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News / Business / Clark County Business

Is Clark County addicted to growth?

Single-family residential development can create short-term gain — and long-term pain

By Jeffrey Mize, Columbian staff reporter
Published: May 26, 2019, 6:05am
4 Photos
New homes under construction are seen near Woodburn Elementary School in 2016.
New homes under construction are seen near Woodburn Elementary School in 2016. Amanda Cowan/The Columbian files Photo Gallery

David McDonald remembers when it took 20 to 25 minutes in 1990 to drive from the Northeast 179th Street-Interstate 5 interchange to his downtown Portland office.

“You can’t even get to the I-5 Bridge from my house in 20 minutes now,” he said. “And I leave at 5:30 in the morning.”

McDonald, a Portland attorney who practices criminal law and lives in the Ridgefield area, has been a vocal critic of the way Clark County has grown and changed.

“It just seems the residential developers, the building industry, over the course of the last three decades have generated a disproportionate amount of growth and have consumed a great portion of land that could otherwise go to economic development,” he said.

That emphasis on residential development continues to play out today as Clark County crafts a $66.4 million plan using public and private dollars to pay for road improvements near the 179th Street corridor and I-5. Success would allow developers to build 1,155 single-family homes, 326 apartments and 99 townhouses.

The proposed housing developments exemplify a long-standing, and largely unsuccessful, struggle to balance a surging population with an equally robust employment base.

The projects also raise a broader question: Is Clark County addicted to growth?

“We are,” said Councilor Julie Olson, whose district includes the area along 179th Street. “It’s almost embedded in our culture.”

Olson, however, said the road improvements also would open the door for commercial and industrial development that creates jobs.

“There are no guarantees,” she said. “But if you don’t build infrastructure in order to support it (commercial and industrial development), it will be less likely they will come. And at some point they will come.”

Residential development and ensuing population growth have contributed to many of the community’s biggest problems, including traffic congestion, overcrowded schools, polluted waterways and fragmented identity.

Home construction is so ingrained in Clark County’s culture that the 179th Street debate has centered on how the county should pay for the road improvements, not whether it should pay for them, given that it faces a $158 million transportation shortfall across the entire unincorporated area.

Randy Printz, a Vancouver attorney who represents Holt Homes and its plans for 606 single-family homes and 99 townhouses, said the second question is irrelevant to the current debate.

“It doesn’t really have anything to do with growth or no-growth because that decision was made when the (county comprehensive) plan was created,” he said.

“This is the plan that was ultimately adopted by the community,” Printz said. “Not one piece of that plan is proposed to be changed here, not one.”

The Clark County Council has received a series of funding options so the housing projects can move forward, including raising taxes on all property owners in the county. For most of the past decade, Clark County was reluctant to raise taxes, not even taking the 1 percent annual increase in collections permissible under state law.

Olson acknowledged that “it’s not a good long-term strategy just to build homes,” but she rejected any suggestion that Clark County is considering extraordinary steps to allow more home construction.

“I don’t think we are bending over backwards to accommodate residential,” she said. “I think we are doing our appropriate work.”

Tim Trohimovich, director of planning and law at the anti-sprawl group Futurewise in Seattle, sees it differently. Clark and other Washington counties are too reliant on residential development, he said.

” ‘Addicted’ might be too strong of a word, but I do think they are overly dependent on it,” said Trohimovich, whose organization has repeatedly battled the county over its growth management decisions. “And particularly they are overly dependent on the most expensive type of development for the county, which is low-density single-family homes on the edge of the developed area.”

Benefits and costs

Population growth in Clark County has led to job creation and good-paying positions in the construction, medical and educational fields, but it also has spawned retail and other relatively low-wage jobs.

Scott Bailey, regional economist for the Washington State Employment Security Department, said the county lost 9,135 jobs, or 6.6 percent of its total, from November 2007 to February 2010, when the nation was hammered by the Great Recession. Since then, it has added 40,532 jobs, he said.

Despite solid job growth this decade, Clark County continues to rank last among the four counties in the Portland-Vancouver area in the ratio of jobs-to-households, an important planning metric for a balanced community that can stand on its own.

Nearly one in three county workers commute to out-of-state jobs, and they paid $221.3 million in Oregon income taxes in 2017. The deluge of commuters heading across the two Columbia River bridges every weekday is a constant reminder of how much the county remains economically dependent on the Portland area.

Local governments accommodate residential development for several reasons, including an obligation to approve development as outlined in their 20-year plans. Residential growth also provides family-wage construction jobs, generates real estate and sales taxes, pays impact fees, and adds new construction value to property tax rolls, which totaled a record $1.5 billion in Clark County for 2019 taxes.

Clark County Finance Director Mark Gassaway said construction-related activity generates 35 percent of the county’s sales tax revenue, a critical part of its financial portfolio, especially with property tax limitations.

“I don’t know ‘addicted’ is the right word,” Gassaway said, “but without growth, we would be in worse financial condition.”

Bailey said 7.9 percent of the county’s workforce is employed in construction, compared with 4.8 percent nationwide.

“We’re a suburban county,” Bailey said. “You would expect more growth to be here than average, but that’s quite a bit more.”

Oregon tax returns from Clark County

NOTE: The number of returns includes joint returns where one or both people work in Oregon and does not necessarily reflect actual number of Clark County commuters to Oregon jobs.

2017: 74,139

2016: 69,465

2015: 72,087

2010: 57,266

2005: 60,134

2000: 55,013

1995: 43,498

1990: 36,038

1985: 26,297

1980: 25,306

SOURCE: Oregon Department of Revenue

All of which means if residential construction suddenly ended, the economic effects would be devastating. That’s what largely happened during the Great Recession, when Clark County briefly had the highest unemployment rate in Washington.

2004 growth plan

Bailey, who compiled the jobs-to-households statistics, said political decisions, including rezoning commercial and industrial land for residential development, have contributed to the county’s imbalance.

“This just didn’t happen,” Bailey said. “This happened through comprehensive planning processes and zoning decisions.”

Fifteen years ago, then-Clark County Commissioner Craig Pridemore used the “addicted to growth” phrase when the county adopted a new growth plan that sought to reverse course and emphasize jobs over houses.

“We have become addicted to growth in trying to fund our public services,” he said in September 2004. “We’re leaving a bow wave of additional expenses that are going to hit us in the future.”

The 2004 growth plan didn’t last for long. Pridemore resigned his commissioner position after winning a state Senate seat that same year, and Commissioner Judie Stanton opted not to run for a third term. The three-person board, with two new members, changed the plan to allow for larger urban growth areas.

Earlier this month, Pridemore said he believes that bow wave is still coming.

“The cost of the sprawling development we saw coming is still hitting home,” he said. “The gut feeling I have is that a bill is coming due and it will start coming due today.”

That bill is buried deep in a number of looming issues, including replacing the Interstate 5 Bridge. Even without major residential growth, there still would be a push to replace an antiquated drawbridge, with one of its spans built in 1917. Residential growth has added thousands of commuters eager to get to and from work without daily traffic jams.

Pridemore said he believes the county’s quality of life has declined with mounting congestion and other side effects from residential growth.

“You’ve got developers who are fine with this,” he said about continued housing development. “You’ve got a population, from my perspective, who is fine with this. … Is there a community voice saying ‘Stop this’? No, not from what I hear.”

Politics and economics

Clark County’s continued emphasis on residential growth is grounded in both politics and economics. Politicians want their communities to be vibrant and growing, not stagnant and declining.

“A fair amount of local government officials just believe that growth is good,” said Trohimovich of Futurewise. “If you don’t grow, you’re going to die.”

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Market forces ultimately determine what the private sector builds. Local governments would be thrilled to accommodate most employers proposing to create hundreds of jobs. They can be prepared by having correctly zoned land supported by roads, sewer and other infrastructure, but they remain largely at the mercy of business interests and economic cycles.

As for housing, planners might gush at the virtues of high-density mixed-use development, but there is no shortage of buyers who want a stand-alone home on a quiet suburban cul-de-sac. Builders react to consumer demand, which is driving the push to open new areas for residential construction.

“We have housing that is unaffordable and that is directly proportional to how much is available,” said Ryan Makinster, government affairs director for the Building Industry Association of Clark County. “Only 33 percent of Clark County citizens can afford to buy a home based on median price of homes in Clark County. And that’s not new building. That’s all stock.”

In some ways, Clark County is in an enviable position because so many people want to live here. Nearly two-thirds of the county’s 54,137 population growth this decade has been fueled by people moving here from other places.

Yet all that growth creates more pressure on roads, schools and other services. Futurewise is quick to point out that the 2015 update to Clark County’s comprehensive plan identified a $158 million transportation shortfall.

“I think a lot of elected officials believe that it’s going to somehow work out, that there really isn’t this deficit,” Trohimovich said. “One thing about people is we have an infinite capacity to fool ourselves.”

Looming decision

The immediate decision facing Clark County is whether to lift urban holding along the 179th Street corridor. Urban holding is a planning designation that prevents an area from developing without funding to pay for road, utilities and other needed infrastructure. More than 2,280 acres were brought into Vancouver’s urban growth area in 2004 and 2007 and have been locked in a de facto moratorium. Clark County estimates there are 1,775 buildable acres in urban holding, with residential land representing 78 percent of that total.

McDonald, who questioned lifting urban holding at the Clark County Council’s May 7 meeting, sees a continuing lack of vision.

“I think the citizens, especially the citizens of the Ridgefield School District, are extremely upset that the county seems to be draining their coffers for a thousand homes and some retail,” he said.

“Maybe it’s their field of dreams,” he added. “I don’t know. Maybe it’s a field of stick houses rather than a field of businesses.”

Printz said he believes the county would be out of compliance with Washington’s Growth Management Act if it does not fund the road projects near the 179th Street corridor, but he conceded that it could lead to an outcome, such as urban growth boundary or zoning changes, that neither his client nor other developers would welcome.

Olson said she and other councilors are cooling to the proposal to use “banked capacity” in the county’s general fund to raise taxes on all property owners. Instead, she is focused on the county road fund, which is primarily funded by property taxes collected in the unincorporated area, and real estate excise taxes, which are collected when property sells.

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“I do believe this will be good for our county,” Olson said about lifting the urban holding designation. “If we can keep people here in Clark County — living, working, shopping, eating and drinking — then we keep our tax base here.”

As residential development continues and the population grows, there will be more pressure to expand urban growth boundaries into new areas.

“There’s still a lot of land out there,” said Bailey, the state’s regional economist. “I think it’s more not ‘When the party will come to an end’? It’s what Clark County residents want their county to look like.”

Columbian staff reporter