Agenda Item 4 - UGB Rulemaking <br />December 3-4, 2015 - LCDC Meeting <br />Page 33 of 56 <br />been previously documented, and as such, it has not been raised in the past as cities determine <br />employment land need under the "traditional" path. It is an important difference between the <br />forecasts of jobs under the traditional method and the forecasts under the proposed simplified <br />method. This report does not consider whether the UO research finding on this matter will be or <br />should be addressed in the future when a city forecasts jobs under the traditional method. <br />It should be noted that the UO research, as well as Tables 6 and 7, are reporting "covered <br />employment" data; that is, payroll employees that pay into unemployment insurance. Jobs that <br />are not covered, including sole proprietorships and many agricultural workers, are not included <br />in the data. The department does not believe that fact significantly affects the paths, either for the <br />traditional or simplified methods, since many uncovered jobs occur on farmland outside the <br />UGB, and those that occur inside UGBs most often occur in residences rather than on zoned <br />employment land. Since the proposed rules only forecasts of new jobs that require commercially <br />or industrially zoned land, covered employment is acceptable data for use. <br />Testing: DLCD conducted some testing of the proposed methods using actual employment data. <br />The department used data from OED, and also used Portland State University (PSU) population <br />forecast data, primarily testing cities in the southwest of the state (since those forecasts are <br />already issued). PSU will issue Eastern Oregon forecasts in June 2016. Forecasts for northwest <br />counties, including the Willamette Valley north of Lane county (approximately one third of the <br />state) will not be issued until June of 2017. <br />The results of the DLCD testing were more revealing when comparing the proposed population- <br />based forecasting methods (in rule 0100) with the OED forecast-derived methods (in rule 0110) <br />to each other. The proposed new population-based method, in most cases, predicts a larger long <br />term employment land need than the proposed OED forecast method. This is likely because most <br />cities are growing in population at a faster rate than jobs are increasing, especially in bedroom <br />communities. <br />Testing also attempted to compare the proposed new simplified methods with the methods under <br />the traditional path in division 24 (using a "safe harbor" in that division which may be <br />interpreted to allow use of a 20-year extrapolated OED forecast). In general, the comparisons of <br />the new methods with traditional methods using EOAs were not conclusive, primarily because <br />the two methods are quite different. This testing suggested that the proposed new methods will <br />predict lower job forecasts, and thus lower employment land need projections than the <br />"traditional" methods. This difference continues even when OED's 10-year forecast is extended <br />to 14 years in the new method (not allowed under the recommended method) using a straight line <br />extrapolation. The difference between the need forecasts in using the old and the new method is <br />most likely due to the fact that the traditional method has a longer (20-year) planning horizon, <br />but also because of the 20% reduction factor in the new method to account for jobs that do not <br />occur on employment land (mostly residential), as discussed above. <br />These tests may suggest that the new rules will be less attractive than the traditional method to <br />cities that are primarily interested in maximizing their employment forecasts and thus <br />maximizing the size of a UGB amendment to add employment land. However, it must be noted <br />