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Recognizing a community need

Proposal for more housing in commercial, employment zones moves to public hearing
Ashland City Hall

Last week Ashland City Council progressed draft code amendments regarding residential standards for mixed use development — defined as the combination of housing and commercial or light industrial uses in the same site — in the city’s commercial and employment zones.

The city currently permits a maximum of 35% of a mixed use building’s ground floor to be used for housing, with some exceptions in the Transit Triangle and neighborhood commercial area of the North Mountain Neighborhood District, according to council documents.

Proposed changes would allow for 65% ground floor residential use in multistory, mixed use developments in C-1 and E-1 zones, with the goal of opening up more rental and small-unit housing, Community Development Director Bill Molnar said.

The Planning Commission recommended approval of the draft ordinance, which includes a proposal to remove the maximum density cap for buildings on commercial and employment lands, Molnar said.

“This has the effect of allowing for a greater number of units within the same three dimensional volume of the building,” Senior Planner Brandon Goldman said. “It’s also in keeping with some of the rulemaking that the state is proposing as part of the climate friendly areas.”

According to the state, Climate-Friendly and Equitable Communities rulemaking focuses on strengthening administrative rules surrounding transportation and housing planning in Oregon's eight urban areas with populations over 50,000, including both Medford and Ashland.

Goldman said the code amendments would apply to buildings with two stories or more on lots 10 acres or smaller, and not to buildings in the downtown core.

In discussion, councilors considered the 2021-2041 Housing Capacity Analysis, adopted by the council Aug. 17, 2021, which recommended policy changes to address housing needs. Core strategies included ensuring an adequate supply of available and serviced land, providing opportunities for housing development, and aligning housing planning with the Climate and Energy Action Plan.

“It’s trying to find a fine balance in terms of looking for new housing opportunities, but also wanting to create an environment that you can attract businesses,” Molnar said during the Jan. 4 council business meeting.

Overall, the project goal is to “provide more flexibility in the employment zones to respond to fluctuations and changes in the economy and demand for housing,” according to council documents.

Objectives include maintaining an inventory of employment land parcels to encourage business development, increasing “moderately priced” rental and for-purchase housing supply, and encouraging development in areas lacking interest from other projects and/or close to public transit and services.

An analysis by Fregonese Associates of buildable lands inventory, permits, and 10 years of employment data concluded sufficient lands exist for the city’s future employment needs.

“By making this change to your code, you’re not substantially hindering the amount of commercial and employment lands you will need in the future,” Scott Fregonese said.

Councilor Tonya Graham emphasized a need for family and median-income housing in the city, and questioned whether lifting max density requirements would attract the desired types of housing.

“I have this fear … that this would be taken advantage of and then we would find ourselves in a world of expensive condos that sit empty, as we frankly currently have,” Mayor Julie Akins said.

Goldman said the housing capacity analysis identified a need for one-, two-, and three-bedroom units, and an analysis of the Transit Triangle showed that the majority of Ashland households are one- and two-person.

Fregonese said the Transit Triangle analysis also placed one-bedrooms at the “sweet spot” in development modeling as far as cost per square foot. Forcing developers to build larger, more expensive units has been an “unintended consequence” of the density cap in action, he said.

Over the last decade, the city issued 50 commercial permits, including eight in the C-1 zone and 17 in the E-1 zone. The remaining permits were issued for public projects. The city’s inventory includes 175 acres in C-1 and 273 acres in E-1, of which 12.5 acres and 50.4 acres are buildable respectively, Fregonese said. Nearly 80% of buildable parcels are one-acre or smaller.

“The flexibility in allowing for less commercial space on the ground floor in some of these smaller lots really makes a lot of projects more feasible in terms of the return on investment from a developer perspective,” he said.

A 2007 economic opportunity analysis projected a land deficit based on 15,220 jobs expected by 2027. State data from 2019 showed an undershot of 10,237 jobs within Ashland’s urban growth boundary, and 20% of jobs are in residential zones, Fregonese said.

“Thirty percent employment growth would not require consumption of vacant land,” he said, citing the analysis. “Ashland can continue to grow its employment base without using vacant land, whether it’s through redevelopment or through creative, adaptive reuse and putting more jobs in a specific location.”

Goldman said if an updated economic opportunity analysis showed a surplus of E-1 and C-1 lands, allowing for more residential use allocations, the city could consider the rationale for ordinance amendments such as increasing ground floor residential area to 100%, affordability for median-income households through deed restriction, and rental versus ownership requirements.

City Manager Joe Lessard said updating the economic opportunity analysis is “overdue,” and staff will compile information for a council work session on this next “important step” in the project.

Akins said employers often cite limited housing inventory as an impediment to establishing business in Ashland, where employees may not find housing they can afford.

“It is hard to bring employers to a place where your employees can’t afford to live,” Fregonese said.

Another consideration, he said, is the city’s large population of seniors and “empty nesters,” many of whom occupy three- and four-bedroom units that could be used for family housing. Part of the project is an attempt to broaden options for people currently using housing stock “they might not actually need,” Fregonese said.

Councilor Stephen Jensen made a motion to direct staff to move forward with code amendments and schedule a public hearing for first reading at the Feb. 1 City Council meeting. The motion passed 5-1, with Graham voting no.

“There are tweaks that could be made, but the core work is good — the core work has been requested across the board by developers and citizens,” Jensen said.

Councilor Stefani Seffinger said recognizing a need for affordable housing and rising construction costs, the project should also consider the value of universal housing design and needs based on home entrepreneurship and work trends.

Graham said the proposed structure did not include provisions to prevent or discourage construction of the “unlived in condo,” and did not align with what the council identified as the community’s most needed housing.

“I am wholly uninterested in facilitating the development of the type of housing that we don’t want in this community,” Graham said. “What I see is that we are handing something away, but we are not making sure that we’re getting adequate value for what we’re handing away.”