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					                                                   Draft MINUTES
                                    Newport Housing Needs and Buildable Lands Study
                                        Technical Advisory Committee Meeting
                                            City Hall Conference Room “A”
                                              Thursday, January 20, 2011

TAC Members Present: Jim Patrick, Gary East, Matt Spangler, Lorna Davis, Valerie Soilihi, Joanne Troy, Bonnie Serkin,
Lee Hardy, and Barbara Dougherty.

TAC Members Absent: Larry Henson.

Consultant Present: Bob Parker.

City Staff Present: Community Development Director (CDD) Derrick Tokos, Senior Administrative Assistant Wanda Haney.

Participating Audience Members: John Ray (of Shangri La) and Dawn Pavitt (land use consultant representing a property
owner of a piece of the Wolf Tree property).

CDD Tokos opened the meeting at 2:05 p.m. by noting that the City is embarking on an update to the housing section of our
Comprehensive Plan, which provides the core policies and documentation for how we go about putting together policies and
strategies for assessing housing that the community needs. He noted that it has been over twenty years since the city looked at
housing comprehensively. Tokos said he appreciates those that have agreed to sit on the committee. Tokos introduced Bob
Parker from our consulting firm, EcoNorthwest. Introductions were made. Parker began by saying they were delighted to have
been selected by the city to work on this project. He added that they are doing similar studies for Eugene and Grants Pass.

Presentation. Parker began with a PowerPoint presentation. First, Parker wanted to provide the committee with an overview
of how they think of housing in the context of the state housing system. He will give definitions that come out of the
administrative rule that governs housing. He will go through their work program and the role of this committee and how they
would like to interact with this committee. Parker noted that it has been a long time since Newport’s housing element has been
updated. In addition, NOAA will have some impact on the city. So, he believes it is a good time to look at this. He said the
city’s rationale is much more around housing policy, and that is the approach that is on this project. He explained how land
needs are determined. The way the state requires planning to occur begins by building some principles to plan how much
growth will occur, how much land is available, and where the buildable lands are. The supply part is the buildable lands,
which are vacant and unconstrained either physically or by policy. The key question for planners is what development patterns
make sense. Another thing to consider is if the land use map as it is now is right. Parker gave the components of land needs
analysis. He explained that demand is a function of population and employment growth. Income is the biggest factor, as is
household size, and also age. He explained how they reach that number. He noted that other variables come into play.
Seasonal housing could be an impact. He said that supply is a function of land base. They start with tax information from the
county. They deduct land with constraints. They compare land demand with supply. If there are deficiencies, then the city is
obligated to make changes in that by taking steps to improve the land use in the UGB or expanding the UGB. Parker said that
statewide planning is based on principles that a community’s plan for housing should meet the needs of households at all
income levels. He explained that demand is what has been demonstrated that the population is willing to purchase in the
market place and what builders are building in the community. What they could conclude is that the demand is not meeting the
need. He said they will look at the trends in Newport. In determining dwelling types, they consider tenure (whether own or
rent); financial (assistance or subsidized); crowding (more than one person per room); special populations (runaways,
homeless, people out of incarceration, halfway houses, etc.). They find all needs that can be identified. In determining
demand, Patrick said that housing price is influenced by a range of factors. Income, age, and household size are key elements
affecting housing choices. As age rises, ownership rises. Lower incomes choose multi-family. Determining demand builds
from the population forecast. It requires assumptions about persons in group quarters, household size, mix, and vacancy rates.
Parker showed the formula they use to determine demand. He said that they have to make sure the city complies with state
requirements. He discussed Goal 10, which requires that the buildable lands inventory encourage adequate number of housing
units at affordable pricing. In order to accomplish this, the city has to have the land supply that can supply the identified need.
Parker said that they will look at the zoning code to see if it creates barriers. He gave an example that if the city determines
that there is not enough housing for lower income housing apartments, the city will need to designate land for apartments; but
that doesn’t mean builders will build them. He said that cities can provide enough land, but typically cities are not in the
business of building housing. Parker noted that needed housing types are defined by state statute, such as attached, detached,
owner, renter, single-family, multi-family, subsidized housing, mobile home or manufactured dwelling parks, and
manufactured homes on individual lots. Parker showed the administrative rule OAR 660-008 regarding housing, which
provides the opportunity for the provision of adequate numbers of needed housing units through the efficient use of buildable
lands within UGBs. He gave the definition of buildable lands as residential designated land within the UGB, including both

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vacant and developed but likely to be redeveloped, that is suitable and available for residential uses. He noted that public land
is generally not considered available for residential uses. Parker gave the definition of suitable and available by explaining that
land is considered as such unless it is constrained by one of the following: a.) severely constrained by natural hazards as
determined by statewide planning goal 7; b.) subject to natural resources protection measures (goals 5, 15, 16, 17, 18); c.) with
25% or greater slope; d.) in the 100-year flood plain; or e.) cannot be provided with public facilities. Defining redevelopment,
Parker explained that it is where development has already occurred and exists, but it is likely that the existing development will
be converted to more intensive residential uses due to present market forces. Parker said that one issue he noted in our code is
that lower density housing is allowed in higher density zones now. Parker explained their work program. First is to forecast
the need for residential land within the UGB. This includes buildable lands inventory, housing needs analysis (includes
looking at state trends and recent development trends), determine residential land sufficiency, and evaluate policy and program
options to address identifying housing needs. They will hold several TAC meetings. He reiterated that the emphasis of this
project is on policy to better address identified housing needs. They will take supply and demand to determine sufficiency and
then evaluate policy options. What they recommend to the city will be brought up to the Planning Commission and the City
Council for adoption for the comprehensive land use plan. Program options will not only be what the city offers, but also what
the city coordinates with their other partners. Tokos noted that what the city is really interested in getting to is policy
discussion and the TAC’s input about what the city can do in working with partners to better achieve the type of housing
needed in this community. Parker said that he would like the implementation measure to be reflective of the collective
discussion of the TAC. When it moves into the public realm, he would like this to be endorsed by the TAC; so they are
looking for input from the TAC. Parker gave the TAC schedule. Today’s meeting is the kick off. On February 10 th, they will
present the inventory results and what assumptions went into that. February 24th, the TAC will review the housing needs.
Policy implications and options will be discussed on March 17th. April 14th will be for policy refinement. Parker noted that the
grant requires work be completed by May 31 st. He said that another meeting could be added if we determine that it would be
beneficial to continue talking about policy issues. Tokos said that with respect to the schedule, this timeline does not include
public outreach as part of this process. Some of the recommendations may warrant public outreach before this is adopted, so
public outreach will be at the time the recommendations are implemented. Parker said that what he perceives to be the best use
of time and efforts for these TAC meetings will be around policy. A lot of time goes into the technical matters, but they will
work closer with Tokos on the technical parts. What he will bring to the TAC is findings that begin to form what actions the
city should take to address housing needs.

Discussion. For discussion, Parker had several questions relating to Newport’s issues. He wanted to find out what the most
pressing housing issues are, and what the opportunities are for addressing these issues. He wanted to know what the barriers
are for addressing these issues. He wondered if there are specific housing issues that they should pay more attention to. He
asked what outcomes the TAC desires from the study.

Jim Patrick pointed out that a lot of the cost in housing construction is code driven, which has had a very big impact on the
pricing of houses. Parker said they would put that in other cost factors. Land has cost, about 40% of the dwelling unit. Cities
are not going to have a lot of control over materials.

Bonnie Serkin agreed with Patrick. She said another thing that is unique to Newport is the climate. That is why in Wilder they
are building beyond code. They are building to last. They are building sustainable homes there. She said it is an education
process. They hope to demonstrate that operating cost is less over time; and the construction cost can be taken back out of the
equation over time. She said it takes different arithmetic to come to this. Parker said that if you go back to demand versus
need, space is a big determination of what housing costs. The size of a house has gone down a little bit, but most households
want more house than they need and they may have more than they can afford. He noted that there are consumer expectations
that are challenging to work with. He said that balancing the concept of need and what people can actually afford is

Gary East said that the trend we are starting to see is that some bargain builders are offering consumers more house at an
affordable price; more so than what is on the resale market right now. They do build to minimum code standards. The
efficiency of the house doesn’t play quite as key a role as getting as much house as they need within their budget. Lee Hardy
said that in effect though, they are buying into something that over time will cost more than what Serkin had said. East said
that the consideration is the bottom line. In the past, we have seen construction at better standards, but now we are starting to
see budget housing. Hardy wondered if the city couldn’t require better-than-basic-building-code standards. Patrick replied that
no because there is a statewide code. There is one building code for the entire state, and a bunch of different codes increases
the costs and doesn’t get us anything.

Tokos said that one housing issue is that we have not had a significant number of multi-family rental housing developments
since the early 90s. Our rental housing stock is old. He wondered if our multi-family zoning is in the right place. He gave an
example of Little Creek Apartments not being in a good place way up north. He said the rental markets can be tight. There are
some issues in desirable workforce housing. Hardy said she doesn’t believe it’s not so much a shortage of multi-family per se.
She said there is a lot on the rental market that otherwise wouldn’t be. She said that the issue is what the house is worth and

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what they can get for rent. She wondered if when assessing housing for all incomes, if the consultant takes a look at what
supporting that type of housing costs the community in the long run. Parker said no, not in the past. He said it is complicated
and never yields solutions. He said the typical measure of affordable housing doesn’t consider the commuting aspect.

Patrick said there can be the opposite effect where people buy the houses and take them off the market. We have to be aware
of the market. The market can flip from one way to another. He also mentioned the vacancy factor. Parker said his firm will
do that. They will look at the relationship between ownership prices and rental prices and income. He said rentals track closer
with income because there is not much flexibility. Rentals may be going up a little bit faster, but sale prices are going up two
to three times as fast. We are still looking at a difference in those ratios that is substantial.

One of the audience members, John Ray, said that in his business what he is looking for are places for people to transition out
of mental health group homes. He now has access to Pinewood and Yaquina Breeze complexes. He noted that Yaquina
Breeze is even farther out than Little Creek. These folks have no income and no transportation, and we are putting them three
miles out thereby setting them up for failure. He thinks there should be a refocus on where zoning is being placed in the city.

Serkin said that there is room in Wilder for plenty of high-density housing, which should relieve some pressure on other rentals
in town. She said that something they wanted to do is have high-density owner-occupied housing, but there has been a lot of
resistance in this town. They thought this could be one solution to lower-cost housing. Parker said that the census calls these
“single-family attached”, and they tend to be cheaper than single-family detached. He said they will look at that.

Parker noted that if some of the committee members have detailed knowledge, EcoNorthwest will probably call and interview
them about their specific area of expertise.

Serkin mentioned that there is a new company in the Bay area that builds prefabricated structures that would work for high-
density residential.

Joanne Troy mentioned that the housing authority did a development in Yachats, and she doesn’t think that we can discount the
subjective desires of the population. There is no conventional multi-family housing in Yachats at all. The housing needs said
they could do a development of 40 units, but they only did 24. She thought a 40-unit complex would have the appearance of a
large apartment, and the people wouldn’t accept it. These units are full, but it wasn’t oversubscribed. They had to market it.
After they addressed the locals, at least 1/3 was retired people that moved here from the valley where living in apartments was
an acceptable housing form. She said there is a majority that doesn’t want that form of housing. She said that she has found
that people make strange choices based on subjective desires. Parker said that he has observed that. He said it is part of the
American culture and is seen more in rural areas. He said people have expectations of what they want, but their incomes don’t
always stack up against that. East agreed that attached housing has not been popular even if the pricing is attractive and the
units are nice.

Serkin mentioned some small homes that are made in California that look like food carts. She thought these would make good
owner-occupied units where they either own the land or buy into the land as common area. She said that she can picture these
tiny “hobbit” houses out in the woods and believes that they would be suitable for retirees. Parker said that he saw some of
these units in Gold Beach. He believes they are classified as park model RVs. He said they can look into those kinds of trends.
He said that when you look nationally, you can see all kinds of ideas. He added that it is simply a zoning issue if the city wants
to create a place where those or another alternative are allowed.

Tokos asked Lorna Davis what kind of concerns folks are bringing up in terms of frustration when they are searching for
housing. Davis said the Chamber has dealt with that specifically in the last couple of years. It can be a determination whether
a company has an employee coming to town or not. These people are having difficulty finding something just to rent until they
buy something. She said that rent is too high for that income bracket, and the alternative is renting something horrible.
Renting doesn’t fit family wages; and if buying, everything is priced right out of the market. Recently home prices haven’t
been as much, but now banks are not lending. She said there are a number of factors going against us in this current economy.
She knows that three teachers turned down jobs because they couldn’t find housing. Barbara Dougherty said that the hospital
has voiced that same concern. Davis said that affordable housing is a challenge. East reiterated that budget builders are
making headway. He said that Adair Homes do their own financing. They are partnering up and doing infill. He mentioned
an older development up north that was started years ago that went through bankruptcy and someone picked it up at a bargain.
Adair is now starting to put something on those lots. Four sold units are going in all at once in that one development; and they
are expecting to build two more houses there. East said Adair’s marketing technique might help in that area a little bit. Davis
said another challenge is the job market and the age demographic that it brings here. She sees it as the perfect demographic
that fits into Wilder. Davis said that it is not just about housing and jobs, it’s the livability when housing is not available.

Hardy asked about facilitating these ideas. Tokos said there are a number of tools, not just zoning, that gets involved in
housing. There are fees that can be adjusted such as SDCs and room tax. Infill can be promoted, and there can be incentive

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packages to encourage building. Tokos said we can make land available, but zoning policies have to be attractive to make
people want to come here. Davis said that we need to take a multi-faceted approach. We need a good basis for economic
development. We need a very active development program with someone trying to drive business and making this a place
where business wants to come. Things have to be developed over a course of years. It takes visioning. She said that we need
to get stronger on economic development. She noted that we used to have an economic development program specifically for
the city that has gone away, and that’s not a good circumstance for us. Hardy asked Davis if she didn’t think the college will
be a bigger contributor than NOAA. Davis said the college is struggling to keep enrollment up. Funding is an issue for them.
The nursing program is funded by other tuitions.

Dougherty said a big issue is lack of child care. Because of that, we are not drawing young couples who have the potential to
bring income into this community. Serkin said that there is one builder in Wilder that is in touch with a child development
center who is doing a demographics study to see if they can build a child care center here.

Tokos mentioned that we have urban renewal funds to improve infrastructure on SE Marine Science Drive and make it more
attractive to industries. There is not much industrial land. We don’t have large blocks of land. There have been businesses
looking for buildings and properties that we don’t have. Hardy thought that a map showing the city limits for South Beach
might be a good thing to include in this discussion. She said she was surprised to learn that the city limits included Wolf Tree.
Tokos explained that Wolf Tree is a chunk of property that has a destination resort designation that has languished over time.
We may need to look at what its role is in housing.

Parker said that the economic component comes up in every community. He said that when doing a housing study, it seems if
they could make suggestions around economic development the city might take a more active role in that, but it is not part of
housing. He said you have to be looking at all of these things together.

Patrick said that he is looking forward to getting a view of where properties are. A lot says multi-family and is actually single-
family with ocean views, which is likely not going to get changed. Parker questioned if that is the highest and best use of it;
unless they build a second home on it. He said the second home market hasn’t passed and continues to affect the market over
all. It seems apparent that it has affected housing costs in the past. People in Portland for instance may look at Newport as
being pretty affordable, which drives the overall market up. Parker said they will be looking at data and trying to get some
information around second homes. Having some local perspective would be helpful.

Tokos said the city is investing time and resources in doing this study and asked what types of information everyone would like
to see out of this. He asked what we can do at this time that will help in various endeavors. Patrick said he would like to see
the ratio of owner-occupied versus rental versus vacation rentals. He said it would be nice to know how much is actually
vacant. Parker said the study is for twenty years. We likely will go through two to three more business cycles in those years.
He said they could get that data, but he doesn’t know how current it will be. The information we would be most interested in
from the 2010 census won’t be available until next year. Housing will have moved on to something else.

Regarding redevelopment, Patrick said he would suggest looking at the story of Nye Beach. That is a case where changing the
rules in order to make it possible to do something made a big difference. Parker said that they do a lot of studies around
redevelopment, which is extremely challenging. The economics even in boom times are not conducive to have a lot of
redevelopment occur. The amount of land can be limited hoping that something happens, but it may or may not. Anything on
101 gets ODOT involved.

Davis wondered after we answer the question of what are the most pressing issues, where it goes from there. She asked if
solutions, potential solutions, or recommendations would be brought back. Tokos said that is what the city hopes to get to in
this process. Parker said we need to understand what the issues are. They can gather data. First the problem needs to be
defined. He said we are not going to address the issues. We need to be realistic about where we can get to. We are not going
to solve the problem. Even if the group, with EcoNorthwest’s assistance, can come up with a strategy to move forward, we
need to prioritize because the city and other interests likely are not going to have resources. The strategy needs to get focused
on what is the biggest issue, whether it’s affordable housing, renting, or the homeless? Parker said that part of what they would
like to deliver is an implementation plan over five years. Through crafting that, one realization they have come to is that
communities don’t know the extent of the problem. Raising awareness is a start. What are the correlation efforts to undertake?
What are the issues with Comprehensive Plan in implementing? One thing he has heard in conversation is that the city has no
true multi-family designation. There may not be that much demand for multi-family housing, but that may be because the land
is not in the right place.

Serkin noted that public transportation is something to draw in there. She said it seems really pretty good. Parker noted,
however, that public transportation is the last resort for many Americans at this point.

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Audience member, Ray, said that he would like to know the comparison of the vacancy rate in rentals and the vacancy rate in
owned property so we can see where the trends are. Is it that there is a list of twenty people waiting to get into units, or if units
are staying empty. If rentals are at capacity, maybe we need to focus on that area. If 15% of homes are sitting empty waiting
to be sold, are those in the wrong place. If it’s undesirable, maybe they shouldn’t be there. He thought that if we could get
some more of that information, it would help decisions.

Serkin asked if the community land trust could be brought into this. They may be part of the solution. Valeri Soiliki said that
there is a countywide housing needs study being conducted by COG out of Albany. Tokos said that the city just agreed to help
fund that and will be talking to land trust about how best to coordinate efforts. He noted that it is workforce housing only, but
it fits in the UGB, and it would be nice to have that added in and coordinate on. Parker said commuting patterns will look at
where they live and where they work. He said that Newport is an employment center. People are commuting from other
places, and some commute from here to others. It is informative to know the patterns. East asked if that will reflect why they
are commuting. Parker replied that no it only shows where they work and where they live.

Audience member, Dawn Pavitt, asked Parker how they get that information. Parker replied from the census. Pavitt asked if
they could do a correlation to that. She said that when she represents clients and takes them to the different areas for hearings,
they always get pressure, for instance in R-2 zones, to put single-family in it. She said a correlation would be helpful. Parker
said they will look at in what zone permits are issued and what housing type.

Dougherty said that she would like to see something on homelessness as well. She noted that most homeless youth are with

Patrick said that the Planning Commission is working through the zoning ordinance and left housing aside until after this study
gets done to give an idea of where to go with policies. Parker said that part of the work force is to dig into the code and
identify areas where barriers exist and make proposals. Tokos suggested working this through and get a set of
recommendations from this process. If those recommendations include changes to the zoning code, there will be follow-up
conversation with the Planning Commission and the general public.

Parker said there is a misconception about affordable housing. Troy agreed that no one wants to be designated low income.
She suggested trying to make a distinction in workforce housing. Serkin noted that those people at HMSC don’t even want to
think of themselves as workforce. Troy said it’s tagged with the same stereotype; the same net effect follows it.

Serkin mentioned prefabrication. She said that there are manufacturers in Oregon and Washington that make dandy houses
that once they are on a foundation, you wouldn’t know it was prefabricated. She wondered if there is anything we can facilitate
to get them here. Parker said that they will look into that. East noted that you could take a stick-built home and set up
something on the property to build it inside; but as soon as you put it on wheels and move it onto the property, it becomes a
manufactured or modular home even though they are built the same way as the stick-built, just at a different location.

Dougherty asked Troy if years ago the need was for as many one-bedroom units. Troy said there has been a big shift in
demographics over the last four years. Three to four bedrooms are declining. There are smaller family sizes. Those families
in one-bedroom units have less ability for income. The elderly and the disabled have less earning power. For those that
qualify for subsidized housing, the demand is one- and two-bedroom units. Whether this is true population-wide, she can’t
answer. Parker said they will dig into demographics. He said what they are seeing in a lot of communities is an increase in
single-person households, and there is an increase in single households all across the state. He said they will contact Troy to
get data about what her list looks like. Troy said that she is looking forward to this study to see our actual needs. She added
that what the state prioritizes is not true in our community. One thing about demographics that Parker mentioned, is that
forecasting migration and population increases gets more challenging when bringing it down to a community the size of
Newport. What will it look like in 2031? He said they can make an educated guess, but it likely will be wrong. That doesn’t
mean it can’t be a good tool, however.

Parker wondered if there were any issues more important than what has been listed, that we really should pay specific attention
to. Patrick thought the issue of vacation rentals is important. He mentioned the Hispanic population use of property
(consolidation of family members). Parker said they have looked at that in other communities. Hardy wondered if
EcoNorthwest identifies neighborhood density variations. Patrick said just keep that in mind in the vacancy factor. Parker said
that will be difficult to do. That presents a challenge. He said they will do their best to tease that out. They have used
assessment data.

Hardy asked if the committee will get to see their data. Parker said they will summarize their data. The data sets becomes the
property of the city. Tokos said they have talked about how to best convey the information to the TAC. The thought is that as
the consultant gets the information compiled to have an emailed summary of what the information is and provide more

5   Housing Needs & Buildable Land Study TAC Meeting 1/20/11.
background. Parker said that the committee will see the recommendation, but doesn’t need to review all the details in the
report. He said that EcoNorthwest is willing to share the details. They document pretty much everything.

Troy asked if they are looking at the quality of the housing and the subsidy housing stock, the density of substandard units that
might be a barrier to redevelopment, and effective ways to deal with substandard housing stock. Parker said they will do what
they can with existing data sets. Doing surveys of households is probably the best way to answer those questions.

Patrick noted that whether there is a boom or bust, there is a building cycle here.

Soilihi asked if when identifying redevelopment property, they look at land value versus improvement value. Parker said they
can and frequently do. That and inferior sites they will show on maps when they come back next time.

Tokos said this is a frame of reference to start from to look at the existing housing policy the city has.

Parker said one thing, if after reflecting on this meeting, the committee members have other thoughts, to send them to Tokos
and he will pass them on to EcoNorthwest. He said the agenda next time will be the buildable lands inventory. There will not
only be an assessment of what is vacant, but also what is constrained. We will look at redevelopment potential. He said that
the tools that are used to do that tend to be really crude in nature. Real estate is location dependent. That may not necessarily
be the case as we look at redevelopment. Parker said this meeting has been very helpful, and he looks forward to digging into
the data and coming back and beginning to present the information.

Adjournment. Tokos noted that the minutes will be distributed to everybody. Having no further business to discuss, the
meeting adjourned at 4:00 p.m.

Respectfully submitted,

Wanda Haney
Senior Administrative Assistant

6   Housing Needs & Buildable Land Study TAC Meeting 1/20/11.

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