Agenda Item 4 - UGB Rulemaking <br />December 3-4, 2015 - LCDC Meeting <br />Page 21 of 56 <br />Section (5): Next, a city must adjust the number of needed dwelling units by a vacancy factor, <br />which will increase the number of needed dwelling units. The city must use a "base" vacancy <br />rate of five percent, which is a generally accepted vacancy rate throughout the country. This is <br />the rate that will occur in a normally functioning real estate market. The city would then <br />determine its vacancy rate due to "seasonal, recreational, or occasional" vacancies within the city <br />and add that to the base rate. This number is determined by the decennial census. However, the <br />"seasonal, recreational, or occasional" vacancy rate would be capped at 10 percent, meaning that <br />a city's maximum assumed vacancy rate would be 15 percent. <br />Most cities within Oregon have "seasonal, recreational, or occasional" vacancy rates from the <br />2010 decennial United States Census that are well below the 10 percent maximum that could be <br />used under this section of the rule. The exceptions are the city of Sisters (12 percent) and a <br />number of cities along the Oregon coast, where "seasonal, recreational, or occasional" vacancy <br />rates are as high as 71 percent in the city of Manzanita. In discussions with DLCD coastal staff, <br />it is highly unlikely that any coastal cities will see population growth rates in the foreseeable <br />future that would justify a UGB expansion under any circumstances other than the city of <br />Seaside, which is currently considering a UGB expansion under the existing rule set forth in <br />OAR chapter 660, division 24. The introduction of "seasonal, recreational, or occasional" <br />vacancy rates above 10 percent could result in unusual and anomalous residential land need <br />calculations, and might not represent a true need for residential land. Additionally, a city has <br />some control over the use of residences as vacation rentals (but not as "second homes") through <br />the use of zoning and licensing regulations. <br />Section (6): Next, a city would subtract from its residential-dwelling-unit need calculation a <br />projection of the number of dwelling units expected to occur as a result of residential <br />redevelopment and mixed-use residential/commercial development on commercially zoned <br />lands. Such a subtraction is necessary because, (a) the land upon which residential <br />redevelopment occurs is already considered fully developed (example: a single-family residence <br />or duplex is torn down and replaced with an apartment building), and (b) the land upon which <br />mixed-use residential/commercial development occurs is not zoned primarily for commercial <br />development. <br />UO conducted a survey and analysis of cities in Oregon to determine an appropriate rate of <br />residential redevelopment and mixed-use residential/commercial development in Oregon cities. <br />While some data and information was obtained as a result of the survey, the final study indicates <br />that few cities in Oregon collect data on rates of such development. The only general finding was <br />that rates of redevelopment and mixed use residential/commercial development are smaller or <br />non-existent in cities with a population less than 10,000, and showed a general increase <br />correlating with increase in city population. <br />In the absence of good empirical data, the setting of projected ranges for residential <br />redevelopment and mixed-use should be guided primarily by policy considerations. Those <br />considerations are: <br />