Following the rules is usually the safest way to get something done. But what happens when following the rules is designed to lead to a bad result? Do you keep marching forward knowing that the outcome is going to be bad, or do you slow down, take a longer approach with more work, and obtain a better result?

That’s the dilemma facing the City of Sisters as it navigates the traditional urban growth boundary (UGB) expansion process  –  a process the city must complete if it hopes to relieve its crushing housing crisis.

In this post, I am going to explain what’s happening in Sisters, but you should know that this isn’t a unique situation. Versions of this same mess have played out across Oregon for years. That’s why cities keep coming back to the Legislature, year after year, begging for land swaps and other one‑off “fixes” to address a broken land use process that no one seems to want to fix.

In the meantime, land‑preservation groups and the Oregon Department of Land Conservation and Development keep showing up with misleading data and the same script: nothing to see here, everything’s working perfectly, don’t look behind the curtain!

Here’s the reality: the traditional UGB process isn’t built to create more housing or job growth. It’s built almost entirely to protect farm and forestland. Cities are pushed to expand onto the worst possible land for urban expansion just to avoid touching resource land. If they don’t, they face lawsuits from land preservation organizations and nimby groups.

And the results are exactly what you’d expect: sky‑high land prices, awkward parcels with no infrastructure where no one can build, and huge swaths of land pulled into city limits that will sit empty for decades.

Let’s zoom in to Sisters for the most recent example of how this is playing out.  

The City of Sisters Housing Crisis

Sisters is a quaint western town sandwiched between Redmond and Bend. It sits beneath the snowcapped Three Sisters volcanoes, and its three major events are the Sisters Rodeo, the Sisters Folk Festival, and the Sisters Outdoor Quilt Show.

On the surface, Sisters looks like a storybook town. But beneath its postcard exterior, a very real crisis is unfolding: a severe housing shortage that has pushed many long‑time residents into homelessness and is preventing the next generation from putting down roots.

Sisters is growing at a pace that has outstripped its own expectations. According to its City Manager, the City is one of the fastest‑growing communities in Central Oregon. I believe it. To meet demand, the City’s own analysis shows it needs to build over 1970 new housing units by 2043.

Like everywhere else, when you double the people, but not the housing, the outcome is predictable: home prices climb fast. Today, the median home sales price in Sisters now runs about $800,000, a number that has nothing to do with what most people here actually earn.

The outcome isn’t exactly a mystery. Long‑time residents are getting pushed out, younger workers don’t stand a chance, and even though the city has approved new building permits, the supply isn’t catching up. You can see the fallout without looking very hard. More than 120 people – including families whose children who attend the Sisters School District and folks who work full-time jobs in town – live unhoused in the Deschutes National Forest outside city limits.

The town’s tidy Western postcard now has a second frame: people living in cars, RVs, and improvised camps tucked into the edges of the forest. Teachers, firefighters, and local small business owners can’t even afford to live in the town they work in.

The Response: More Land Is Needed to Build More Housing

Sisters’ leadership knows the housing situation isn’t going to fix itself, so they’ve started the slow march toward expanding the city’s Urban Growth Boundary (UGB) – the invisible line that dictates where houses, schools, and businesses are allowed to exist.

Oregon requires every city to have a UGB, and anything “urban” has to fit inside it. Outside the line are properties zoned for farming or forestry, plus a handful of rural residential areas scattered with rural homes, private wells, and septic.

In theory, cities are supposed to keep enough land inside the boundary to cover 20 years of growth. When they run out, they’re required to expand it. It’s not an option. The City of Sisters is now doing exactly that, planning to bring in roughly 250 acres.

Under the best circumstances, UGB expansions are contentious. There are always – and I mean always – people who resist any new development near them. In Central Oregon, they’re usually the people who moved there from outside of the area who think that they should be the last new resident in the region. 

Some residents raise concerns about traffic or school capacity; others lean on coded language about “protecting our town’s unique character.” More recently, some opponents have shifted to environmental arguments, citing groundwater depletion or impacts from climate change that apparently didn’t exist when they built their home.

Different words, same message: they don’t want change, they don’t want new neighbors, and they don’t want their daily routines disrupted.

Once you get past the usual “no-growth” torch and pitchforks crowd, you then get to the more complex issue: not whether the city should grow, but where it should.

The Wrench: Oregon Land Use Law

One would assume that Oregon’s “esteemed” and “nationally regarded” land‑use system would let a city grow in a way that actually addresses its biggest challenge – more housing. But if that’s what you expect, you’d be wrong!

Instead, state law forces cities through a rigid, step‑by‑step process designed first and foremost to protect farm and forestland from development. This is what is known as the “priority statute” (see ORS 197A.355 for Metro and ORS 197A.285 for cities outside of Metro).

Here’s the priority statute simplified:

1. Land Designated as “Urban Reserve” — must be used first, if it exists. This should be the land that is best for housing, but unfortunately fewer than a dozen cities in Oregon have ever gone through the Urban Reserve process and DLCD rules have made the process less than effective (more on that later).

2. Exception land — usually scattered rural residential pockets.

3. Resource Land — only after #1 and #2 are exhausted can a city even look at “farm” or “forest” land.

The practical outcome is that the rules force cities to expand into the most awkward, least efficient land first – the rural residential parcels already chopped into five‑acre lots with million‑dollar homes, barns, wells, and septic systems. 

None of that is cheap to deal with if you are trying to build affordable housing, where every dollar matters.

Building affordable housing on developed rural residential land often doesn’t pencil. To do it, a builder must assemble multiple expensive and developed parcels from unwilling owners, decommission old wells and septics, and navigate costly bureaucratic hurdles – driving prices sky-high before a single shovel hits the dirt.

The ultimate irony? The large, flat, undeveloped tracts of land that actually make financial sense for affordable neighborhoods are the last places allowed to be developed because they are zoned for farming.

The Perfect Opportunity

There’s no better example of how broken the priority statute is than what is happening in Sisters right now.

The City is being forced to bring into its UGB some of the most complicated, expensive land first – pockets of rural residential subdivisions with landowners who don’t have interest in their land being developed into dense affordable housing. (See pages 6-15 of the link).

Meanwhile, prime parcels that could immediately deliver guaranteed, shovel-ready affordable housing are kept off the table.

Just outside Sisters’ UGB sits a perfect 59‑acre property whose owners want to dedicate it for the kind of housing the town needs – homes for teachers, lower‑income families, and adults living with disabilities. This land is called “Mckenzie Meadows Village”.

The owners, Bill Willits, Curt Kallberg, and Reed family, aren’t new to this. They helped deliver the first phase of the project next door, partnering with Hayden Homes to build hundreds of units for people earning around the area median income. Hayden’s nonprofit, First Story, added 9 deed‑restricted homes for lower‑income buyers.

The land is in the perfect location for a new neighborhood. It is contiguous to existing city limits, is within easy walking distance to the local public schools, minutes from the major grocery store and medical center, and has immediate access to city water, sewer, and other services.

The owners have pledged to keep environmental stewardship at the forefront. They have willingly and voluntarily agreed to conservation easements within the property; a 100ft wildlife corridor on northernmost property line adjacent to State Forest and a 100ft riparian conservation area on either side of ephemeral creek whose path runs through the property, but that only appears once every 10 years or so.

Even better? Bill, Curt, and the Reed Family want to dedicate their land for affordable and accessible housing. They have partnered with credible non-profit homebuilders like Sisters Habitat for Humanity and Bridge Meadows who are eager to break ground on deed-restricted units and intergenerational housing.

Even more inspiring, the property owners have dedicated a portion of the land to S.O.U.L. (Sisters Opportunities for Unified Living) – a non-profit led by mothers of adults with developmental disabilities. Their dream is to create a community where people of all abilities are welcome, supported, and empowered to live independently.

Right now, Sisters-born adults with developmental disabilities have to leave town (as far away as the other side of the Cascades) to find supportive independent housing. For the S.O.U.L. moms, the Willitts, Kalberg, and Reed families would create a remarkable neighborhood where their children have a safe and dignified place in Sisters to live on their own.

Despite being a perfect opportunity to make a real dent in Sister’s housing crisis, the property owners aren’t allowed to build the neighborhood they dream of.   

The Rezone

Like a lot of land in Central Oregon, the Mckenzie Meadows property is outside of the UGB and zoned “forest,” despite having poor soils and no history of productive timber harvest.

Oregon’s rural planning laws don’t allow the property owners to build the needed housing unless the property comes into the UGB. However, under Oregon’s priority statute, because it’s zoned “forest”, it’s the last land the City of Sisters is allowed to consider.

To try and work within the system and move Mckenzie Meadows up the priority list, the property owners began the process of rezoning their land. This move made sense anyways, since the land has low quality soil and no history of productive timber harvest.

It’s important to remember that just because land is zoned “farm” or “forest” doesn’t mean it’s actually suitable for commercial farming or timber. That’s exactly why Oregon law allows property owners to seek a “rezone” when the zoning label doesn’t match reality.

Some land‑preservation groups have tried to turn this into something negative, labeling it “spot zoning.” But there’s nothing nefarious about it. Rezoning is the legitimate, legal tool for fixing an outdated or inaccurate designation, so land can be used in a way that actually makes sense for the community.

Rezones have become contentious – this one was no exception – but in a surprising turn of events, the City of Sisters City Council sent a letter to Deschutes County asking them to expedite the review of the rezone. This was the “throw the rulebook out the window” momentum we were all hoping for!

Even more surprising, the Deschutes County Commissioners unanimously approved the rezone on an expedited timeline so the city could factor it into its UGB planning! For a moment, it looked like the project might actually be on the table…

The Lawsuits

Remember when I told you earlier about the land preservation organizations that sue cities when they don’t follow the rule book exactly? Meet Central Oregon LandWatch.

The land use “watch dog” group sued Deschutes County to block the rezone of Bill and Curt’s property. Now the application is tied up in court.

Depending on how many rounds of appeals follow, it could sit there for years, leaving 59 acres of potential affordable housing on hold while the town continues to run out of places for people to live.

Here is a statement from LandWatch about their lawsuit:

LandWatch has filed an appeal with LUBA challenging Deschutes County’s approval of the McKenzie Meadows rezone. Allowing this property to be rezoned would undercut Oregon’s land use system by making it more difficult to stop urban sprawl and protect farm and forest land next to urban growth boundaries.

The pending lawsuit caused the Department of Land Conservation and Development to mail the City of Sisters a letter cautioning the inclusion of Mckenzie Meadows if it was tied up in court. Weighing the risks, the City decided to follow the rulebook and press on without Mckenzie Meadows. 

Fearing for the future of their beloved town, Bill, Curt, and the Reed Family made their countermove. They filed their own lawsuit challenging the City’s UGB decision since MMV wasn’t considered. 

Now, the future of McKenzie Meadows, the S.O.U.L. Moms’ dreams, and wellbeing of Sisters teachers and families – all rest in the hands of the court system.

Sure sounds like a well-oiled machine to me.

Nothing to see here, everything’s working perfectly, don’t look behind the curtain!

The Mission: Fix Our Broken System; Give Cities & Landowners A Real Chance To Solve Our Housing Crisis

What’s happening in Sisters isn’t an isolated story. It’s the same pattern that’s played out across Oregon for decades. A town grows. Housing doesn’t. Prices climb. The people who make the community function – teachers, service workers, caregivers – get pushed out.

A promising project appears. Lawsuits are filed. The process grinds to a halt.

McMinnville has lived this. Bend, Corvallis, Hillsboro, Woodburn – the list is long. Different towns, same outcome. A system built to stop sprawl ends up stopping housing instead. And the people who need it most are the ones who pay the price.

Unless something changes, this cycle will keep repeating itself. Town by town. Project by project. Lawsuit by lawsuit. Until there’s no one left who can afford to live in the places they serve.

Sisters isn’t the exception. It’s the rule. And whether Oregon chooses to cross the line or keep drawing new ones will decide what kind of state we become in the years ahead.

The Solution: Restore the Intent of Urban Reserve Planning

Last year, OPOA pushed for a simple, practical fix: the SB 1522 -1 amendment. It would have finally cut through the red tape that has made Oregon’s Urban Reserve system nearly unusable for cities.

Remember: Urban Reserves are the first land that comes into the UGB when a city expands.

When the Legislature created the process in 2007, the idea was simple: a city could go through a local process to designate land that makes the most sense for urban development, so that the community knew long in advance that those areas are where the UGB would expand.

The Legislature created six criteria for a city to look at when it was designating Urban Reserves – infrastructure, economics, public services, walkability, ecological health, and housing variety. Not one of those criteria required treating farm and forest zoning as untouchable.

The whole point was to give cities the flexibility to plan future neighborhoods based on real‑world conditions that make the most sense for urban development.

But that vision didn’t survive rulemaking. Land‑preservation groups pushed DLCD to graft a priority scheme onto the urban‑reserve rules – nearly the same hierarchy that already restricts UGB expansions – to preserve farm and forest land. The result is that cities still can’t place urban reserves on the land that is best for housing.

The -1 amendment would have restored the Legislature’s original intent. Instead of forcing cities through DLCD’s rigid, duplicative rules, it would have let them use the six common‑sense criteria the Legislature already endorsed:

1. Efficient infrastructure — Can the land be served without wasting public dollars
2. Economic capacity — Does it support a healthy local economy
3. Public facilities & services — Can schools and essential services reach it efficiently
4. Transportation & walkability — Can it be built as a connected, walkable neighborhood
5. Ecological enhancement — Can development protect and improve natural systems
6. Housing variety — Does it allow a full range of needed housing types

In short, the amendment would have restored the original will of the Legislature.

If it had passed, cities could finally designate urban reserves based on what works for the people who live in them. And when it came time to expand a UGB, those areas would be first in line for housing.

But the -1 amendment died. Land‑preservation groups labeled it a “five‑alarm fire drill” and treated it as if we were repealing Senate Bill 100. Their position is that farm and forest land preservation should always be the No. 1 priority of any land use planning decision, not housing or job creation. Even in a housing crisis and economic doom-loop.

OPOA will keep pushing this reform. We’re not walking away from it, and eventually it will pass. The real question is how many communities like Sisters will be forced to struggle under a broken system before that happens?

The opinions expressed in this post are those of the author and do not represent the opinions or positions of any party represented by the OPOA Legal Center on any particular matter.