Item C: Eugene Comprehensive Lands Assessment

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ECLA: Baseline Assumptions ECONorthwest July 2009 Page 39 The professional literature of planning, urban economics, real estate, and appraisal does not have much to say about redevelopment rates. Conceptually, the factors likely to influence redevelopment (broadly, the conditions of demand, supply, and price for built space and the factors that go into creating that built space) are clear enough, but the magnitude of the empirical relationships has few studies and no professional consensus. The property owner / developer decision to redevelop is not simply deterministic, but complexly probabilistic. The requirements of Oregon law withstanding, no real estate analyst would have any confidence in making a property- specific assessment for every property in an urban area of the likelihood that the property would redevelop over a 20-year period. Fortunately, Oregon law has not yet been interpreted as requiring such a speculative exercise. Many studies related to Goals 9, 10, and 14 have taken a more pragmatic approach. They start with the question “Why does the state care about redevelopment?” The answer, in state law, is that redevelopment implies that we are accommodating the same amount of growth with development of a smaller amount of vacant land (other things being equal), which implies (a) more efficient use of land and urban infrastructure, (b) less need for UGB expansions, and (c) more resource land preserved. In short, redevelopment means that some of the growth of population and employment that would otherwise go on land now does not have to—that growth has been vacant accommodated on land (that is the definition of redevelopment). developed Thus, these studies reason, in the context of a UGB evaluation, what one needs to know is how much of the total forecasted population and employment growth is likely to be accommodated on developed land. If one can estimate that amount, then it can be subtracted from the total forecast of growth, and the remaining growth can be compared to the supply of vacant land to see if it is sufficient (given assumptions about the density of development) to accommodate that growth. Portland Metro, among other jurisdictions, uses this method. That method is sometimes referred to as dealing with redevelopment on the demand . In contrast, a attempts to identify what land (either specifically sidesupply-side method 27 or by class) is forecasted to redevelop and then calculates the amount of growth that land would accommodate. A supply-side method has all the problems noted previously about how to estimate which parcels are going to redevelop. The CAC spent some time discussing these contrasting methods. The consultants’ previous reports did not explain the differences as clearly as we have attempted to here—our motivation for this longer explanation is in part the desire to reduce the In a supply-side method the amount of growth that can be accommodated is derived from some estimate of the 27 supply of land that is forecasted to redevelop.