Across the U.S., the demand for affordable housing has reached a fever pitch, and Medford planners have suggested carving out up to 50 acres that could be partially reserved for low-income units.

Under House Bill 4079, Medford is one of nine cities in Oregon eligible to apply for a pilot project that would allow setting aside land for affordable housing.

However, some Medford councilors expressed concern that embracing this pilot project could endanger an urban growth expansion that is in the works, prompting more scrutiny by the Oregon Department of Land Conservation and Development.

"I'm not completely convinced of the wisdom of this," Councilor Kim Wallan said at a recent City Council study session. "I almost feel damned if we do, damned if we don't.

During the process of setting aside land for proposed expansion, the city was criticized for taking in too much land and for not pushing for greater density requirements.

Wallen said she thought pursuing the affordable housing project could come back to haunt the city as it tries to get approval for its urban growth boundary expansion with the state.

Councilor Tim Jackle said, "At the very best, this is a distraction for our staff."

But Councilor Clay Bearnson said, "I think it's time to address our housing situation."

The council agreed to hear more about the issue at a later meeting, particularly addressing the concern that taking on the project may jeopardize the boundary expansion effort. By September, the council would have to file an application to get on the state's list, and then the city could follow up with a more complete application by next year.

Under the UGB expansion proposal, Medford could add 1,669 acres of buildable land, mostly in the northeast and southeast. Altogether the city has proposed bringing in 3,948 acres, but much of it is Prescott and Chrissy parks. In addition, some of the land is deemed open space or has properties with buildings on it.

Once the UGB is approved, the properties still would have to go through an additional process to be included in the city limits.

House Bill 4079 laid out the details of the pilot project, which will be awarded to two of the nine cities eligible to apply. Other qualifying cities include Albany, Bend, Corvallis, Eugene, Grants Pass, McMinnville, Redmond and Springfield.

According to the DLCD, the pilot project wouldn't need to go through the more complicated process required for a UGB change.

City planner Carla Paladino said that depending on the size of the acreage, it would have to have a minimum of 20 units and would be part of the land already included in the proposed boundary expansion. If the city attempts to bring in up to a 50-acre parcel for the pilot project, the state would require 30 percent of the land have affordable housing, while the remainder could have market-rate units.

The units would have to remain affordable housing for 50 years, and the density would be a minimum seven units per acre. The pilot project cannot be on high-value farmland.

Medford scores low on the 53-point criteria under the state proposal but could take steps to improve its score over the coming months by modifying its land-use regulations, Paladino said.

She showed the council about a half-dozen locations around the periphery of the city that might be suitable for the project, though owners or developers would have to be agreeable to the idea.

Paladino said the Planning Department will attempt to answer questions raised by the council, particularly the potential to undermine the existing UGB proposal. Preliminary discussions with state officials indicate the pilot project shouldn't conflict with the boundary expansion.

"Obviously, the council doesn't want us to confuse the two issues, and we will do a little more research," she said.

— Reach reporter Damian Mann at 541-776-4476 or dmann@mailtribune.com. Follow him on www.twitter.com/reporterdm.