Two men, working 20 miles apart, are vying to shape the future of suburban Oregon. One wants to develop a compact, European-style village on the outskirts of Wilsonville. The other wants to build rural dream homes on a sprawling tract of farmland at the edge of McMinnville. With Oregon's land-use landscape being torn up in the wake of Measure 37 — passed by voters last November — it's anybody's guess whose vision will win in the end.

Rudy Kadlub sits in the abandoned state hospital where he makes his office, a few miles from downtown Wilsonville. He casually sips fresh coffee on a brisk winter morning, surrounded by a virtual village. The walls are a collage of brightly colored maps and sketches, the blueprints for transforming 500 acres of empty buildings and fields — the old Dammasch Hospital grounds — into a dense European-style development.

Villebois, French for "village near the woods," will hold 7,000 residents clustered around a village green, sidewalk cafés, row homes, back alleys and a soaring clock tower. And the development will include at least 2,700 new homes, meeting Wilsonville's guidelines of 10 dwellings per buildable acre, a standard that will make it one of the densest suburbs in the West.

The final Villebois map came together through a yearlong, $5 million planning process involving citizens, business and political leaders in Wilsonville, as well as state officials, who sold the property to Kadlub's Costa Pacific Communities. But even though some of the details of his plan have changed, Kadlub's development remains true to his deep convictions about how homes and communities should be built. "Forty or 50 years after we started developing the West, we realized the model isn't working," says Kadlub, 55, who coached football and was halfway toward a doctorate in psychological kinesiology before turning to home building. "You run out of land. The model we're now using is not a new model — it's been proven worldwide. The Europeans have been doing it for centuries. Living in compact spaces is not only socially acceptable, it sustains communities."

Villebois isn't Kadlub's first shot at changing the rules of suburban development in the West. He put together the award-winning River Run community in Boise and then planned Orenco Station, another dense settlement that's built around a MAX light-rail stop in Hillsboro. Kadlub found inspiration for Orenco by touring older communities in the United States — Georgetown in Washington, D.C., New York's Greenwich Village, Ladd's Addition on Portland's Eastside.

Before sketching out Villebois, Kadlub moved Costa Pacific's offices into the red brick blocks of the old mental hospital — Spartan environs that were recently the territory of vagrants and SWAT teams in training. Kadlub wanted to be able to walk the property's subtle grades and look out the window onto vistas that residents would one-day see. His team eventually crafted the roads and walkways along natural topographical lines. They saved the highest point on the property, with the most commanding views, for the community square.

They were trying to show that their hip new village would not be imposed on the landscape.

"The old architects used to pitch tents at their building sites to really feel the place," Kadlub says.

JOHN ABRAMS HAS SPENT most of his life on 342 acres of rich agricultural land on the western edge of McMinnville. A tall man of 47 with a shock of black hair and a preference for dungarees, Abrams raises beef cattle and also works as a land surveyor. He now oversees the family's land, which was assembled in pieces by his mother and grandparents, beginning in the 1930s.

The Abramses are sitting on the last large parcel of flat land between McMinnville and the foothills of the Coast Range. That makes the tract ideal for farming. Or, new home construction.

The family lives in two houses on the property, which is zoned exclusively for farm use (it's currently rented to a grass seed farmer). But they'd eventually like to develop the property with high-end homes.

John Abrams' mother, Mara- lynn, earned the right to develop the land when she added to it several decades ago, Abrams says. The parcel is expected be the first Measure 37 exemption from land-use laws processed in Yamhill County, and the first large parcel to be processed statewide.

According to Measure 37, which passed with 61% of the vote, landowners can get exemptions from land-use laws that were imposed after they purchased their land, or they can seek compensation for lost development opportunities if land-use rules are kept in place.

Yamhill County commissioners have already said they won't compensate landowners who file Measure 37 claims.

Abrams understands that he's defying what the state and county want for his land, whether it's kept in farm use or added to McMinnville's urban growth boundary in the future.

"We have a more upscale view of this parcel than the state," he says. "They keep pushing the whole density issue. It's a nice thing, these mixed-use commercial centers. But I think it's another one of their utopian ideas that will end up failing. These planned neighborhoods — it's guys sitting around with their philosophical ideas. But as far as the rubber meeting the road, I don't think that's what people want."

SINCE MEASURE 37 PASSED, landowners in Yamhill County have submitted claims on 4,000 rural and suburban acres. The Yamhill claims are part of a growing statewide list of landowners filing to build homes on previously restricted land. In Hood River County, an orchard-owning family is applying to put homes on 260 acres. In Central Oregon, a series of claims would allow more rural ranchettes. Along the coast, a 62-house subdivision is being proposed near Seal Rock. And in Northeast Oregon, outside Joseph, one rural family would like to build on 68 acres that border scenic Wallowa Lake.

Legal wrangling in the courts, the Legislature, county and municipal governments will determine whether many of these developments ever get built. A crucial question will be whether current landowners who win Measure 37 exemptions can pass them on to developers. (See sidebar, DEVELOPMENT RIGHTS.)

But some suburban subdivisions will clearly get built. And when they do, they're sure to muddy the vision for Oregon that Kadlub and other land-use planning proponents have — of a landscape dotted with compact, service-rich urban centers surrounded by farms and forestland.

Suburban and semirural areas such as Wilsonville and McMinnville are a key place to watch, situated as they are near metro Portland. Absent strict land-use laws that require urban growth boundaries and environmental set-asides, development pressures would long since have blanketed these areas with houses. Just look at Clark County, Wash., or suburban Sacramento.

Will a new suburban aesthetic emerge, with the subdivisions, McMansions and big rural ranchettes that have so far been kept mostly at bay in Oregon?

It's a good bet. Post-Measure 37 Oregon will be a brave new market for suburban real estate dollars, featuring a competition between new-fangled village living at one end of the spectrum and single-family living at the other. Levitown-like subdivisions of modest cookie-cutter homes on quarter-acre lots may be in the offing. But because there's such high demand for "acreage lots" in rural settings — parcels ranging from one to five acres — the first round of developments is likely to cater to those richer real estate tastes.

Yamhill County developer Curt Walker is keeping a close eye on the first Measure 37 applications in the Willamette Valley to see if they free up enough land to build those low-density, high-end developments. He thinks big rural parcels — similar to the Abrams plot — hold some promise. "Measure 37 may make a difference — and it'll have more effect on the acreage lots," Walker says.

IN WILSONVILLE, CITY PLANNERS are logging long hours processing building permits for construction firm Arbor Homes to get Villebois off and running. (Arbor will be one of several builders.) The city has been a close partner in the development: It will invest $60 million to $70 million to connect the new community's parks, trails, roads and utility lines to the city network.

Philosophically, city officials liked what Villebois looked like and represented. It's the kind of development that planners study in grad school and that is being implemented from Damascus in Clackamas County to Fairview in Salem to the Hudspeth Ranch in Prineville.

"Most planners in the U.S. would love to be involved in this project," says Blaise Edmonds, the Wilsonville planner who's overseen Villebois. "Nobody knows what the Measure 37 subdivisions are going to look like. But I don't know if those projects are going to offer what Villebois will. What quality control are they going to have?"

Although the details are still sketchy on the Abramses' plan for their 342 acres in McMinnville, one thing's for certain: It won't look anything like Villebois.

In filing for a Measure 37 exemption, the Abramses aren't required to submit a subdivision map or give much indication of what they'd like to do. Under an ongoing McMinnville expansion plan, they've proposed adding a couple of houses and a church on 29 acres. That's far below the seven units per acre that the state would like. On the rest of the property, the family wants to put well-built homes on lots of at least a quarter-acre, perhaps even bigger.

"The high end stuff seems to be what people want," John Abrams says.

One key attribute of Measure 37 legislation will affect the way the Abramses and others can build: The law does not require local governments to extend sewer and water lines to developments that obtain Measure 37 exemptions. That will constrain many of these developments to low-density, large-lot homebuilding, because residents will have to rely on wells and septic systems.

"Even if landowners get the right to subdivide, it will have to be rural development," says Ethan Seltzer, director of the school of planning and urban studies at Portland State University. "You're going to get that sprawling development that we have tried to forestall as a state and region."

LOW-DENSITY DEVELOPMENT MAY CHEW UP open space, but it does produce the kinds of homes people want, according to Curt Walker of Pacific Empire Developers in Newberg.

Walker says people are clawing to get out onto bigger rural lots. "There just isn't anything available," he says. And that has driven prices up on what is still on the market. "Good grief, today when you get into one- and five-acre lots, it's $200,000 and up just for the land. And you still have to put in the water and sewer."

Real estate broker Sue Vanderburg, who works in ReMax's Tualatin office, says residents of Portland's close-in suburbs are pushing the hardest to get into rural places such as Yamhill County.

"It's people in Lake Oswego or West Linn," she says. "They want to build a house out there, so a lot on a farm is a hot item. The buyers can get the tax exemptions for keeping it in farmland, and if there's an old house people will tear it down and build a newer, bigger one."

Villebois master planner Rudy Kadlub believes that the trend in the long run will be toward village living — Measure 37 notwithstanding. Baby boomers want to downsize their homes and live in close-knit, walkable communities, not McMansions, he says. And high-density developments allow first-time home buyers and the growing number of single heads-of-households an opportunity to get into condos and town houses in a community with a lot of public amenities.

"The demographics are in our favor," Kadlub says, adding that Villebois' sales office has about 750 interested people on its mailing list, even though the only thing Arbor Homes has built on the site so far is a few model houses.

Sue Vanderburg, who lives in Wilsonville, says Villebois may be a viable alternative for people such as herself, who live in traditional suburbs and want to downsize. But whether these developments can draw in families with lower incomes will depend solely on how competitive they are with existing home prices.

"I think Villebois will be a mix and will include some young professionals, but it will depend on price," she says. "These younger families can't afford $300,000 and $400,000 homes." (Arbor has not finalized its home prices for Villebois.) Of course, lower- density rural developments made possible by Measure 37 may also be unaffordable for younger, cash-strapped families.

"I'll be curious to see whether these developments result in low-cost or very high-cost homes," says PSU's Seltzer. "In either case it will affect the overall market. There are only so many buyers here."

So, will sprawling developments at the rural/suburban edge change the tastes of Oregon home buyers and evaporate demand for Villebois-type developments of the future? That's one possibility, says Seltzer. Another is that the public watches the first round of Measure 37 developments — such as the Abrams family farm in Yamhill County — and decides that preventing another round is worth the cost of compensating property owners not to build more in the future.

And that's something the crafters of Measure 37 have always said they're open to. The Abrams family's potential development, for instance, was valued at between $6 million and $20 million.

"Ultimately, the question for Oregon is: Are the underlying values of land-use planning, including open space, still supported?" Seltzer says. "If we care about them, what are we willing to do to keep the beauty of the state?"

[SIDEBAR]
DEVELOPMENT RIGHTS — TRANSFERRABLE OR NOT?
According to the Oregon attorney general's office, once a landowner with a Measure 37 exemption sells his or her property, the ability to develop the property under the exemption evaporates.

That's not an interpretation favorable to developers. "It seems unreasonable that you couldn't transfer the rights to someone else," says Curt Walker, at Pacific Empire Developers in Newberg.

David Petersen, an attorney at Tonkon Torp in Portland, says the transfer of development rights is the "single biggest issue" surrounding Measure 37. One possible way around the state's interpretation involves the original owner holding onto the land title until the developer completes the housing development. But that introduces a new problem: As soon as title passes along to the new homeowner, the home becomes a nonconforming use, restricting further improvements such as add-ons.

Walker says expected challenges in the courts will be the only way to resolve the issue. "We feel like it might take some ugliness to determine what can and can't be done," he says.

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Copyright 2005 Oregon Business magazine