PORTLAND, Ore. -- Demand for housing in the city of Portland is at a record high.

Some have blamed the urban growth boundary (UGB) as part of the problem, constricting growth and causing too much density in the city's core. The UGB is the border around Multnomah, Washington and Clackamas counties that keeps farms and forests protected from urban sprawl.

But numbers show the Portland metro area is using just 8 percent of the new space created from recent expansions of the boundary.

In the Bethany area, building is coming back. What used to be fields, is now hundreds of new homes under construction. Much of the growth is happening in an area that used to be outside the urban growth boundary.

"It was an easy choice, an easy choice to move in," said Dennis Masi who moved into The Crossing at North Bethany a month ago from Connecticut. "We had 10 houses that we were going to look at, but they all sold in two days so my realtor brought us here. It was a brand new development with fantastic amenities and it really seemed like the best fit," he said.

Urban Growth Boundary map
Urban Growth Boundary map

A map from the regional government council Metro shows the areas where the urban growth boundary has been expanded in the last 16 years. It's space for 67,000 new homes. The problem is, people aren't using it. Only 5,400 homes have been built in those expanded areas as of 2014, the most recent year for data.

The UGB expansion in Cornelius allowed more than 1,500 homes to be built, but so far, none are under construction. In Pleasant Valley, near Gresham, 5,000 homes were planned and just 150 have been built. And in Forest Grove, where 240 acres were added to the UGB, no homes have been constructed in that area.

"We don't need more land right now, we need more houses," said Jim Middaugh, spokesman for Metro.

The council is required to vote on whether to expand the UGB every six years. He says there are three reasons why we've only really seen demand in Portland's core.

  1. More people now days want to be close into the city versus the suburbs.
  2. The recession stopped virtually every builder and locked up financing.
  3. New subdivisions cost a fortune in infrastructure and many cities that have put bonds on the ballot, have gotten no votes.

"The challenge we've found is despite having plenty of land, it costs a lot to put in the roads, the sewers, the water systems, the parks, the police. All those services that make housing really feasible," explained Middaugh.

KGW just profiled a historic 1912 Northeast Portland mansion slated for demolition to make way for new homes. Everett Custom Homes President Vic Remmers cited the UGB as a reason to go after those kinds of properties.

"It makes for tough decisions. We do need a lot more density, and we have an urban growth boundary and we can't have urban sprawl. We have to build within the current infrastructure," Remmers said.

In areas such as Bethany, Bull Mountain and Hillsboro, financial recovery is in action. Roof after roof, butted up against the new urban growth boundary that will slowly fill in with new families like Dennis Masi's.

"It's cool to see the neighborhood grow and to be one of the first people on this street is something we'll look back on in a couple years and say wow."

Metro just voted "no" a year ago to a UGB expansion, but the council says because so many people are moving here, they're going to do another vote earlier than required, possibly in three years.