Bill Willitts stops his Dodge truck at a quiet neighborhood intersection west of downtown Sisters and gets out. He points out two different types of homes: some have garages in the back, and some have garages in the front, which is more space efficient. Rows of two-story tract houses are separated by wide black asphalt streets flanked by gravel drainage ditches. Then he points to the tall Ponderosas sprinkled throughout the neighborhood — including one anchored in the shoulder of the street, protruding into the asphalt.
“I look down this street, I’m proud of it,” said Willitts, a longtime Sisters developer. A black baseball cap and sunglasses shaded his face. “It’s got a nice feel to it.”
Nearby, a street sign reads “Willitts St.” He was one of the partners on a team who developed hundreds of homes here, a neighborhood called McKenzie Meadows. Two decades ago, the last time Sisters expanded its urban growth boundary — or UGB, a development border that is Oregon’s marquee land-use planning tool — this land was included. Today, the boundary severs the rows of homes from another 58 acres of Ponderosa forest owned by Willitts and company. He thought it would be a shoo-in for future expansions of the city.
But this time around, they’re on the outside looking in.
And they’re fighting hard to change that.
The future growth of Sisters, a small city of about 3,700 people whose population is expected to double in the next 20 years, is hanging on a knife’s edge. A recent hiccup related to planning for development around wetlands and streams has put more pressure on the City, which is faced with a looming deadline to turn the page on one of the most complicated and crucial planning processes local governments in Oregon face. The fight is a flashpoint for broader pressures across Central Oregon to flex decades-old development boundary rules as the region faces some of the highest housing costs in the state.
“I wish it was moving a little faster,” Sisters Mayor Jennifer Letz told the Source. “Every day we don’t have a UGB amendment is a day we’re not working towards more housing and more affordable housing.
“Part of that is the nature of the beast,” Letz added.
A “gift” for Sisters
For Oregon cities, expanding an urban growth boundary takes years — sometimes even decades. Bend’s last expansion, finalized in 2016, took 12 years.
Expansion projects first require stacks of studies and analysis, months or years of redrawing the boundary and are then subject to layers of appeals before state regulators finally sign off.
The Sisters expansion draws on planning work going back to 2019. Now, the City faces a critical deadline of getting Deschutes County to approve the expansion by the end of the year or risk having to go back and redo much of its initial planning work.
City staff and a mayor-appointed steering committee took a year and a half to hash out a proposed expansion area. The preferred concept is to add about 300 acres east and northeast of downtown Sisters. City officials are confident that is enough land to build more than 1,100 new homes, plus schools, parks, commercial and industrial areas.
“I’ve never seen this happen in any jurisdiction in Central Oregon. I think that this is a gift that the City of Sisters should take the time to see through.”
Mayor Letz was part of a majority on the Sisters City Council that finalized the proposal late last year with a 3-2 vote. Much of the debate has revolved around whether or not to include the McKenzie Meadows property on the west side of town.
Its owners, who bought the land about 30 years ago, are storied figures in the Sisters community. After Hallmark bought his gift design company, Willitts moved to Sisters and got into real estate. His family developed the Five Pine Lodge, a hotel and spa that recently topped national lists. His partners are Curt Kallberg, a developer and longtime officer with the Sisters Rodeo, and the family of the late Bill Reed, who pioneered the western aesthetic of Sisters’ downtown commercial core. They’re also working with regional homebuilding giant Hayden Homes, which built the first phase of McKenzie Meadows, and affordable housing developer Habitat for Humanity.
Owners say the site is ready to be brought into the City to deliver hundreds of new homes, with the promise that 30% of them will be restricted to lower incomes. Willitts estimates there is room for 400 to 450 new homes.
“I cannot overstate what a gift this is,” Morgan Greenwood, a Sisters resident who has worked as a lobbyist for development and real estate groups, told the Deschutes County Planning Commission on May 28. “These are homeownership opportunities as opposed to rentals. This does not happen, ever. I’ve never seen this happen in any jurisdiction in Central Oregon. I think that this is a gift that the City of Sisters should take the time to see through.”
A July real estate report shows the median home prices in Sisters is $685,000, the second-highest of any Central Oregon city behind Bend. The Sisters housing report used in the urban growth boundary expansion found nearly 40% of renters were “rent burdened.” Officials with Sisters School District have testified that prospective staff turned down jobs because housing was too expensive.
A 1,200-square-foot house built by Hayden Homes in the first part of the McKenzie Meadows neighborhood was the only option that Hannah Sutton, an emergency medical professional, could afford.
“Honestly, I’d prefer them to just build a bunch more of these houses here,” Sutton said from her porch, despite making it clear she was no fan of the corporate home building company. “That’s what the community needs. That’s what the teachers need. This house across the street is $550,000.”
Gov. Tina Kotek stopped by the McKenzie Meadows property in October during tour through Central Oregon touting her housing agenda.
In recent years, Kotek and the Oregon legislature have created carveouts allowing cities to fast-track land into their urban growth boundary outside of the normal process, in the name of easing the housing crisis.
“Governor Kotek did learn about the Mckenzie Meadows Village site as part of her Central Oregon housing tour and, yes, she supports the UGB expansion to get that housing built,” Luke Harkings, a spokesperson for Gov. Kotek, told the Source via email.
Farm and forest protections
McKenzie Meadows is zoned forest — a designation designed to steer away development.
Oregon’s land use planning system, created by Gov. Tom McCall and the legislature in the 1970s, was meant to ensure growth is compacted in cities while rural resource lands like farms and forests are protected. Cities are required to prioritize expansions on land where zoning designations already allow rural residential housing. There were already more than enough lands east of downtown Sisters zoned for residential use. Much of it turned rural residential when Brooks Resources, the real estate subsidiary that emerged from Central Oregon’s logging boom, sold the lots in the 1970s. Now, the company has pieced together agreements with some of the landowners for a large master-planned development that will include 30% affordable housing, according to CEO Kirk Schueler.
McKenzie Meadows owners got Deschutes County’s approval to rezone the land just as Sisters was set to move forward with the proposed east side expansion. But when an appeal from environmental watchdog group Central Oregon LandWatch held up the zone change, Sisters decided to move ahead without McKenzie Meadows.
“There wasn’t really any shortage of land for use to consider from the beginning,” Letz said. “I think there’s still that sense of let’s just keep this process moving, and let’s get to a place where we can have UGB amendments and start building houses.”
Sisters city officials are confident the expansion lands can deliver the housing the City needs. McKenzie Meadows supporters argue much of it will likely stay undeveloped for far too long, given issues with topography, infrastructure, neighborhood covenants and the opposition of some landowners who say they don’t want to be inside the urban growth boundary.
“This land is paper land that’s never going to turn into dirt,” Willitts told the planning commission July 9.
Who has the best lands?
A half-mile east of Sisters City Hall, the small town streets break into views of rock outcroppings, sagebrush, juniper, ponderosa and sparse mailboxes heading long gravel driveways.
As he tends to the Sisters urban growth boundary process, Ben Walsh has been spending more time on the property where he grew up east of town, where his elderly mother lives. From a back porch overlooking a wide grassy meadow flanked by a rocky ridge, he recalled a childhood playing on the landscape.
“Waking up in the morning and seeing the meadow offer up its dawn ground fog, that goes a long way back for me in my life,” said Walsh, who works as a construction contractor and manager in Portland. “There’s a lot of meaning in it.”
In a future world, when the land is part of Sisters, he sees the meadow as a park or nature preserve to educate kids as neighborhoods are developed around it.
Just south of the property lies Whychus Creek, a stream where agencies have worked to restore habitat and native fish. Not far is the confluence with Indian Ford Creek, which several groups are also working to restore. Similar to Walsh, members of the citizen committee that drew the proposed urban expansion see the areas as places where future neighborhoods will have easy access to nature.
But those features are now causing trouble for the City. When three state agencies flagged the presence of wetlands and streams in a June 3 letter, the Deschutes County Planning Commission extended its public hearing on the Sisters expansion. On July 9, state planners clarified that their letters weren’t meant to hold up the expansion, but were merely a setup for the environmental planning process that’s expected to happen once Deschutes County approves the expansion.
That caused Sisters planners to quickly submit a package of changes to Deschutes County to clean up what they called a “quirk” in County code and ensure wetland protections as the land is in limbo between jurisdictions.
The City hopes the planning commission will recommend approval of both the code amendments and the urban expansion at an Aug. 27 meeting.
But that procedural step means more time — and provides another avenue for appeals that could drag the proposed expansion past the critical end of year deadline.
Chris Koback, a land use attorney for the McKenzie Meadows property, mentioned that possibility during a public hearing July 9.
Sisters Community Development Director Scott Woodford told the Source he believes that as long as Deschutes County approves the expansion by the deadline, Sisters won‘t have to redo its planning process.
That is not given.
Historically, the County’s decision-making boards have been sympathetic to developer requests. Willitts has donated tens of thousands of dollars to help both Republicans and Democrats get elected to the Deschutes County Commission, including outgoing commissioner Tony DeBone and commissioner-elect Rick Russell. Even Commissioner Phil Chang, who usually votes against rezoning farm and forest land, supported the McKenzie Meadows rezone.
Deschutes County Planning Commission Chair Matt Cyrus — a Sisters farmer whose family has developed destination resorts — raised questions July 9 about whether the expansion lands could be easily developed, given the pushback of some landowners.
“My concern is whether or not you have a Tetris problem on your hands,” Cyrus said.
But under the state’s urban growth boundary rules, staying away from expanding to farm and forest lands matters more than whether landowners of residential lands actually want to develop.
To some, the Sisters expansion is an example of the state’s land use system gone wrong. In a May article, the property rights group Oregon Property Owners Association called it a “slow-motion train wreck.”
But to Walsh, who is looking forward to his family’s property coming into the boundary, McKenzie Meadows seem to have hijacked the civic process.
“As a community, can we get together and come to a consensus agreement about what to do so we don’t fight it out in the courts for the next three to five years? We have a screaming affordability problem in Sisters,” Walsh said. “There’s so many ways in which a three-to-five-year fight about the UGB expansion in Sisters is terrible for the community.”
And to Willitts, the land use system has become weaponized. He doesn’t think it’s what the founders of the system intended.
“We have to have common purpose,” he said. “We have to come together and say ‘your extreme isn’t working.’”
Editor’s note: This article has been updated to clarify that Gov. Tina Kotek visited the Mckenzie Meadows property during an October tour through Central Oregon. A previous version misstated that she had been called back to Salem prior to the visit.
This article appears in the Source July 16, 2026.
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Missing from this story key detail that the area McKenzie meadows wants to build is home to the protected species of Penstemon flower, which across the world grows in only Central Oregon! Biologists have brought this before the hearings. This plant does not grow in the area that is in the approved UGB area east of sisters. (For more details, search the Nugget article by Roma Givot). The MMV group puts lots of money into their self-interested campaign, they act as though the city owes them a favor, but their bully approaches to approval are finally hitting a stop with the city. There are good reasons the UGB has not included them, and the proposed area actually has a ready to go development plan with affordable housing, and land owners have signed contracts of intent. Let’s protect nature, say no to bullies!