Oregon's Transportation Planning Rule (TPR), at OAR 660-12-0060 (here, scroll down about three-quarters of the way) requires local governments to consider the effect on transportation facilities when they consider applications for zone changes, zoning code changes, and amendments to the local comprehensive land use plans. A "transportation facility" is anything that moves people or goods, except utility lines.
When Tri-Met (as it was then called) built the first MAX line (the one to Gresham) in the mid-1980s, it asked the City of Portland and Multnomah County to upzone the land around the proposed stations to accommodate higher densities. The city and county happily obliged. Similarly, Tri-Met (as it was still called) asked Beaverton, Hillsboro, and Washington County to upzone land around the stations on the west side light rail to Hillsboro when that line went in about 10 years later.
Now, TriMet (which paid someone a fortune to drop the hyphen) proposed to build a light rail line to Milwaukie. One difference between now and when the Gresham and Hillsboro lines were built is that the Transportation Planning Rule is now in effect.
A second difference is that it's become apparent that TriMet can't afford to maintain district-wide bus service at effective levels and also run light rail.
Similarly, TriMet, Portland, and Milwaukie will look to upzone areas around the light rail stations on the Milwaukie line. When the line goes into service, TriMet will likely need to cut some more bus service. The question that occurs to me is whether, when Portland and Milwaukie consider whether to change the zones around the Milwaukie light rail stations, the TPR will require them to evaluate not only whether the new light rail line can adequately serve the upzoned areas, but whether TriMet's service cuts elsewhere will make some other transportation facility, or TriMet itself, unable to serve the demand induced by the upzoning.
Another wrinkle hidden in the TPR is in subsection (4), which as I read it entitles the local government to rely on a planned transportation improvement (such as a proposed highway widening or mass transit line) only if a funding mechanism is in place to build, maintain, and operate it, unless the planned transportation improvement is in a metropolitan planning organization's area (think Metro here) and is "part of the area's federally-approved, financially constrained regional transportation system plan."
What I think this means is that if Metro plans light rail on every block, and gets the plan approved by the United States Department of Transportation, then local governments can approve increased densities regardless of whether the lines have any chance of actually being built. Similarly, if Metro's transportation plan includes a 10-lane Columbia River Crossing, and if the feds approve that plan, then the City of Portland can approve higher densities along the I-5 corridor in North Portland and Hayden Island (as, for instance, on the Port of Portland's property at the west end of Hayden Island), relying on the CRC to serve that increased traffic, even if the CRC never gets built.
I'd like to think that I'm misreading the TPR, but I'm afraid that I'm not.