go for health and human services. But most also spend a significant amount of money on what might be called luxuries, including recreation, cultural resources, and community development programs (which mainly means land-use planning).

County leaders need to accept reality and make some hard decisions about their budgets. Recreation, culture, and most public works programs should be funded out of user fees rather than taxes. If users aren’t willing to pay for them, then they aren’t really needed. Counties could also stop funding land-use planning and let the state pay for those programs if it feels they are needed.

To the extent that these cuts aren’t enough to maintain public safety and human service programs, county leaders will have to make it plain to voters that they will have a choice between somewhat higher property taxes or accepting major cuts to these programs. There is no justification for forcing federal taxpayers elsewhere to subsidize county taxpayers in Oregon.

Randal O’Toole is a senior fellow with the Cato Institute and author of American Nightmare: How Government Undermines the Dream of Homeownership. He is a guest contributor for Cascade Policy Institute, Oregon’s free market public policy research center.

Read Blog Detail

Zoning Oregonians out of House and Home

In a four-part feature this week, The Oregonian writes about the failure of government policy to provide “affordable housing” in the Portland metro region. Extensive public subsidies for low-income housing have failed to ameliorate the problem, and legislative efforts to force homebuilders to provide lower-priced housing (at a loss) have been unsuccessful.

What the story largely ignores, however, is that Oregon’s land-use regulatory system makes it illegal to build any kind of housing on most private land in Oregon. In addition, the small amount of land available for housing is subject to extensive planning and zoning requirements. This was explained 10 years ago by consulting economist Randall Pozdena in an econometric study entitled, “The New Segregation.” His analysis found that Portland-style “smart-growth” policies across the country were making it increasingly difficult for low-income and minority households to become homeowners.

Other housing experts, such as Harvard’s Edward L. Glaeser, reached similar conclusions.

Housing was not always so expensive. In the decades immediately following World War II, when there was enormous demand for more homes, the private sector was able to respond because large tracts of surplus farmland were converted to residential housing. Such conversions are illegal in Oregon today.

The Oregonian is correct in saying that government housing policy has failed, but forcing private builders to sell homes at a loss will only make things worse. The real solution is to get government zoning out of the way so housing markets can begin to work again.

Read Blog Detail

Why the Lorax Loves Forestry

By Todd Myers

“From outside in the fields came a sickening smack of an axe on a tree.
Then we heard the tree fall. The very last Truffula tree of them all.”
–From The Lorax, by Dr. Seuss

This spring, a motion picture version of Dr. Seuss’s The Lorax hit the big screen with a not-so-subtle environmental message about the threat timber harvesting poses to the environment. Published in 1971, the book tells the story of a business, led by the “Once-ler,” that cuts down all the trees in the Truffula forest, destroying wildlife habitat, the air, and water in the process.

The Lorax, a friendly, furry creature that “speaks for the trees,” announces what he thinks has caused this catastrophe, scolding the businessman, “Sir, you are crazy with greed.”

Forty years after the book was published, however, a different story has been written in forests across the globe. Rather than being at odds, the Once-ler and the Lorax have found a common interest in making sure forests grow and expand―and many of the world’s forests have benefitted.

In the industrialized world, instead of the scarcity Seuss predicted, forests are plentiful. Last year was the International Year of the Forest, and the United Nations offered some good news. For the last two decades, total land area covered by forest in the Northern Hemisphere―where forestry is particularly active―has increased.

Despite the implication that economic growth, or as Seuss has the Once-ler say, “biggering, and biggering, and biggering,” would lead to environmental destruction, the nations where growth has been most steady are the ones enjoying the best environmental outcomes.

Not only are nations in the Northern Hemisphere seeing forestland expand, but wood is increasingly recognized as one of the most environmentally friendly building materials.

At the University of Washington, researchers compared the environmental impact of building with either wood, concrete, or steel. The hands-down winner for lower energy use, less waste and less water use was wood. While concrete and steel can be mined only once, trees are constantly replacing themselves.

One thing Seuss got right was that once the Once-ler cut all the trees down, his business went down with them. Foresters understand this. Destroying a forest by cutting down every last tree makes no sense, and so there are more trees in American forests today than there were just a few decades ago.

Indeed, the economic value of the trees ensures forests are replanted and available for wildlife and future generations. Even companies not planning on harvesting in 60 years recognize that land with 20-year-old trees is more valuable than land with no trees at all. Replanting isn’t just good for the environment, it’s good for business.

This is not to say the world’s forests are forever safe, or to dismiss the impact deforestation has on the environment. The enemy in these areas, however, is more likely to be poverty than industry. Few people realize the most common use for trees across the globe is as firewood to heat a home and cook a meal. These trees are not cut down by machines, but by people struggling to meet the needs of daily living.

It is true that government regulation of forestry is stricter today than it was forty years ago. It is also true, however, that we are still harvesting a significant amount of wood in the Northern Hemisphere, while preserving vast areas for future generations. Sawmills are making the most of every part of the tree, literally using lasers to measure the best way to saw the log. Technology has made effective regulation possible by using every tree wisely and limiting short-term pressures to overharvest.

Forty years after he sprang from the imagination of Dr. Seuss, the Lorax would be happy to see that, far from disappearing, many forests today are thriving. They are there because the real story of the forests has not been about an unending battle between the fictional Lorax and the hard-hearted Once-ler, but a friendship that understands that both benefit from healthy forests that future generations can enjoy.

Todd Myers is the environmental director at Washington Policy Center. He has more than a decade of experience in environmental policy and is the author of the book Eco-Fads: How the Rise of Trendy Environmentalism Is Harming the Environment. He is a guest contributor for Cascade Policy Institute, Oregon’s free market public policy research center.

 

Read Blog Detail

Introducing the Rural Freedom Project

Check out this introduction to Cascade’s video series, the Rural Freedom Project, highlighting the search for freedom in rural Oregon.

Read Blog Detail

Victoria Taft interviews John Charles about urban renewal zones in Portland

Cascade’s President and CEO, John Charles, tells Victoria Taft why he thinks it’s time to “euthanize” urban renewal zones in Portland.

Read Blog Detail

Hand-Up Versus Handout Tackles Homelessness

By Michael Bastasch

Since 1986, Portland and Multnomah County have launched a slew of programs targeting homelessness, culminating in the “10 Year Plan to End Homelessness” in 2004. Portland and Multnomah County have built thousands of housing units and shelter beds and provide many services, but homelessness is still on the rise. Despite evidence that their approaches may be exacerbating the homeless problem, public officials continue to use the same failed methods.

The city’s approach to eradicating homelessness is based on the Housing First strategy which focuses on getting people into housing, then providing them with services as needed. Emblematic of this approach is the recent construction of Bud Clark Commons. The Commons was finally completed and opened in June 2011 and contains 130 studio apartments for permanent residents, a 90-bed men’s transitional shelter and a day center offering a variety of services. The city wanted a place with as many services as possible under one roof to provide convenient services for the homeless without referring them to other facilities, increasing the likelihood they will get help.

Those living in the Commons’ apartments are the most vulnerable of Portland’s homeless population, and many suffer from severe mental illness and substance abuse. Just giving these people housing won’t help them, however, as many need an environment where they must commit to getting long-term help. In the Commons, recovery isn’t mandatory, and drug and alcohol use are permitted in the apartments (though not in the shelter and day center). Addicts trying to recover will live next to those who are still using, making recovery much harder.

 

Recovery is easier when a community of recovering addicts is fostered as a mutual support network; but in the Commons, such a community may not occur. Jeanine Carr, a community health nurse at the Multnomah County Westside Health Center downtown, reportedly said, “It’s not like (the housing authority) is trying to build a community that will work well together.” Stacy Borke, housing and support services director of Transition Projects Inc., said, “The housing authority and the city are taking real leaps of faith,” with regard to fostering a community that works well together.

More concerning than the dynamics of the Commons’ residents, however, is the cost. The building cost $49.6 million dollars and will require federal and local subsidies to operate throughout the year. The permanent housing will cost somewhat less than $1 million annually, and the temporary shelter and day center will cost a little under $2 million annually. But even if all the services and housing capacity of this building were utilized, it still wouldn’t be enough to accommodate all the homeless in Portland. How many more $50-million-dollar buildings can the city afford or spare the land for?

These grandiose public projects may be well intentioned, but they cannot achieve results at a reasonable cost. The city of Portland and Multnomah County have poured tens of millions of dollars (over $31 million on average annually from 2001 to 2003) during the past 25 years into combating homelessness, but their spending is utterly useless when aimed at such projects. Much more efficient ways to combat homelessness require little government involvement.

One way is to allow private charities to take over where government intervention has failed. Private charities are voluntary and able to work with the homeless throughout their lives, requiring those they help to make a commitment to getting sober and back on track. Union Gospel Mission (UGM) in downtown Portland has a LifeChange program that works with homeless individuals suffering from drug and alcohol addiction and creates a recovering addict support network. UGM requires those in the LifeChange program to work in their store and at their mission downtown, giving them valuable career skills. They explicitly reject the Housing First approach and focus on getting people sober and responsible before transitioning them back to normal life.

Another way to combat homelessness is to follow the example set by Dignity Village, a homeless community near the Portland International Airport. The Village is campsite with wood shacks that was designated by the city in 2001. It requires all residents to pay $20 per month and to volunteer time to help the community. No drugs or alcohol are allowed, and the Village is self-governed by a board of directors elected by residents every year. The Village teaches residents to be entrepreneurial since they operate small-scale businesses on their properties. In fact, 50-75% of residents have income from work or benefits. Dignity Village also has a low cost to the city, estimated at $14,990 per year for city services and about $30,000 per year for internal costs (which Village residents pay themselves). It is much less expensive per person per night than transitional housing. Most importantly, the Village demonstrates that the homeless can take care of and provide for themselves when they are given a place to do so and are left unmolested.

The city continues to give handouts and spend millions of taxpayer dollars to achieve scant results. Bud Clark Commons, though generating a lot of attention, is just a repetition of the same failed policies of the past 25 years. More efficient and compassionate ways exist to tackle homelessness, with places like Dignity Village or through private charities. Spending taxpayer money doesn’t automatically yield results. No matter how much nicer homeless shelters get or how many more Portland builds, it doesn’t stop homelessness. Rather, it tends to exacerbate it and keep people dependent.


Michael Bastasch is a research associate at Cascade Policy Institute, Oregon’s free market public policy research organization.

Read Blog Detail

Karla discusses Alberta’s Bill 36 on CAEPLA Connections in Canada – Part 2

Click here for Part 1

On July 2, 2011, Karla continued discussion with CAEPLA CONNECTIONS LANDOWNER TALK RADIO about an Alberta land use law similar to one instituted in Oregon.

From the CAEPLA website…

This week on CAEPLA Connections Landowner Talk Radio, Keith Wilson, Karla Kay Edwards, and Kevin Avram discuss the impact of Bill 36-like legislation in Oregon. Bill 36 is an Alberta law that is going to change Alberta in a way that few people realize. In many instances, it is also going to affect property values in ways that few people have thought about. The Bill is the Stelmach government’s central planning land use law.

For more information, visit http://www.landownerassociation.ca

Read Blog Detail

Karla discusses Alberta’s Bill 36 on CAEPLA Connections in Canada – Part 1

Click here for part 2

On June 25, 2011, Karla visited with CAEPLA CONNECTIONS LANDOWNER TALK RADIO about an Alberta land use law similar to one instituted in Oregon.

From the CAEPLA website…

When Alberta Cabinet Minister Mel Knight was asked if there was any democratic jurisdiction anywhere, that had implemented the kind of land use laws and central planning embodied in Alberta’s Bill 36, he responded by saying, “Yes, in Oregon.” And Oregon did it 40 years ago! Since then, other than Alberta, no one has copied Oregon’s way of doing things, and with good reason. It’s been a disaster for property rights.

For more information, visit http://www.landownerassociation.ca

Read Blog Detail

Karla Testifies on HB 3290 to Allow More Land Use Options for Farmers

On May 10, Karla Kay Edwards testified before the Senate Environment and Natural Resources Committee on HB 3290.

Click here to listen to her testify. Karla’s testimony starts at 45:29.

Read Blog Detail

FEDERAL LANDS: Should we sell federal lands to pay off the national debt?

By Glen Stonebrink, Guest Writer

History: A historical understanding of so-called federal lands is necessary in order to grasp the true “intent” of their existence and usage. From the Pilgrims of 1620 and the creation of the original colonies, there was no such thing as federal lands because there was no “federalism.” As the people of the colonies became equally and increasingly abused by the King of England, they found it necessary to join their efforts to address their concerns to the King – thus the birth of the Continental Congress, which later was used for their common defense and war against England. It was this newly created Continental Congress that started the road to federalism among the separate and sovereign states. Even though each state gave very little in rights or property, they did give away some degree of their power to federalism.

As the Revolutionary War was nearing its end and prior to the formation of “the United States” as we know it, two basic events were taking place: (1) the western colonies/states were looking to extend their western boundaries into the Ohio Territory in order to accommodate more settlers, which thus would create additional wealth for their individual sovereign states; (2) soldiers from the Revolutionary War soon would be returning to civilian life and were desperately seeking new soils to cultivate, but more importantly their promised wages for their service in the war.

Both of these events were giving rise to a problem. States with no western boundaries were not happy about the expansion of those that did, and the Continental Congress was not able to pay the back wages of the armies. To satisfy both issues the Northwest Ordinances (1784 & 1787) were adopted. The 1787 Ordinance codified how new states were to be formed: on equal footing with the original states in every respect whatsoever, and by selling the western lands the “federal government” could pay its debts. Obviously, there were many land grants and homestead previsions, but clearly these lands were to be “disposed of” – not retained!

It is critical to understand that in the beginning the original states agreed through the Northwest Ordinances that newly formed states were to enter the Union “on equal footing” with the original states in every respect whatsoever, including debts and obligations, and these lands were to be disposed to bonafide purchasers. This is where the debate about federal lands begins.

Intent: Who would have envisioned among the pilgrims, settlers, pioneers or especially the framers of the founding documents that someday there would be an overpowering federal government which would claim ownership over huge amounts (nearly 30%) of this newly formed country? NONE! The thirteen original and sovereign states never would have agreed to a central federal government owning large amounts of the soils within “their boundaries” as a price for statehood within the Union. In fact, before there were nine states (2/3 of 13) in agreement to forming the United States with a binding Constitution, there was an insistence that a Bill of Rights be produced that would limit the power of the federal government to only those things specifically listed within the Constitution, and everything else was to be retained by the individual states or the people.

The intent of ownership of the soils within each state’s boundaries was made extremely clear with the Northwest Ordinances’ Equal Footing Doctrine. The Continental Congress through the Northwest Ordinance, on July 13, 1787, provided that when each of the designated states in the territorial area achieved a population of 60,000 free inhabitants it was to be admitted “on an equal footing with the original States, in all respects whatever.”

To further emphasize the strength of this law that was to determine new statehood, Georgia and Virginia ceded their claim to large areas of western lands, but only on the condition that new states should be formed therefrom and admitted to the Union on an equal footing with the original States. Texas, on December 29, 1845, then an independent nation, “was admitted into the Union on an equal footing with the original States in all respects whatever.” In fact, since the admission of Tennessee in 1796, Congress has included in each State’s act of admission a clause providing that the State enters the Union on equal footing. The Act of Congress that admitted Oregon states ACT OF CONGRESS ADMITTING OREGON INTO UNION [Approved February 14, 1859] Whereas the people of Oregon have framed, ratified, and adopted a constitution of State government which is republican in form, and in conformity with the Constitution of the United States, and have applied for admission into the Union on an equal footing with the other States….

So if the founders of the Constitution did not indicate any intent on retaining large amounts of federal lands, what exactly were their intentions for the uses of federal ownership? The answer lies within the Constitution (Article 1, Section 8; Article IV, 5th Amendment and 9th/10th Amendments) and is supported by The Federalist Papers.

Article 1, Section 8 – Powers of Congress:

  • To establish Post Offices and Post Roads;
  • To exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of particular States, and the acceptance of Congress, become the Seat of the Government of the United States, and to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings….

Their intent is quite clear as to the reasons for federal ownership: roads, post offices, needful federal buildings, military facilities and dockyards. Nothing else is listed. There is not a clause that says “…and anything else Congress chooses any time they wish.” There is not a clause that says “…and Congress may choose to be prejudiced against certain states by retaining ownership of large quantities of land.” Or a clause that says “…and Congress does not have to treat new states on equal footing in every respect whatsoever with the original states.”

The key words in the above Constitutional language need close scrutiny in order to understand the full intent. “To exercise exclusive Legislation in all Cases whatsoever…” simply means the federal government would have full legal power to own and control their property within any particular state without any interference or taxation from that state. Does this mean then that since the Constitution grants power to the federal government to levy taxes, the government simply may buy all the land within a state and have full and unchecked power over the entire state? No! The state first must give away its control and power by Cession of particular States, and then the Congress (not just a federal agency) must agree. This means the two United States Senators from the state in question would have a strong voice, as well as the state’s members to the House of Representatives. How would a state agree to grant the federal government exclusive legislation? This is addressed with these words “…by the Consent of the Legislature of the State in which the Same shall be….” Again, the people who are elected to serve in the legislature of the state in question have the final say as to whether or not to grant the federal government these powers over lands within their state. James Madison wrote in Federalist Paper number 43: And as it is to be appropriated to this use with the consent of the State ceding it; as the State will no doubt provide in the compact for the rights and the consent of the citizens inhabiting it; as the inhabitants will find sufficient inducements of interest to become willing parties to the cession; as they will have had their voice in the election of the government which is to exercise authority over them; as a municipal legislature for local purposes, derived from their own suffrages, will of course be allowed them; and as the authority of the legislature of the State, and of the inhabitants of the ceded part of it, to concur in the cession, will be derived from the whole people of the State in their adoption of the Constitution, every imaginable objection seems to be obviated.” Madison makes it clear that the people’s voice through their representation in their legislature and Congress must be heard before powers are to be given away.

Was it the intent for the federal government to purchase lands and obtain exclusive powers on any land for any reason? Of course not, thus the reason for the final wording in Article 1, Section 8, Clause 17: “…for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings.” This limited ownership and specific activities were mentioned by Madison in Federalist Paper 43. If the founders had any thoughts of large holdings of lands within the states, they would have made it clear at this point. They knew full well that the people of the various states would not have agreed to the formation of a new nation had this been the case.

Article IV: This article of the Constitution has two important sections.

  • Section 2, which states, “The citizens of each State shall be entitled to all Privileges and Immunities of Citizens in the several states.” Obviously, if more than half of Oregon’s land mass is owned and controlled by the federal government, the citizens of Oregon are not being “…entitled to all Privileges and Immunities of Citizens in the several states,” when other states east of the Rocky Mountains contain a very small percentage of federal ownership.
  • Section 3, paragraph 2, which states: “The Congress shall have Power to dispose of and make all needful Rules and Regulations respecting the Territory or other Property belonging to the United States; and nothing in this Constitution shall be so construed as to Prejudice any Claims of the United States, or of any particular State.” This section is vital because it only addresses “disposal,” not retention, of federally owned properties, which meant the intent was to do just that very thing (dispose of these lands), and this section addresses “no prejudice against any state.” Obviously, there is a huge prejudice against western states concerning federal ownership within their boundaries.

5th Amendment: The 5th Amendment to the Constitution and an important part of the Bill of Rights addresses the importance of private property. In fact, the wording “…nor be deprived of life, liberty, or property…” is similar and connected to the Declaration of Independence’s wording “…with certain unalienable Rights, that among these are Life, Liberty, and the Pursuit of Happiness.” The Declaration uses the terminology “unalienable rights” and the Constitution uses “…nor be deprived…” within the Bill of Rights. Both documents address “rights of the people.” Furthermore, historical letters point out that Jefferson and others considered using the word “property” in the place of “pursuit of happiness” in the Declaration. They concluded that property and pursuit of happiness were synonymous. However, the creators of the Bill of Rights, including George Mason, James Madison and Thomas Jefferson, did not overlook the opportunity to codify in the Constitution that private property was a right of the people, and knowing that private ownership of the land was indeed the avenue to pursuit of happiness. With huge federal ownership of lands, there is a direct conflict with the intent of both the Declaration of Independence and the 5th Amendment because it denies private ownership.

9th/10th Amendments: There would not have been enough states to agree to the Constitution and the formation of a central government had there not been a Bill of Rights forthcoming, especially including these two amendments to limit the powers of the federal government:

• 9th: The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.

• 10th: The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.

Had the founders ever had any intentions to have the federal government retain or obtain large areas of land within the individual states beyond that explicitly specified in Article 1, Section 8, here was there opportunity to do so, but they did not. They did just the opposite: The wording is self-explanatory.

To conclude this understanding of the Constitution’s intent, here are the words of James Madison, also known as the Father of the Constitution, in his Federalist Paper number 45:

The powers delegated by the proposed Constitution to the federal government are few and defined. Those which are to remain in the State governments are numerous and indefinite. The former will be exercised principally on external objects, as war, peace, negotiation, and foreign commerce; with which last the power of taxation will, for the most part, be connected. The powers reserved to the several States will extend to all the objects which, in the ordinary course of affairs, concern the lives, liberties, and properties of the people, and the internal order, improvement, and prosperity of the State.”

 

The debate: The question is whether to sell the lands held by the federal government to private ownership or to grant the title to the individual states? There is little doubt that federally held lands have a great amount of value. Whether their value would equal the debt owed is not for this debate, but only if these lands could or should be disposed of by the federal government. To this, the answer is “absolutely.”

A prudent-minded person would have to conclude that the founders never envisioned the federal government owning large amounts of lands within the states, or they simply would have mentioned it in the Constitution. Since they did not, then they did not. There is no mention of designating wilderness areas, national forests,[1] or grasslands, or any so-called “beautiful places” to be locked away forever. All the resources of the states were to be for the benefit of the inhabitants of the states or of the state itself.[2]

Every founding document clearly specifies the intent of land holding of the federal government was to be small, limited and for specific purposes only. All other lands were to be in the ownership of the states or of the individual. Moreover, the intent was for the soils to be for productive uses to create wealth for the states and the nation. That, once again, is where we are today.

Sell these lands to bonafide purchaser,[3] pay off our national debt, allow private ownership to makes these lands productive; and this nation will prosper and have a wonderful future.

[1] Federal laws that created national forestlands, monuments, grasslands, etc. have no standing within the intent of the Constitution or any other founding documents.

[2] In the book entitled History of the Oregon Constitution, the lands within Oregon’s boundaries were not intended for federal ownership, but rather for private ownership and productivity.

[3] Bonafide purchasers of grazing lands would be those producers currently with leases and/or qualified for leases under the Taylor Grazing Act of 1934. Purchase price would be based in connection with current leasing rates and on a 30-year amortization.


Glen Stonebrink was Executive Director of the Oregon Cattlemen’s Association (1998-2005) and previously served as Oregon’s State Executive Director of USDA federal farm programs under the Reagan and George H.W. Bush administrations. He held staff and administrative positions in the U.S. Congress and the Oregon Legislature and has been a rancher, a teacher, and a member of the Oregon National Guard. He lives in Rickreall, Oregon.

Read Blog Detail

Selling Public Land Could Help Budget Woes

by Karla Kay Edwards

The federal debt limit of $14.29 trillion dollars is projected to be reached between April 15 and May 16 this year. Many argue that the ceiling must be raised or the U.S. will begin to default on debts owed. Others believe the U.S. must cut costs and begin to live within our means. But the U.S. government is now spending three dollars for every two it brings in, so if Congress succeeds in cutting the proposed $100 billion out of the budget, it might relieve federal borrowing for a single month. (more…)

Read Blog Detail

A New Look at Oregon Timber Lands

In January, the 112th Congress has the opportunity to make a difference for rural counties suffering from lost timber revenues on federal lands. To do so will take both courage and willingness to look at old problems in new or modified ways. One of the many immediate issues to be addressed is the reauthorization of the Secure Rural Schools and Community Self-Determination Act (SRS).

In 2008 $477 million was dispersed to pay for schools, roads and other essential services for local communities. This would back-fill lost revenue for counties from declining timber harvests on federal lands. Oregon alone received nearly $134 million that year.
(more…)

Read Blog Detail

Federal Land Management Agencies Hinder Rural Entrepreneurs

Karla Kay EdwardsCascade Commentary

Federal Land Management Agencies Hinder Rural Entrepreneurs

by Karla Kay Edwards

Download PDF

Rural communities throughout Oregon provide a cultural foundation for entrepreneurs. One of the reasons for this is that folks living in rural areas often find it necessary to improvise when solving a problem rather than running to the nearest store. This necessity to maximize available resources generates small business innovations in rural communities. However, it is often government bureaucracy that stifles the commercialization or growth of many of these small businesses.

(more…)

Read Blog Detail

O&C Lands: “Living Capital” for Rural Oregon Counties

Karla Kay EdwardsCascade Commentary

O&C Lands: “Living Capital” for Rural Oregon Counties
By Karla Kay Edwards

Download PDF

Oregon has been in an economic recession since 2008, but rural Oregon has been struggling for much longer. No single factor can be blamed for the economic downward spiral of rural Oregon, but changes in the management philosophy of our 18 million acres of federal forestlands in Oregon have played a significant part. Many rural communities have been stuck in the conundrum of trying to address chronic high unemployment and poverty without access to significant portions of the abundant renewable natural resources surrounding their communities.

(more…)

Read Blog Detail

Measure 76, Just Another Money Grab

Measure 76 will take a law which sunsets in 2014 and turn it into a constitutional amendment reserving in perpetuity 15% of lottery proceeds for water, parks and wildlife programs. Approved in 1998, the original measure was intended to fix a dilapidated park system and improve watersheds throughout Oregon. Today, many of the measure’s original objectives have been accomplished, raising the question of whether any government program can ever end.

(more…)

Read Blog Detail

Reclaim Oregon’s Forests: We Can Manage

Ben Shelton
Cascade Commentary

Reclaim Oregon’s Forests: We Can Manage

By Ben Shelton

Federal ownership of Oregon’s forests has failed. Oregon, like other Western states, has relied on federal agencies to manage the majority of its land. But it is now clear this century-long experiment has crippled our forests and rural communities. In spite of these hardships, federal bureaucrats add insult to injury with reports like the one released in late July by the Western Oregon Task Force, which offered “too little, too late,” according to Oregon’s congressional delegation. If Oregonians want this to change, we must abandon our deep-rooted faith in federal agencies, reclaim our forests, and manage what is ours.

(more…)

Read Blog Detail

The Diversity of Rural Oregon Communities

Karla Kay Edwards
Cascade Commentary

The Diversity of Rural Oregon Communities

by Karla Kay Edwards

The differences between Oregon’s rural and urban communities are obvious, but the diversity among rural communities often goes unrecognized. Describing rural communities involves considering both geographic and social characteristics. Geographically, Oregon is divided by the Coastal and the Cascade mountain ranges, running north and south, which create three physical regions: the coastal area, the Willamette Valley and Eastern Oregon. Each region includes vast tracts of federally owned land that have an impact on natural resources and economic drivers available to communities in each area. For example, in a recent economic study by Forest2Market, Inc., privately owned forestlands in Oregon contribute $382 per acre to Gross Domestic Product (GDP), versus federal forestlands’ contribution of just $67 per acre. Considering that 59% of Oregon forestlands are federally owned, federal forestland holdings have a significant impact on wealth creation and jobs in rural communities. Rural communities insufficient ability to generate wealth also hinders their ability to comply with state government mandates.

(more…)

Read Blog Detail

Counties Should Rezone Rural Land

Karla Kay EdwardsCascade Commentary

Click here to read the full report in PDF format

Summary: HB 2229 will allow counties throughout the state to take a fresh look at their designation of agriculture and forestry lands. Before that happens, there needs to be further consideration of all the elements needed for commercial agriculture and forestry to be viable. Soil type is not the only thing upon which to base a land designation. (more…)

Read Blog Detail

Wisdom in the Balance: Adaptive Management on State Forests

Karla Kay EdwardsCascade Commentary

The Oregon State Board of Forestry recently reviewed and revised the 2001 management plans for the Tillamook and Clatsop State Forest. Part of the Northwest Forest Management Plan, these plans call for the use of “adaptive management”: a systematic, rigorous approach for learning from actions taken, improving management and accommodating change. “Adaptive management” has been an environmental mantra for more than two decades. But when it is used to an end that isn’t to environmental activists’ liking, they consider it corrupt decision-making. (more…)

Read Blog Detail

The Fatal Conceit

Stephan BurklinCascade Commentary

Click here to read the full report in PDF format

Summary: Created nearly ten years ago, the Oregon Housing and Community Services Department’s “Vertical Housing Program” was designed to encourage mixed-use commercial/residential developments. But despite massive public subsidies invested in these projects, the program is not able to attract businesses to its retail spaces. (more…)

Read Blog Detail

Regarding Management of the Elliott State Forest

John A. Charles, Jr.

Testimony of John A. Charles, Jr.
President & CEO

Regarding Management of the Elliott State Forest
January 26, 2009

The Oregon Constitution requires that Common School Trust Lands be managed for maximum revenue over the long term in order to support K-12 schools. In 1992 Oregon Attorney General Charles Crookham reviewed this mandate and wrote, “Non-economic factors maybe considered only if they do not adversely affect the potential financial contribution to the Common School Fund.” (more…)

Read Blog Detail

Build It and They Will Come…or Not

Cascade Commentary

Summary

The Metro Council is scheduled to vote on a proposed Convention Center hotel in early October. This publicly subsidized project most likely will turn out to be a drastically unsound business decision, potentially wasting hundreds of millions of taxpayer dollars. When no hotel chain has been willing to build the hotel without subsidies, the market for a hotel in that location may not exist. (more…)

Read Blog Detail

Running with Robbers

Matt WingardQuickPoint!

One of the most perplexing things about the current fight over Oregon land use laws is how many wealthy Oregonians publicly support restricting development rights.

Many of them are landowners. So it would seem they are advocating against their own interests and the basic concepts of the free market and private property that sustain their wealth. (more…)

Read Blog Detail

How to Increase Low-Income Homeownership Without Subsidies

Sreya SarkarQuickPoint!

A recent study published by the Urban Institute discusses how the current system of low-income housing assistance is strongly biased against homeownership for low-income households.

An interesting section of the study explains why programs that subsidize the (more…)

Read Blog Detail

Don’t tarnish Oregon’s pioneer spirit

Steve BucksteinQuickPoint!

Oregonians sometimes forget how we got here. The Oregon Trail was an important predecessor of today’s Interstate Highway System. From 1841 to 1869 at least 80,000 pioneers walked beside covered wagons from Missouri to Oregon. They traveled over mountains, across deserts, and forded raging rivers to build a new life for themselves and their families in the open west. Some never made it, dying along the way.

Now, a bill before the legislature would tarnish their (more…)

Read Blog Detail

Community-led housing solution

Sreya SarkarQuickPoint!

Homelessness has become a pressing concern in Central Oregon. The number of people without a permanent home there has increased by half in the past year. More than 2,000 people are presently staying in shelters, on the streets, in their cars or camping out in Deschutes, Jefferson and Crook Counties.

Though 79% of the homeless households are employed, the most common reason for this homeless situation is (more…)

Read Blog Detail

New Study Shows that Selling the Elliott State Forest Could Double the Common School Fund

For immediate release, March 19, 2007

Cascade Policy Institute released a report today calling for a new management strategy on the Elliott State Forest, including the possible sale to private parties. The study, entitled “Another Option for School Funding: Selling the Elliott State Forest,” was authored by Cascade President John A. Charles, Jr. (more…)

Read Blog Detail

Another Option for School Funding: Selling the Elliott State Forest

John A. Charles, Jr.

Introduction

School funding has become one of the most intractable policy issues of the past 15 years. As each session of the Oregon legislature convenes, political leaders vow to bring financial stability to Oregon’s K-12 system, but it never happens.

One positive step that could be taken would be to sell the Elliott State Forest and place the proceeds in the Common School Fund (CSF) endowment. The Elliott, potentially worth $1 billion or more on the open market, is currently earning about 3% annual return on asset value (depending on assumptions), and state managers have no realistic plan for increasing returns. Selling the forest and placing the revenue in the CSF would likely result in annual returns in excess of 8% or more. This would generate an additional $40-$60 million annually for schools. (more…)

Read Blog Detail

Re-arranging Deck Chairs on the Housing Titanic

John A. Charles, Jr.QuickPoint!

The Portland City Council wants to spend at least 30% of all urban renewal dollars on housing subsidies. Their concern is that skyrocketing home prices have made it difficult for lower-income families to live in the city.

Unfortunately, Council members are boxed in by (more…)

Read Blog Detail

Eminent Domain is Never the Solution

John A. Charles, Jr.QuickPoint!

Portland City Commissioner Randy Leonard wants the government to use its power of eminent domain to take property from one set of owners in SE Portland and transfer it to some others, in the hope that they will build an upscale supermarket. Commissioner Leonard believes that the lack of development on a four-acre parcel in the Lents neighborhood is evidence of market failure, which justifies government intervention.

Many local property owners object, but (more…)

Read Blog Detail

Property Rights Defended Before Court

Steve BucksteinQuickPoint!

The U.S. Supreme Court heard oral arguments today in a case that will help define property rights nationwide. The City of New London, Connecticut is using the power of eminent domain to condemn private homes and small businesses to allow a commercial development. The city argues that greater tax revenue from the development is a public purpose worthy of taking the homes of people who, in some cases, have lived their all their lives.

Eminent domain is supposed to be (more…)

Read Blog Detail

Metro "faithful" lose their religion

John A. Charles, Jr.QuickPoint!

Portland’s regional government, Metro, is held up as a national model for how to get local governments to work together on such issues as land use planning. But now Metro Executive Mike Burton has proposed expanding the urban growth boundary to urbanize the 3,900 acre parcel known as the Stafford Basin. This is an area just north of I-205 between Lake Oswego and West Linn, which is surrounded on three sides by upscale suburban developments. The Basin has poor soil but was improperly zoned “farmland” years ago, which has prevented the landowners from building homes the way their neighbors have.

Burton has appropriately concluded that (more…)

Read Blog Detail

Wildfires show need to decentralize federal lands

Angela EckhardtQuickPoint!

In the 1970s the U.S. Forest Service came to look at fires as a natural part of a healthy forest ecosystem and officially ended its long-standing policy of putting out all fires by 10 a.m. Unfortunately, the policy change was only on paper.

There are bureaucratic obstacles to letting fires burn. In addition, the Forest Service receives a blank check for fire suppression-needed revenue in light of the 80 percent decline in timber sales that occurred in the ’90s. Thus, the Forest Service continues to suppress (more…)

Read Blog Detail

Westside story shows land use planning flaws

John A. Charles, Jr.QuickPoint!

Recently the Westside Economic Alliance and others sponsored an economic “summit” to examine the economy of the Portland metro region. The centerpiece was a presentation by economist Joe Cortright.

Cortright’s extensive research showed that Washington County is the economic driving force in the region. Not surprisingly, high technology leads the way. That sector has over 60,000 jobs and is (more…)

Read Blog Detail

Columbia River dredging: It’s the pork, stupid!

John A. Charles, Jr.QuickPoint!

The Oregonian has stirred up debate recently with its investigative report on the proposed deepening of the Columbia River navigation channel. Now proponents and opponents are arguing about whether the net benefits will exceed the net costs, and which interest group will gain the most from federal investments.

Unfortunately, this is an unavoidable problem when (more…)

Read Blog Detail

Urban renewal gets another black eye

Angela EckhardtQuickPoint!

The Portland Development Commission has put 70 urban renewal projects on hold due to the recent Oregon Supreme Court decision in Shilo Inn v. Multnomah County. Amidst the collective hand wringing over the loss of funds, few are discussing the public financing sleight of hand that has been exposed thanks to Shilo.

The court determined that some property taxes dedicated to urban renewal projects were (more…)

Read Blog Detail