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HomeMy WebLinkAboutAgenda Item - 2021-11-16 - Number 6.2 - Joint Meeting with the Planning Commission on House Bill 2001 6.2 /;._ 1 COUNCIL REPORT OiVIL14;4. o OREGOt.4 Subject: Middle Housing Code Advisory Committee (House Bill 2001) Meeting Date: November 16, 2021 Staff Member: Erik Olson, Senior Planner (Joint Meeting with Planning Commission) Department: Planning and Building Services Report Date: November 4, 2021 Action Required Advisory Board/Commission Recommendation ❑ Motion ❑ Approval ❑ Public Hearing ❑ Denial ❑ Ordinance ❑ None Forwarded ❑ Resolution ❑X Not Applicable ❑ Information Only Comments: ❑X Council Direction ❑ Consent Agenda Staff Recommendation: n/a Recommended Language for Motion: n/a Project/ Issue Relates To: Council Initiative to "Adopt codes that comply with HB 2001 that are consistent with the community's sense of place, neighborhood character, and livability." Issue before Council: Provide direction on the next stage of the City's process to adopt code that complies with HB 2001 and is consistent with the community's sense of place, neighborhood character, and livability. ❑X Council Goals/Priorities ❑Adopted Master Plan(s) ❑Not Applicable ISSUE BEFORE COUNCIL Provide direction to staff on the next stage of the City's process to adopt code that complies with the minimum requirements for middle housing set forth in House Bill 2001 (HB 2001). 503.635.0215 380 A Avenue PO BOX 369 Lake Oswego, OR 97034 www.lakeoswego.city Page 2 EXECUTIVE SUMMARY Consistent with the City Council initiative to, "Adopt codes that comply with HB 2001 that are consistent with the community's sense of place, neighborhood character, and livability," the Council appointed an Ad-Hoc Middle Housing Code Advisory Committee (MHCAC, or the "Committee") to provide high-level policy guidance on key issues related to middle housing implementation required under HB 2001. Now that the Committee process has concluded, staff and consultants with Cascadia partners are proceeding with the second and final phase of work to comply with the bill through further code development, code refinement, and the public review and adoption of code changes. HB 2001 requires that we adopt compliant regulations not later than June 30, 2022, or the State Model Code for Middle Housing would apply directly to the City. Staff is seeking Council feedback on code concepts recommended by the Committee, as well as direction on two process-related questions: 1. Whether to pursue code concepts recommended by the Committee that are not required by the state for compliance with HB 2001. Refinement and testing of some of those concepts would be necessary, which could make it difficult to complete the State- required code updates prior to the June 2022 deadline, as discussed in this report. 2. Whether the recently adopted state legislation requiring cities to permit land divisions to facilitate middle housing ownership opportunities (Senate Bill 458)could complicate the City's work, and require more time to implement non-mandated concepts such as the allowance of detached forms of middle housing. Staff recommends that the City adopt code amendments that are required to comply with SB 458 concurrently with the code amendments required for compliance with HB 2001, but the Council should consider whether to pursue non-mandated code amendments under HB 2001, such as the allowance of detached middle housing, in light of SB 458 requirements. BACKGROUND On December 9, 2020, the State of Oregon formally adopted rules intended to implement HB 2001, which provide the roadmap for local governments' compliance with the middle housing requirements in the bill. Shortly thereafter, staff and consultants with Cascadia Partners initiated the City's first phase of work to adopt code amendments compliant with the bill. This process began with a number of opportunities for public engagement in January and February of this year, including a kickoff meeting, several interviews with neighborhood association representatives, and a survey that received over 880 responses from Lake Oswego residents. The Planning Commission also hosted several presentations during this time in order to learn directly from professionals who were involved in the development of HB 2001 or have specific expertise related to middle housing. At a joint meeting held on May 18, 2021, the Council and the Planning Commission received a presentation outlining initial findings and the work products completed during phase one: a Neighborhood Character Report with a qualitative analysis of the development patterns, character and architectural history of Lake Oswego neighborhoods; a Neighborhood Conditions 503.635.0215 380 A Avenue PO BOX 369 Lake Oswego, OR 97034 www.lakeoswego.city Page 3 Analysis with an analysis of existing neighborhood conditions in Lake Oswego; a Plan and Code Audit Memo that identifies Comprehensive Plan and Community Development Code (CDC) sections that should be updated for compliance with HB 2001; and a Middle Housing Opportunities Report containing recommended concepts and alternatives for amending the Comprehensive Plan and CDC for middle housing to be compliant with HB 2001. These reports and other background documents are available on the project web page referenced at the end of this Council Report. This presentation was followed by two Planning Commission work sessions on May 24 and June 14, 2021, where the Commission reviewed the phase one findings and refined a work plan for phase two based on Council direction. At their meeting on June 15, 2021, the Council formally appointed the Ad-Hoc Middle Housing Code Advisory Committee (MHCAC, or the "Committee") to provide high-level policy guidance to the Planning Commission for the development of draft code amendments to comply with HB 2001. See also, Committee Process and Recommendations, below. At a joint study session scheduled for November 16, 2021, the Council and Planning Commission will receive a brief presentation from staff, MHCAC Chair Randy Arthur, and MHCAC Co-Chair Lisa Strader. This presentation will cover the Committee's process and recommendations, recently-passed state legislation that requires cities to permit land divisions to facilitate middle housing ownership opportunities (Senate Bill 458), and a proposed timeline and work plan for completing the project, including adopting code amendments. This presentation will be followed by Planning Commission work sessions on December 13, 2021, and January 10, 2022, focused on the drafting of code amendments that comply with HB 2001 based on Council direction. DISCUSSION The following summarizes the MHCAC process and recommendations, code concepts recommended by the Committee that are not required by the state, recent legislation requiring cities to allow expedited land divisions to facilitate middle housing ownership opportunities (Senate Bill 458), and a proposed process for adopting code amendments that comply with HB 2001 by the June 2022 deadline. Committee Process and Recommendations The Committee was comprised of a balanced membership of 13 voting members representing a diverse set of interests, as follows: • Randy Arthur: Chair, Development Review Commission representative • Lisa Strader: Co-Chair, Diversity, Equity, and Inclusion Committee representative • Rachel Verdick: City Council representative (non-voting member) • Helen Leek: Planning Commission representative (non-voting member) • Cynthia Johnson: 50+Advisory Board representative • Larry Snyder: Historic Resources Advisory Board representative • Stephanie Glazer: Sustainability Advisory Board representative 503.635.0215 380 A Avenue PO BOX 369 Lake Oswego, OR 97034 www.lakeoswego.city Page 4 • Carole Ockert: Neighborhood Chairs Committee of Lake Oswego representative (1 of 2) • Robert Ervin: Neighborhood Chairs Committee of Lake Oswego representative (2 of 2) • Ross Masters: Building Industry Advocate, Crosswater Development • Samuel Goldberg: Affordable Housing Advocate, Fair Housing Council of Oregon • Ralph Tahran: Architect, Tahran Architecture & Planning, LLC • Tam Hixson: Realtor or Real Estate Finance Professional, Windermere Realty • Todd Prager: At-large member (1 of 2),Todd Prager & Associates, LLC • Alexandra Byers: At-large member (2 of 2), Parks, Recreation & Natural Resources Advisory Board The Committee adopted bylaws that established the roles and responsibilities of Committee members and staff, including a provision that, "a vote by two-thirds of the members present and eligible to vote will be required to decide any question."The Committee conducted six meetings between July and October 2021; materials distributed in advance of each meeting were also distributed to members of the public, and are accessible on the City website. Invitations to each meeting were also made available to members of the public, and recordings of each meeting were posted to the City's YouTube page. During these meetings, Committee members considered code concepts related to the following key issues outlined in the MHCAC Key Issues &Work Plan: 1. Preservation of existing residential structures 2. Scale and character of new middle housing 3. Runoff and storm water impacts of middle housing 4. Affordability and accessibility of middle housing Committee members were provided with a series of memos— referred to as "Key Issue Memos"—which contained summaries of the above issues and lists of relevant questions for the group to consider. Polling was conducted by staff at MHCAC meetings in an attempt to reach an agreement on the questions raised in the Key Issue memos; each memo has since been updated to include polling results and a summary of the Committee's discussion on each question /code concept. Staff has also maintained a record of substantive email communications between MHCAC members and/or staff, as well as comments from members of the public to the MHCAC. For a summary of the key issues and discussion of MHCAC recommendations, see Attachment 1. Code Concepts Not Required for Compliance The Committee discussed a number of code concepts for middle housing that address the Council's initiative to pursue code amendments that maintain consistency with, "the community's sense of place, neighborhood character, and livability." Many of these code concepts involve modifications to the City's existing siting and design standards for single-family 503.635.0215 380 A Avenue PO BOX 369 Lake Oswego, OR 97034 www.lakeoswego.city Page 5 housing to better address middle housing and its anticipated impacts. Pursuant to Council direction, staff plans to incorporate many of these siting and design concepts into the code amendments that will be considered for adoption prior to the June 30, 2022 deadline. However, a number of the code concepts that were intended to address the Council's direction to maintain neighborhood character and livability would have wider applicability, and amendments to incorporate these broader concepts would not necessarily need to be adopted concurrently with other code amendments required by June 2022. For example, though the state does not specifically require that cities allow for the development of detached duplexes, triplexes, and quadplexes in order to comply with HB 2001, the Committee recommended code amendments that would permit such detached "plexes" in Lake Oswego. Code concepts recommended by the Committee that are not technically required under HB 2001 include the following: • Recommendation 1.a: Revise the definition of"demolition" to include remodels that remove more than 50%of the exterior walls of the house. • Recommendation 1.b: Define duplexes, triplexes, and quad-plexes to include detached units, in addition to attached units. o Recommendation 2.h: Regulate open space for detached duplexes, triplexes, and quadplexes in the same manner as for attached "plexes". Open space is assumed to be in yard setbacks but could also be in common areas between buildings on the same lot. Do not specify minimum size or location of open space. o Recommendation 2.i:Allow smaller front or rear yard setbacks of 10-15 feet (compared to 25 ft/30 ft front/rear) for detached duplexes, triplexes, and quadplexes, as is allowed for cottage cluster housing. • Recommendation 3.a: Limit the development of impervious surfaces to mitigate the impacts of increased density. Currently impervious surface limits apply in only two neighborhood overlays: Glenmorrie, Lake Grove, and Uplands. • Recommendation 4.a: Provide financial incentives for middle housing projects that include a minimum number or percentage of income-restricted affordable units or meet certain accessibility standards. Currently, financial incentives apply to accessory dwelling units and multifamily affordable housing projects of 20 or more units. o Recommendation 4.a.i: Revise the City's current SDC exemption policy so that it applies to middle housing developments that provide a minimum percentage of income-restricted affordable units or meet certain accessibility standards. o Recommendation 4.a.ii: Provide property tax exemptions for middle housing developments that provide a minimum percentage of income-restricted affordable units or meet certain accessibility standards. See Attachment 1 for a more in-depth discussion of code concepts listed above. 503.635.0215 380 A Avenue PO BOX 369 Lake Oswego, OR 97034 www.lakeoswego.city Page 6 Senate Bill 458 In May of 2021, the Oregon legislature adopted Senate Bill 458 (or "SB 458") as a follow-up to HB 2001 in order to facilitate lot divisions for middle housing that enable units to be sold or owned individually (see Attachment 2). As stated in Attachment 3, "For any city or county subject to the requirements of House Bill 2001, Senate Bill 458 requires those jurisdictions to allow middle housing lot divisions for any HB 2001 middle housing type (duplexes, triplexes, quadplexes, townhouses, and cottage clusters)" built pursuant to the state's minimum requirements for middle housing (ORS 197.758). SB 458 only applies to land divisions permitted on or after June 30, 2022, which is the same date as the state's deadline for compliance with HB 2001. The bill requires that cities process middle housing land division applications using an "expedited land division" procedure, as long as the application includes a plan that: • Complies with applicable middle housing land use regulations and the Oregon Residential Specialty Code; • Provides separate utilities for each dwelling unit; • Provides "Easements necessary for utilities, pedestrian access, common use areas or shared building elements, dedicated driveways/parking, and dedicated common area"; and • Results in no more than one dwelling unit per each resulting lot or parcel. The bill is intended to facilitate land divisions for middle housing where the original or "parent" lot complies with applicable middle housing requirements, in order to make dwelling units in middle housing developments available for individual ownership. This is primarily intended to address the difficulty of making middle housing units available for ownership currently, given that ownership models such as condominiums typically have additional costs associated with insurance and maintenance, including homeowners associations, as compared to dwellings on individual lots. Unlike other partition or subdivision processes contained within the City's code currently, land divisions to facilitate middle housing would not always accompany an increase in the density permitted on a given lot or parcel. Because HB 2001 requires that cities allow an increased number of dwelling units on parcels that meet minimum lot requirements regardless, land division applications are not necessary to develop middle housing with up to four units on parcels currently zoned for single-family residential use. As outlined in Attachment 3, cities will, "retain the ability to require or condition certain things, including further division limitations, street frontage improvements, and right-of-way dedication if the original parcel did not make such dedications." However, cities are not allowed to apply approval criteria beyond those provided in SB 458 (Attachment 2); this means that the City could not require additional driveways, vehicle access, parking, minimum or maximum street frontage, or other requirements inconsistent with HB 2001. Staff notes that, while SB 458 does limit the ability for cities to condition or require such elements, compliance with all 503.635.0215 380 A Avenue PO BOX 369 Lake Oswego, OR 97034 www.lakeoswego.city Page 7 applicable middle housing regulations—including those related to vehicular access, parking, frontage width, etc.—would still need to be demonstrated on the "parent" lot prior to a middle housing land division. Updated Phase 2 Work Plan Staff has drafted an updated work plan for the final stages of the City's work to comply with HB 2001 (Attachment 4) outlining next steps to develop the MHCAC's recommendations into code language for Planning Commission review and eventual adoption by City Council. Multiple Planning Commission work sessions are proposed in order to prepare draft code amendments, as well as another "check-in" with the City Council prior to draft code amendments going to a public hearing. These meetings will provide the Council with several opportunities to refine policy direction relevant to the implementation of middle housing, and will allow the Planning Commission to receive more updated guidance from City Council prior to staff finalizing the proposed code amendments for a public hearing. The work plan also includes opportunities for public engagement, including two "community forum" events and ongoing opportunities for neighborhood associations to request meetings with City staff to answer questions or present to their members. The first of these community forums is tentatively scheduled to be held virtually on December 9, 2021 at 6:30 PM. An online tool is being developed for the public to provide input on middle housing code concepts if they are unable to attend or want to provide input following the event. RECOMMENDATIONS With respect to the question of how to prioritize code concepts not required by the state for compliance with HB 2001, staff recommends that the City conduct economic feasibility testing to further explore MHCAC Recommendation 3.a, "Limit the development of impervious surfaces to mitigate the impacts of increased density." This will allow the Planning Commission to make a more fully-considered and informed decision regarding whether to apply impervious surface limitations in all single-family residential zones, while allowing for further exploration of concerns identified by the Committee that such regulations could make middle housing development less feasible. Staff recommends that other code concepts not required to be adopted by the state-mandated deadline of June 30, 2022 be explored at a later date in order to more fully assess their potential impacts. Recommendations related to affordability and accessibility of middle housing would be most appropriate to consider when the City updates its Housing Needs Analysis and develops housing production strategies pursuant to House Bill 2003; staff anticipates that the City will begin to conduct this work in mid-2022. Due to workload-related concerns, staff recommends considering code concepts that would modify the definition of"demolition"to be more inclusive of significant structural removal (1.a) at a later date, due to the potential impact on the City's demolition tax, and the effect these changes could have on development of other types of housing. Staff also recommends considering code changes that would permit the construction of detached "plexes" (1.b, 2.h. 503.635.0215 380 A Avenue PO BOX 369 Lake Oswego, OR 97034 www.lakeoswego.city Page 8 2.i) at a later date, after HB 2001-compliant code amendments have been adopted by the City. This would help ensure that the City meets the State-mandated deadline for HB 2001 compliance and provide more time for the additional research and analysis required by DLCD to demonstrate that these concepts do not result in "unreasonable cost or delay" to the development of middle housing, as both concepts would only be permitted through DLCD's "alternative track" process. Finally, staff recommends adopting code amendments that comply with the middle housing land division requirements of SB 458 concurrently with other code amendments required under HB 2001. Guidance provided by DLCD indicates that, if a City were not to incorporate middle housing lot division standards into their development code by the June 30, 2022 deadline, the City would instead be required to directly apply the bill's language in order to process SB 458 middle housing land division applications. Staff suggests that amending the City code to incorporate SB 458 land divisions would be a more straightforward and less administratively-cumbersome way to comply with the bill. ATTACHMENTS 1. MHCAC Key Issues Summary Memo, 11/02/2021 2. Enrolled Senate Bill 458, 5/17/2021 3. DLCD Senate Bill 458 Guidance, 7/8/2021 4. Revised Phase Two Project Timeline, 11/2/2021 BACKGROUND MATERIAL AND REFERENCES Use the link below to visit the City's HB 2001 "Project" webpage, which contains links to background materials and references mentioned above. https://www.ci.oswego.or.us/house-bills-2001-and-2003 503.635.0215 380 A Avenue PO BOX 369 Lake Oswego, OR 97034 www.lakeoswego.city ATTACHMENT 1 2021 Middle Housing Code Advisory Committee tiA F Key Issues Summary Memo Preliminary draft on October 7, 2021 ~' AM V �- O Final update November 3, 2021 OREGO� KEY ISSUES 1. Preservation of existing residential structures 2. Scale and character of new middle housing 3. Runoff and storm water impacts of middle housing 4. Affordability and accessibility of middle housing 1. PRESERVATION OF EXISTING RESIDENTIAL STRUCTURES Members of the City Council and Planning Commission expressed concern that permitting middle housing in Lake Oswego could increase the rate of demolitions of existing residential structures, including existing naturally-occurring affordable (or relatively-affordable) housing. The Middle Housing Code Advisory Committee (the "Committee") was provided with direction to explore potential incentives to encourage conversions or additions that create middle housing (as an alternative to demolitions) in order to promote the preservation of existing buildings. Committee discussion surrounding this topic indicated over 2/3 support'for the following code concepts: a. Revise the definition of"demolition" to include remodels that remove more than 50%of the exterior walls of the house. Members felt that this recommendation would help to prevent builders from pursuing projects that almost completely demolish an existing structure while still being considered a "remodel" under the current definition of"demolition". Under this current definition, a builder is able to demolish all but just one wall of an existing structure while not being required to classify the project as a "demolition", thus allowing builders to maintain nonconforming setbacks and lot coverage and avoid the City's recently-adopted $15,000 per dwelling-unit tax on residential demolitions. Changing the definition of"demolition" could encourage remodel projects that preserve more of the existing structure than under the current definition, while also working to disincentive demolitions of existing residences. Any revisions to the definition of demolition would 'The bylaws adopted by the MHCAC require a vote by two-thirds of the members present and eligible to vote to decide any question. Middle Housing Code Advisory Committee Key Issues Summary Memo Page 1 of 14 PP 19-0008 Attachment 1/Page 1 of 14 have broad applicability and would not just apply to middle housing, so further analysis would required to test the feasibility of any proposed changes. Though there was support for modifying the definition of "demolition" among many Committee members, one member expressed concern that this approach could result in adverse impacts on existing neighborhood character and recommended waiving the demolition tax for middle housing projects. Another member suggested a requirement that a reasonable opportunity be provided to a representative from the Historic Resources Advisory board to thoroughly photograph the interior and exterior of any structure that had been listed on the National Register of Historic Places or local Lake Oswego historic landmark designation list prior to its demolition. Next steps: Work with the Planning Commission to further consider concepts for how nonconforming development is defined and whether demolition tax applicability should be changed, particularly with respect to the threshold that must be reached in order for the project to qualify as a "demolition" (as compared to a remodel). Conduct feasibility testing and determine the extent of the impact this definitional change would have on existing City policies related to demolition and on development trends more broadly. b. Define duplexes, triplexes, and quad-plexes to include detached units, in addition to attached units. While some Committee members questioned the likely effectiveness of preserving existing houses by allowing for detached forms of duplexes, triplexes, and quadplexes, members were generally supportive of detached "plexes" even in cases where an existing house is not preserved. Members stated that they supported detached "plexes" because they could allow additional flexibility for middle housing developments to better respond to topographical constraints, and because they could potentially result in more accessible dwelling units that would be more conducive to multi- generational living. There was general interest in exploring the question of detached "plexes" in further detail, particularly whether the City would only allow detached versions of certain types of "plexes" (for instance, allow detached duplexes but not detached triplexes or quadplexes). Committee members expressed particular concerns regarding the specifics of how detached duplex, triplex, and quadplex units would be regulated. Some members were concerned that it may be difficult to craft regulations for detached "plexes" that both comply with state requirements and result in a positive design outcome. For instance, one member noted that detached duplex, triplex, or quadplex developments would not be subject to the same standards that could be applied to cottage cluster developments, which are similar in concept to detached plexes but include different dimensional and design standards that are more appropriate for detached forms of middle housing. Another Committee member noted that, while the flexibility to construct detached units could produce a more positive design outcome, dimensional and design regulations should be further refined for both detached and attached middle housing developments in order to mitigate potential negative impacts on adjacent neighbors— particularly those related to access lanes constructed near adjacent properties. Middle Housing Code Advisory Committee Key Issues Summary Memo Page 2 of 14 PP 19-0008 Attachment 1/Page 2 of 14 Following this discussion, new information was provided by the Oregon Department of Land Conservation and Development (DLCD) clarifying that detached "plex" forms of middle housing must be treated similarly to other middle housing required under Division 46. This means that the City could only apply more refined siting and design standards to detached "plex" developments through an alternative track, as opposed to the minimum standards, which would require that the City conduct more extensive analysis to prove that these standards do not create "unreasonable cost or delay". Considering that cities are not required under Division 46 to allow detached "plex" developments in the first place, a representative from DLCD informally stated that it was reasonable to assume that applying different siting and design standards for detached "plexes" would not be expected to create such cost or delay. Code concepts were further explored at MHCAC Meeting#6 to address design and compatibility issues that may arise if detached "plexes" are permitted. See the Detached Duplex/Triplex/Quadplex discussion in the Remaining Issues Memo (last updated on October 25, 2021) and the Scale and Character of New Middle Housing section, below, for more discussion and next steps related to detached plex regulations. The Committee did not reach a clear consensus on other questions related to this topic, though half of the Committee did express support for a code concept that could preserve existing housing through the adoption of incentives to encourage conversions of or additions to single family dwellings (SFD) that create middle housing. The Committee also expressed 50% support for a code concept to not require that conversions of or additions to existing SFDs that create middle housing be consistent with the style and architecture of the existing structure. For a more in-depth review of the Committee's consideration of these issues, please refer to Key Issue#1 Memo: Preservation of Existing Homes (last updated on October 26, 2021). 2. SCALE AND CHARACTER OF NEW MIDDLE HOUSING The City Council has directed staff to pursue the minimum compliance standards of Division 46, which generally require that cities apply the same or less restrictive dimensional standards (or "siting standards" in terms used in the state rules) to middle housing as apply to single-family housing. For Lake Oswego, dimensional standards include setbacks, height, setback planes, lot coverage, floor area ratio, and other requirements associated with utilities and public facilities. The Council also directed staff to apply the City's existing design standards to middle housing, with a suggestion to add new clear and objective standards that comply with state rules for middle housing in order to maintain consistency with existing homes and neighborhood character, as appropriate. In Lake Oswego, existing design standards regulate different form-based attributes of buildings, including garage appearance, long wall planes, roof projections, and in some zones, front porch, roof pitch, and other features. Under this direction, the City can regulate design features to ensure that middle housing has a scale and character that is consistent with existing homes or neighborhood character—as long as the same design standards that apply to middle housing also apply to single-family housing. These design Middle Housing Code Advisory Committee Key Issues Summary Memo Page 3 of 14 PP 19-0008 Attachment 1/Page 3 of 14 standards must scale with form-based attributes of the site or building, not with the number of dwelling units. Committee discussion on this issue indicated over 2/3 support for the following code concepts: a. Apply existing bulk and massing standards (or "dimensional" standards)for single-family housing to middle housing. Members generally felt that the current building envelopes in the Code were appropriate for the scale and character of the City. Some expressed concern that decreasing or "tightening" the building envelope could make it overly cumbersome to construct certain forms of middle housing (and may not comply with state regulations), while others were concerned that increasing or "loosening" the building envelope could increase the bulk or cost of single-family dwellings. Next steps: Work with the Planning Commission to further refine and develop this concept into recommended code language. b. Do not limit building width beyond existing setback regulations. Members expressed concern that building width limitations could produce undesirable design outcomes, with one member noting that some of the more desirable examples of middle housing would likely not comply with stringent building width limitations. One member also expressed concern that building width limitations could inadvertently encourage taller housing developments that may be less accessible to residents with a disability. Though members were clear that they did not support limiting building frontage width to a specific length or distance, some expressed support for a limitation on building width tied to a set proportion or percentage of the width of the overall lot. One member expressed concerns that, in conditions where lots are consolidated or larger than the minimum lot size, side setbacks alone may not adequately maintain building width, form, and massing patterns characteristic of that neighborhood. Members generally agreed that, though the "street side" of a development is certainly an important component of the design, it may be even more important to consider the potential impacts of middle housing development on abutting properties. Code concepts were further explored at MHCAC Meeting#6 to address concerns that wide or uninterrupted building facades may negatively impact neighborhood character. However, following that discussion, the Committee did not opt to recommend any additional building width or façade articulation standards—consistent with their direction on the original question. See the discussion on Building Width and Facade Articulation in the Remaining Issues Memo (last updated on October 25, 2021) for more. Code concepts were also further explored at MHCAC Meeting#6 that would address the potential impact of activity in side and rear yards on neighboring residents. See the discussion on Screening and Buffering in the Remaining Issues Memo (last updated on October 25, 2021) for more. Middle Housing Code Advisory Committee Key Issues Summary Memo Page 4 of 14 PP 19-0008 Attachment 1/Page 4 of 14 Next steps:Work with the Planning Commission to further refine and develop this concept into recommended code language. c. Enhance existing single-family garage appearance standards to better address the negative visual impacts of front-facing garages and driveways. Members agreed that existing garage appearance standards should be updated to address the potential implications of middle housing, a recommendation that would also address concerns that were identified more broadly by the community in the Neighborhood Character Survey results regarding front-facing garages and driveways. Members expressed differing views on the benefits or drawbacks of streets containing many garages and curb cuts, with some members concerned that more driveways and curb cuts could reduce the availability of on-street parking, and others concerned that more on-street parking could produce an unsafe pedestrian environment by limiting visibility. One member pointed out that some garage design standards may impact accessibility for individuals with a disability, and that garages and driveways when designed appropriately can help provide ADA-compliant access to the street. Next steps: Work with the Planning Commission to further refine and develop this concept into recommended code language. d. Apply existing single-family housing design standards for driveways and garages to townhouses. The polling question presented to the Committee on this subject allowed members to select options that would indicate full support of the concept to apply existing single-family housing design standards for driveways and garages to townhouses, and another option that would indicate support for the concept while still expressing concerns about the potential negative impacts of wide garages and driveways. Though less than 2/3 of the Committee voted in support of this specific concept with no caveats (64%), staff has included this recommendation because an additional 27%of members were also tentatively in support of the concept while concurrently expressing concerns that the existing single-family housing design standards could result in wider and more visually-dominant garages and driveways for townhouse developments. Taken in combination, there is a clear trend that the Committee did not support applying DLCD Model Code standards for driveways and garages to townhouses or other middle housing types, as less than 10% of Committee members voted for the other polling options that would apply DLCD Model Code Standards to townhouses. During the discussion it was mentioned that, under the DLCD Model Code Standards, garages could occupy a greater percentage than currently allowed under the development code (60%) on townhouses with street frontages of less than 20 feet. Staff reminded Committee members that, while the regulations in the Model Code may be less restrictive for buildings with a frontage width of less than 20 feet, the Model Code would be more restrictive for buildings with a frontage width of over 20 feet. Some Committee members expressed concern about challenges that could emerge for those with different accessibility needs if the City were to further limit driveway and Middle Housing Code Advisory Committee Key Issues Summary Memo Page 5 of 14 PP 19-0008 Attachment 1/Page 5 of 14 garage space. Other members expressed that, while they felt it was important to address concerns related to the visual impact of driveways and garages, they were concerned that these limitations could negatively impact the feasibility of developing townhouse units. Next steps:Work with the Planning Commission to further refine and develop this concept into recommended code language, while also addressing the potential negative visual impacts of wide garages and driveways. e. If landscaping is required for all new single-family and middle housing developments, include tree canopy requirements. Though the Committee was split on the question of whether landscaping should be required for all new single-family and middle housing developments, there was consensus that—if such requirements are instituted —they should take the form of requirements for a certain percentage of the lot to be covered by tree canopy. Staff notes that there was significant consensus on this issue amongst the group, as 90%of voting-eligible Committee members supported the concept of landscaping taking the form of a tree-canopy standard, if required. This option received more support than other code concepts that would define landscaping to include other elements, such as front yard or foundation landscaping. Next steps:Seek City Council direction on whether to regulate tree canopy under the Development Code (apart from the City's sensitive lands regulations). Subject to Council direction, work with the Planning Commission to refine and develop this concept into recommended code language. f. Limit the size of units within a cottage cluster. Although there was no clear consensus as to a specific recommended size, Committee members supported limiting the size of cottage cluster units in order to maintain consistency with existing neighborhood scale and character, and, indirectly, to promote housing affordability. Members expressed concerns that developers would be prone to maximize the square footage of individual cottage units if the City allows for those larger units. One member also expressed concerns related to accessibility, stating a preference for more square footage to be located on the ground floor of cottage cluster units when possible. Next steps:Work with the Planning Commission to further refine code concepts for how to limit the size of units within a cottage cluster, and develop these concepts into recommended code language. Coordinate these code concepts with the concepts for detached forms of middle housing. g. Apply any design standard that applies to single-family housing to cottage cluster housing, as long as the standard does not conflict with the DLCD Model Code. While some members cautioned that the City should not be overly prescriptive with architectural style, form, or other design requirements, some also noted that designers are capable of responding to complex or prescriptive design standards, including specifications for modern or innovative buildings designs. Middle Housing Code Advisory Committee Key Issues Summary Memo Page 6 of 14 PP 19-0008 Attachment 1/Page 6 of 14 Next steps:Work with the Planning Commission to further refine and develop this concept into recommended code language. h. Regulate open space for detached duplexes, triplexes, and quadplexes in the same manner as for attached "plexes". Open space is assumed to be in yard setbacks. Do not specify minimum size or location of open space. The Committee was not supportive of additional open space or courtyard requirements for detached duplexes, triplexes, or quadplexes, which would align the requirements for detached plex developments more with the requirements for cottage cluster developments. One member expressed concerns that any requirements for the size or location of open space could work against the purpose of allowing detached plexes to begin with —which this person felt was to offer additional flexibility for property owners to add middle housing units to a given site. While there was general support to provide additional flexibility for detached plex developments, some members also felt strongly that building entrances should still be required to face either a street or open space. Staff was able to clarify that the entrance requirements for attached plex units—which include requirements that entrances face either open space or the adjacent street— could also be applied to detached units (similar to cottage clusters). Next steps: Work with the Planning Commission to further refine and develop this concept into recommended code language. i. Allow smaller front or rear yard setbacks of 10-15 feet for detached duplexes, triplexes, and quadplexes, as is allowed for cottage cluster housing. Committee members agreed with the concept of providing more flexibility for the layout of a detached plex site by allowing for reduced front or rear yard setbacks for such developments. Members expressed support for this concept in part because the setback reduction would provide additional flexibility to facilitate the construction of detached plex units, and in part because such reduced setbacks could produce larger and more usable open spaces to accompany such units. However, other Committee members expressed concerns that allowing for reduced setbacks could produce a negative impact on neighborhood character. One member stated that— because of the results of the previous question —the reduced setbacks would not be accompanied by open space requirements, and was concerned that developers may simply choose to maximize their building envelope and not provide additional open space. Staff clarified that there are numerous other mechanisms within the code intended to control the bulk and massing of buildings, such as lot coverage and floor area, and that these would continue to apply in a way that ensures that the additional space allowed for the setback would not actually permit a larger building envelope/ mass than would be permitted for a single-family dwelling or other types of middle housing. Next steps: Work with the Planning Commission to further refine and develop this concept into recommended code language. Middle Housing Code Advisory Committee Key Issues Summary Memo Page 7 of 14 PP 19-0008 Attachment 1/Page 7 of 14 Middle Housing Code Advisory Committee Key Issues Summary Memo Page 8 of 14 PP 19-0008 Attachment 1/Page 8 of 14 Other Concepts Considered Though the Committee did not reach a clear 2/3 consensus on other questions related to the scale and character of new middle housing, a majority of members expressed support for the following code concepts: • Create new standards to regulate the design and orientation of entrances for both middle housing and single-family housing, though the details require further discussion. • If landscaping is required for all new single-family and middle housing developments, include front yard landscaping requirements. • Require landscape screening when a garage or parking lot faces a side or rear lot line. • Do not require additional design standards relating to façade and entry elements for single-family and middle housing The Committee was more divided on polling questions related to landscaping requirements, with a 40% plurality of members voting for the City to institute landscaping requirements based on a percentage of lot area. Members questioned how the City would define "landscaping," pointing out that requiring more grass, for instance, might not necessarily result in positive environmental outcomes. Members were supportive of native, drought-resistant landscaping as well as a healthy tree canopy, stressing the importance of conserving water for the future through drought-tolerant plantings. Members acknowledged that some strategies intended to enhance aesthetics through landscaping may have unintended consequences for other important goals related to sustainability and resiliency in the face of climate change. One member cautioned that front-yard landscaping requirements could preclude more modern or minimalist landscape design approaches intended to highlight architectural form, and felt that it was more important for landscaping to be used to soften visual impacts on neighbors to the side of a proposed development than for curb appeal. Another stated concerns that "foundation plantings" could lead to increased risk of fire damage, as deciduous plantings located near buildings could have the unintended consequence of spreading fire adjacent to the primary structure. Staff notes there could also be administrative and enforcement challenges with implementing some of these concepts. For a more in-depth review of the Committee's consideration of these issues, please refer to Key Issue#2 Memo, pt. 1: Scale and Character of Duplexes,Triplexes, and Quadplexes (last updated on October 26, 2021), Key Issue#2 Memo, pt. 2: Scale and Character of Townhouses and Cottage Clusters (last updated on September 22, 2021), and the Remaining Issues Memo (last updated on October 26, 2021). 3. RUNOFF AND STORMWATER IMPACTS OF NEW MIDDLE HOUSING As densities increase with middle housing we anticipate removal of more landscaping and trees to make way for more driveways, patios, and other features, unless the City limits development of these features. Middle Housing Code Advisory Committee Key Issues Summary Memo Page 9 of 14 PP 19-0008 Attachment 1/Page 9 of 14 The Committee was provided with direction to explore potential limitations on the development of impervious surfaces for middle housing and single-family homes. When considering the polling results as a whole, there is a clear trend that the Committee was interested in further exploring the following code concept: a. Limit the development of impervious surfaces to mitigate the impacts of increased density. The polling question presented to the Committee on this subject allowed members to select an option that would indicate full support of the concept to limit the development of impervious surfaces for both single-family and middle housing development, as well as another option that would indicate support for the concept while still expressing concerns related to the impact of these requirements on development feasibility. Though just —44% of the Committee voted in support of this specific concept with no added caveats or qualifiers, staff has included this recommendation because an additional "44% of members were also tentatively in support of the concept while concurrently expressing concerns that the impervious surface limitations could make it less feasible to develop middle housing. Taken in combination, there is a clear trend that the Committee was interested in further exploring impervious surface limitations, as only—11% of Committee members voted for the other polling option not to apply limitations on impervious surfaces. The Committee also received a comment from a member of the public that supported impervious surface limitations. Despite general support for the concept, Committee members were interested in the specifics of what would be considered a pervious or impervious surface under the code, with one member stating that the use of"pervious" pavers in driveways was not desirable. Another member expressed concern that impervious surface limitations could impact accessibility for individuals with a disability, as impervious surface limitations could disincentive the use of accessible pathways, ramps, or other features that would improve accessibility. Staff responded that it would be appropriate to conduct a feasibility analysis to determine the extent to which an impervious surface requirement could impact the ability to develop accessible middle housing units, in order to better "calibrate" the proposed requirement. Another member expressed concern that percentage-based impervious surface limitations could disproportionately impact development feasibility on smaller lots, but thought that the percentage-based requirements may be more appropriate on larger lots. Staff responded that this issue could be explored when conducting a feasibility study, and that it may be appropriate to "calibrate" required impervious surface requirements based on lot size. There was also some discussion of specific site conditions that may further necessitate impervious surface limits, such as steeply-sloped sites or sites containing soils that do not drain well. While some members felt that impervious surface limitations would be most appropriate for sites with these types of conditions, others felt that such limitations are needed on a City-wide basis. Members also discussed the utility of larger trees in absorbing stormwater on-site, with one member suggesting that retaining significant trees should be a component of the City's strategy related to impervious surfaces. Middle Housing Code Advisory Committee Key Issues Summary Memo Page 10 of 14 PP 19-0008 Attachment 1/Page 10 of 14 Next steps:Seek City Council direction on whether to limit development of impervious surfaces to mitigate impacts of increased density. Subject to Council direction, conduct feasibility testing in order to calibrate/develop a more specific recommendation related to impervious surface limitations. As applicable, work with the Planning Commission to refine this concept into code language. For a more in-depth review of the Committee's consideration of these issues, please refer to Key Issue#3 Memo: Stormwater (last updated on October 26, 2021). 4. AFFORDABILITY AND ACCESSIBILITY OF NEW MIDDLE HOUSING City Council directed the Committee to recommend approaches to encourage middle housing developed under HB 2001 to meet the specific housing needs of the community. The two primary needs that have been identified are for units that are affordable to lower or moderate-income households (defined as families earning 80% or less of area median income) and for units that are accessible for people with disabilities, older individuals, or others who otherwise have needs that may not be met by current housing options. Committee discussion on this issue indicated over 2/3 support for the following code concepts: a. Provide financial incentives for middle housing projects that include a minimum number or percentage of income-restricted affordable units or meet certain accessibility standards. Committee members expressed support for producing affordable housing consistent with City Council goals, with some members stating that the City should also attempt to promote housing for people of color or more diverse residents in order to redress the history of racist exclusionary housing practices in Lake Oswego. One member noted that similar forms of discrimination continue to this day, even though they are technically illegal. Other members responded by agreeing with the sentiment that past discrimination should be addressed, but urged caution given the history of fair housing-related legal issues that have emerged when cities attempt to provide housing preference to individuals based on race or other types of legal status protected under the federal Fair Housing Act and Oregon's fair housing statutes. Several members agreed that, even though there may be legal implications for some strategies that would target more diverse residents, the concept was worth exploring further given that other strategies to promote diversity may not have the same legal risk. Though there was general support for providing financial incentives for accessible middle housing units, some Committee members stressed the importance of determining which specific accessibility standard would be incentivized. Other members noted that there are several different standards for accessibility that the City could incentivize, noting that there is no single accessibility standard utilized by builders given their desire for flexibility. See the discussion below for more discussion on the specific types of financial incentives recommended by the Committee. Middle Housing Code Advisory Committee Key Issues Summary Memo Page 11 of 14 PP 19-0008 Attachment 1/Page 11 of 14 i. Revise the City's current SDC exemption policy so that it applies to middle housing developments that provide a minimum percentage of income-restricted affordable units or meet certain accessibility standards. Planning staff noted that the City's existing SDC exemption policy for ADUs has had a measurable impact on increasing their development, with the construction of ADUs doubling in volume after SDC exemptions began to be offered. While members supported the concept of SDC exemptions for affordable or accessible middle housing, they also agreed that there should be a limit to the number of units that could be exempted from SDCs or property taxes. For example, one member suggested that the first unit on a lot would be subject to full SDCs while fees for additional middle housing units might be exempt from or have reduced SDCs. Staff indicated that this approach could be similar to the existing fee waiver for ADUs, which because of their small size are assumed to have a de minimis impact on City infrastructure. Some members expressed concern about making up for any revenue lost through SDC or property exemptions, stating that City infrastructure could deteriorate without sufficient funding. Other members countered that municipalities are able to set budgetary priorities depending on policy direction and that budgetary allocation was not within the purview of the Committee. One member noted that, if the City had concerns about maintaining enough funds to offset potential SDC exemptions, SDC deferrals (require payment at time of occupancy instead of at issuance of building permit) could be another short-term option. Staff clarified that any proposal for financial incentives that would be presented to Council would need to include an assessment of the budgetary impact of the policy as well as alternative approaches, including potential offsets for any lost revenue through other budgetary sources. Next steps:Work with the City Council and Planning Commission to further refine code concepts for SDC exemptions to incentivize affordable or accessible middle housing. ii. Provide property tax exemptions for middle housing developments that provide a minimum percentage of income-restricted affordable units or meet certain accessibility standards. Committee members asked clarifying questions about how property tax exemptions would apply to owner-occupied affordable or accessible units, with staff noting that deed restrictions related to owner-occupied housing are feasible but function differently than for rental housing. One Committee member expressed interest in potentially exploring a "community land trust" model within Lake Oswego in order to ensure the continued availability of homeownership opportunities related to affordable housing. It should be noted that the City currently does not offer property tax exemptions for affordable housing except as required by state law. Next steps:Work with the City Council and Planning Commission to further refine code concepts for property exemptions to incentivize affordable or accessible middle housing. Middle Housing Code Advisory Committee Key Issues Summary Memo Page 12 of 14 PP 19-0008 Attachment 1/Page 12 of 14 b. Do not provide regulatory incentives for middle housing developments that include affordable and/or accessible units. Committee members voiced concern that adjacent neighbors would bear the burden of regulatory incentives that increase bulk, add density, or eliminate parking requirements, and that loosening these zoning requirements could diminish many of the characteristics that residents stated that they valued about their neighborhood during the Neighborhood Character Survey conducted earlier this year. Members also expressed concerns that regulatory incentives could produce less- desirable housing than would be produced otherwise, with members noting that low-income residents should be offered the same quality of housing that would be offered with market-rate housing. Next steps: Convey this recommendation to the City Council and Planning Commission. Though the Committee did not reach a clear 2/3 consensus, a majority of members expressed support for the City to institute a Construction Excise Tax (CET) to help fund affordable housing incentives and programs. Some members expressed concern that CETs would increase the cost of construction in Lake Oswego, with one member stating that the burden of funding affordable housing should not be placed upon homebuilders. Other members countered by stating that a CET could actually encourage builders of affordable housing to work in Lake Oswego by showing that the City values equity and inclusion, and that this added value could make this type of housing more viable or desirable from a builder's perspective. Staff notes that there will likely be another opportunity to discuss the concept of CETs when the City proceeds to update its Housing Needs Analysis and develop a Housing Production Strategy (per House Bill 2003) in coming years. For a more in-depth review of the Committee's consideration of these issues, please refer to Key Issue#4 Memo: Affordability&Accessibility (last updated on October 7, 2021). ISSUES OUTSIDE OF ORIGINAL COMMITTEE SCOPE During the course of the Committee's discussion, some comments and ideas emerged that were not able to be addressed within the scope of the Committee's work. These additional issues are documented below: • Equitable Housing and Racial Justice: One or more Committee members stated that the City should go beyond incenting affordable or accessible units by looking at strategies that would specifically redress the history of racist exclusionary housing practices in Lake Oswego. While some members posed the idea that new housing units could be targeted to people of color or more diverse residents, other members urged caution given the history of fair housing-related legal issues that have emerged when cities attempt to provide housing preference to individuals based on race or other types of legal status protected under the federal Fair Housing Act and Oregon's fair housing statutes. Some members agreed that, even though there may be legal implications for some strategies to target more diverse residents, the concept was worth exploring Middle Housing Code Advisory Committee Key Issues Summary Memo Page 13 of 14 PP 19-0008 Attachment 1/Page 13 of 14 further given that other strategies to promote diversity within the city may not have the same legal risk. • Senate Bill 458: Shortly before the Committee's first meeting, Senate Bill 458 was adopted by the Oregon Legislature. The bill requires jurisdictions subject to the requirements of HB 2001 to allow lot divisions for any type of middle housing allowed pursuant to HB 2001 through an "expedited land division process." The bill also sets forth a series of parameters on how a city must process middle housing lot division applications. Committee members posed many questions about how Senate Bill 458 would impact their decisions, and whether allowing for such expedited land divisions would make it possible not to comply with other requirements under consideration. While staff responded that, generally speaking, they did not see any provisions in SB 458 that would conflict with the direction already provided by the Committee, it will be necessary to discuss the implications of the bill more thoroughly through the public process and seek direction from City Council regarding how to respond. • Stormwater requirements: While discussing potential recommendations related to impervious surface limitations, some members expressed concern that the City's existing Stormwater Code may not be sufficient to accommodate the potential increase in runoff that could result from new middle housing development. • Access and connectivity: One Committee member expressed a desire to explore design standards that would encourage pathways, driveways, and access lanes for middle housing that connect to one another, where practicable. • Land use restrictions for garages: One Committee member expressed an interest in restricting the use of garages to parking only, thus prohibiting the use of garages for storage or other purposes that could result in the need for more on-street parking. City legal staff examined this issue and expressed concerns about the difficulty of enforcing such a restriction, as well as concerns that this restriction could conflict with previously-enacted City policies related to garages. • Garbage and recycling bins: One Committee member suggested that the City explore strategies to require or incentivize the screening of garbage, recycling, and compost bins. • Moratorium on tree removal: One member of the public suggested that, in order to improve the on-site absorption of stormwater runoff, the City should institute a moratorium on the removal of any tree above 15 inches in diameter. Middle Housing Code Advisory Committee Key Issues Summary Memo Page 14 of 14 PP 19-0008 Attachment 1/Page 14 of 14 ATTACHMENT 2 81st OREGON LEGISLATIVE ASSEMBLY--2021 Regular Session Enrolled Senate Bill 458 Sponsored by Senators FREDERICK, KNOPP; Senators GOLDEN, HANSELL, KENNEMER, PATTERSON, Representatives DEXTER, FAHEY, HUDSON, KROPF, LEIF, MEEK, MOORE-GREEN, NOBLE, SMITH DB, WRIGHT, ZIKA (at the request of Habitat for Humanity) (Presession filed.) CHAPTER AN ACT Relating to land division for residential development; creating new provisions; and amending ORS 93.277, 94.775, 94.776, 197.365, 197.370, 197.375 and 197.380. Be It Enacted by the People of the State of Oregon: SECTION 1. Section 2 of this 2021 Act is added to and made a part of ORS 92.010 to 92.192. SECTION 2. (1) As used in this section, "middle housing land division" means a partition or subdivision of a lot or parcel on which the development of middle housing is allowed under ORS 197.758 (2) or (3). (2) A city or county shall approve a tentative plan for a middle housing land division if the application includes: (a) A proposal for development of middle housing in compliance with the Oregon resi- dential specialty code and land use regulations applicable to the original lot or parcel allowed under ORS 197.758 (5); (b) Separate utilities for each dwelling unit; (c) Proposed easements necessary for each dwelling unit on the plan for: (A) Locating, accessing, replacing and servicing all utilities; (B) Pedestrian access from each dwelling unit to a private or public road; (C) Any common use areas or shared building elements; (D) Any dedicated driveways or parking; and (E) Any dedicated common area; (d) Exactly one dwelling unit on each resulting lot or parcel, except for lots, parcels or tracts used as common areas; and (e) Evidence demonstrating how buildings or structures on a resulting lot or parcel will comply with applicable building codes provisions relating to new property lines and, notwithstanding the creation of new lots or parcels, how structures or buildings located on the newly created lots or parcels will comply with the Oregon residential specialty code. (3) A city or county may add conditions to the approval of a tentative plan for a middle housing land division to: (a) Prohibit the further division of the resulting lots or parcels. (b) Require that a notation appear on the final plat indicating that the approval was given under this section. Enrolled Senate Bill 458 (SB 458-A) Page 1 PP 19-0008 ATTACH 2/PAGE 1 OF 6 (4) In reviewing an application for a middle housing land division, a city or county: (a) Shall apply the procedures under ORS 197.360 to 197.380. (b) May require street frontage improvements where a resulting lot or parcel abuts the street consistent with land use regulations implementing ORS 197.758. (c) May not subject an application to approval criteria except as provided in this section, including that a lot or parcel require driveways, vehicle access, parking or minimum or maximum street frontage. (d) May not subject the application to procedures, ordinances or regulations adopted un- der ORS 92.044 or 92.046 that are inconsistent with this section or ORS 197.360 to 197.380. (e) May allow the submission of an application for a middle housing land division at the same time as the submission of an application for building permits for the middle housing. (f) May require the dedication of right of way if the original parcel did not previously provide a dedication. (5) The type of middle housing developed on the original parcel is not altered by a middle housing land division. (6) Notwithstanding ORS 197.312 (5), a city or county is not required to allow an acces- sory dwelling unit on a lot or parcel resulting from a middle housing land division. (7) The tentative approval of a middle housing land division is void if and only if a final subdivision or partition plat is not approved within three years of the tentative approval. Nothing in this section or ORS 197.360 to 197.380 prohibits a city or county from requiring a final plat before issuing building permits. SECTION 2a. Section 2 of this 2021 Act applies only to a middle housing land division permitted on or after July 1, 2022. SECTION 3. ORS 93.277 is amended to read: 93.277. A provision in a recorded instrument affecting real property is not enforceable if: (1) The provision would allow the development of a single-family dwelling on the real property but would prohibit the development of, or the partitioning or subdividing of lands under section 2 of this 2021 Act for: (a) Middle housing, as defined in ORS 197.758; or (b) An accessory dwelling unit allowed under ORS 197.312 (5); and (2) The instrument was executed on or after [August 8, 2019] January 1, 2021. SECTION 4. ORS 94.776 is amended to read: 94.776. (1) A provision in a governing document that is adopted or amended on or after [August 8, 2019] January 1, 2020, is void and unenforceable to the extent that the provision would prohibit or have the effect of unreasonably restricting the development of, or the dividing of lands under section 2 of this 2021 Act for, housing that is otherwise allowable under the maximum density of the zoning for the land. (2) Lots or parcels resulting from the division of land in a planned community are subject to the governing documents of the planned community and are allocated assessments and voting right on the same basis as existing units. SECTION 5. ORS 94.775 is amended to read: 94.775. (1) [Unless the declaration expressly allows the division of lots in a planned community,] Judicial partition by division of a lot in a planned community is not allowed under ORS 105.205[.], unless: (a) The declaration expressly allows the division of lots in a planned community; or (b) The lot may be divided under ORS 94.776. (2) The lot may be partitioned by sale and division of the proceeds under ORS 105.245. [(2)] (3) The restriction specified in subsection (1) of this section does not apply if the home- owners association has removed the property from the provisions of the declaration. SECTION 6. ORS 197.365 is amended to read: 197.365. Unless the applicant requests to use the procedure set forth in a comprehensive plan and land use regulations, a local government shall use the following procedure for an expedited land Enrolled Senate Bill 458 (SB 458-A) Page 2 PP 19-0008 ATTACH 2/PAGE 2 OF 6 division, as described in ORS 197.360, or a middle housing land division under section 2 of this 2021 Act: (1)(a) If the application for [expedited] a land division is incomplete, the local government shall notify the applicant of exactly what information is missing within 21 days of receipt of the applica- tion and allow the applicant to submit the missing information. For purposes of computation of time under this section, the application shall be deemed complete on the date the applicant submits the requested information or refuses in writing to submit it. (b) If the application was complete when first submitted or the applicant submits the requested additional information within 180 days of the date the application was first submitted, approval or denial of the application shall be based upon the standards and criteria that were applicable at the time the application was first submitted. (2) The local government shall provide written notice of the receipt of the completed application for [an expedited] a land division to any state agency, local government or special district respon- sible for providing public facilities or services to the development and to owners of property within 100 feet of the entire contiguous site for which the application is made. The notification list shall be compiled from the most recent property tax assessment roll. For purposes of appeal to the referee under ORS 197.375, this requirement shall be deemed met when the local government can provide an affidavit or other certification that such notice was given. Notice shall also be provided to any neighborhood or community planning organization recognized by the governing body and whose boundaries include the site. (3) The notice required under subsection (2) of this section shall: (a) State: (A) The deadline for submitting written comments; (B) That issues that may provide the basis for an appeal to the referee must be raised in writing prior to the expiration of the comment period; and (C) That issues must be raised with sufficient specificity to enable the local government to re- spond to the issue. (b) Set forth, by commonly used citation, the applicable criteria for the decision. (c) Set forth the street address or other easily understood geographical reference to the subject property. (d) State the place, date and time that comments are due. (e) State a time and place where copies of all evidence submitted by the applicant will be available for review. (f) Include the name and telephone number of a local government contact person. (g) Briefly summarize the local decision-making process for the [expedited] land division decision being made. (4) After notice under subsections (2) and (3) of this section, the local government shall: (a) Provide a 14-day period for submission of written comments prior to the decision. (b) Make a decision to approve or deny the application within 63 days of receiving a completed application, based on whether it satisfies the substantive requirements of the [local government's] applicable land use regulations. An approval may include conditions to ensure that the application meets the applicable land use regulations. For applications subject to this section, the local gov- ernment: (A) Shall not hold a hearing on the application; and (B) Shall issue a written determination of compliance or noncompliance with applicable land use regulations that includes a summary statement explaining the determination. The summary state- ment may be in any form reasonably intended to communicate the local government's basis for the determination. (c) Provide notice of the decision to the applicant and to those who received notice under sub- section (2) of this section within 63 days of the date of a completed application. The notice of deci- sion shall include: (A) The summary statement described in paragraph (b)(B) of this subsection; and Enrolled Senate Bill 458 (SB 458-A) Page 3 PP 19-0008 ATTACH 2/PAGE 3 OF 6 (B) An explanation of appeal rights under ORS 197.375. SECTION 7. ORS 197.370 is amended to read: 197.370. (1) Except as provided in subsection (2) of this section, if the local government does not make a decision on an expedited land division or a middle housing land division, as defined in section 2 of this 2021 Act, within 63 days after the application is deemed complete, the applicant may apply in the circuit court for the county in which the application was filed for a writ of mandamus to compel the local government to issue the approval. The writ shall be issued unless the local government shows that the approval would violate a substantive provision of the applicable land use regulations or the requirements of ORS 197.360 or section 2 of this 2021 Act. A decision of the circuit court under this section may be appealed only to the Court of Appeals. (2) After seven days' notice to the applicant, the governing body of the local government may, at a regularly scheduled public meeting, take action to extend the 63-day time period to a date certain for one or more applications for an expedited land division or a middle housing land di- vision prior to the expiration of the 63-day period, based on a determination that an unexpected or extraordinary increase in applications makes action within 63 days impracticable. In no case shall an extension be to a date more than 120 days after the application was deemed complete. Upon ap- proval of an extension, the provisions of ORS 197.360 to 197.380 and section 2 of this 2021 Act, including the mandamus remedy provided by subsection (1) of this section, shall remain applicable to the [expedited] land division, except that the extended period shall be substituted for the 63-day period wherever applicable. (3) The decision to approve or not approve an extension under subsection (2) of this section is not a land use decision or limited land use decision. SECTION 8. ORS 197.375 is amended to read: 197.375. (1) An appeal of a decision made under ORS 197.360 and 197.365 or under ORS 197.365 and section 2 of this 2021 Act shall be made as follows: (a) An appeal must be filed with the local government within 14 days of mailing of the notice of the decision under ORS 197.365 (4)[,] and shall be accompanied by a $300 deposit for costs. (b) A decision may be appealed by: (A) The applicant; or (B) Any person or organization who files written comments in the time period established under ORS 197.365. (c) An appeal shall be based solely on allegations: (A) Of violation of the substantive provisions of the applicable land use regulations; (B) Of unconstitutionality of the decision; (C) That the application is not eligible for review under ORS 197.360 to 197.380 or section 2 of this 2021 Act and should be reviewed as a land use decision or limited land use decision; or (D) That the parties' substantive rights have been substantially prejudiced by an error in pro- cedure by the local government. (2) The local government shall appoint a referee to decide the appeal of a decision made under [ORS 197.360 and 197.365] this section. The referee [shall] may not be an employee or official of the local government. However, a local government that has designated a hearings officer under ORS 215.406 or 227.165 may designate the hearings officer as the referee for appeals of a decision made under ORS 197.360 and 197.365. (3) Within seven days of being appointed to decide the appeal, the referee shall notify the ap- plicant, the local government, the appellant if other than the applicant, any person or organization entitled to notice under ORS 197.365 (2) that provided written comments to the local government and all providers of public facilities and services entitled to notice under ORS 197.365 (2) and advise them of the manner in which they may participate in the appeal. A person or organization that provided written comments to the local government but did not file an appeal under subsection (1) of this section may participate only with respect to the issues raised in the written comments sub- mitted by that person or organization. The referee may use any procedure for decision-making con- sistent with the interests of the parties to ensure a fair opportunity to present information and Enrolled Senate Bill 458 (SB 458-A) Page 4 PP 19-0008 ATTACH 2/PAGE 4 OF 6 argument. The referee shall provide the local government an opportunity to explain its decision, but is not limited to reviewing the local government decision and may consider information not pre- sented to the local government. (4)(a) The referee shall apply the substantive requirements of the [local government's] applicable land use regulations and ORS 197.360 or section 2 of this 2021 Act. If the referee determines that the application does not qualify as an expedited land division [as described in ORS 197.360] or a middle housing land division, as defined in section 2 of this 2021 Act, the referee shall remand the application for consideration as a land use decision or limited land use decision. In all other cases, the referee shall seek to identify means by which the application can satisfy the applicable requirements. (b) For an expedited land use division, the referee may not reduce the density of the land di- vision application. (c) The referee shall make a written decision approving or denying the application or approving it with conditions designed to ensure that the application satisfies the land use regulations, within 42 days of the filing of an appeal. The referee may not remand the application to the local govern- ment for any reason other than as set forth in this subsection. (5) Unless the governing body of the local government finds exigent circumstances, a referee who fails to issue a written decision within 42 days of the filing of an appeal shall receive no com- pensation for service as referee in the appeal. (6) Notwithstanding any other provision of law, the referee shall order the local government to refund the deposit for costs to an appellant who materially improves his or her position from the decision of the local government. The referee shall assess the cost of the appeal in excess of the deposit for costs, up to a maximum of $500, including the deposit paid under subsection (1) of this section, against an appellant who does not materially improve his or her position from the decision of the local government. The local government shall pay the portion of the costs of the appeal not assessed against the appellant. The costs of the appeal include the compensation paid the referee and costs incurred by the local government, but not the costs of other parties. (7) The Land Use Board of Appeals does not have jurisdiction to consider any decisions, aspects of decisions or actions made under ORS 197.360 to 197.380 or section 2 of this 2021 Act. (8) Any party to a proceeding before a referee under this section may seek judicial review of the referee's decision in the manner provided for review of final orders of the Land Use Board of Appeals under ORS 197.850 and 197.855. The Court of Appeals shall review decisions of the referee in the same manner as provided for review of final orders of the Land Use Board of Appeals in those statutes. However, notwithstanding ORS 197.850 (9) or any other provision of law, the court shall reverse or remand the decision only if the court finds: (a) That the decision does not concern an expedited land division as described in ORS 197.360 or middle housing land division as defined in section 2 of this 2021 Act and the appellant raised this issue in proceedings before the referee; (b) That there is a basis to vacate the decision as described in ORS 36.705 (1)(a) to (d), or a basis for modification or correction of an award as described in ORS 36.710; or (c) That the decision is unconstitutional. SECTION 9. ORS 197.380 is amended to read: 197.380. Each city and county shall establish [an application fee] application fees for an expe- dited land division and a middle housing land division, as defined in section 2 of this 2021 Act. The [fee shall] fees must be set at a level calculated to recover the estimated full cost of processing an application, including the cost of appeals to the referee under ORS 197.375, based on the estimated average cost of such applications. Within one year of establishing [the fee required] a fee under this section, the city or county shall review and revise the fee, if necessary, to reflect actual experience in processing applications under ORS 197.360 to 197.380 and section 2 of this 2021 Act. Enrolled Senate Bill 458 (SB 458-A) Page 5 PP 19-0008 ATTACH 2/PAGE 5 OF 6 Passed by Senate April 15, 2021 Received by Governor: M., ,2021 Lori L. Brocker, Secretary of Senate Approved: M., ,2021 Peter Courtney, President of Senate Passed by House May 17, 2021 Kate Brown, Governor Filed in Office of Secretary of State: M., ,2021 Tina Kotek, Speaker of House Shemia Fagan, Secretary of State Enrolled Senate Bill 458 (SB 458-A) Page 6 PP 19-0008 ATTACH 2/PAGE 6 OF 6 AGENDA ITEM 4 OREGON SEPTEMBER 23-24, 2021-LCDC MEETING ATTACHMENT 3 ATTACHMENT A ...oi Department of Land Conservation & Development Senate Bill 458 Guidance (Updated July 8, 2021) Background Senate Bill 458 was adopted by the Oregon Legislature in 2021. The bill is a follow-up to House Bill 2001 - the bill that legalizes middle housing in many cities throughout the state - and allows lot divisions for middle housing that enable them to be sold or owned individually. Senate Bill 458 Summary For any city or county subject to the requirements of House Bill 2001, Senate Bill 458 requires those jurisdictions to allow middle housing lot divisions for any HB 2001 middle housing type (duplexes, triplexes, quadplexes, townhouses, and cottage clusters) built in accordance with ORS 197.758. Senate Bill 458 only applies to middle housing land divisions permitted on or after June 30, 2022. The bill sets forth a series of parameters on how a city must process middle housing lot division applications. The city must apply an "expedited land division" process defined in ORS 197.360 through 197.380, and the applicant must submit a tentative plan for the division including the following: - A proposal for development of middle housing in compliance with the Oregon residential specialty code and applicable middle housing land use regulations, - Separate utilities for each dwelling unit, - Easements necessary for utilities, pedestrian access, common use areas or shared building elements, dedicated driveways/parking, and dedicated common area, - One dwelling unit per each resulting lot or parcel (except common areas), and - Demonstration that the buildings will meet the Oregon residential specialty code. Additionally, cities retain the ability to require or condition certain things, including further division limitations, street frontage improvements, and right-of-way dedication if the original parcel did not make such dedications. They may not subject applications to approval criteria outside of what is provided in the bill, including that a lot or parcel require driveways, vehicle access, parking, or min/max street frontage, or requirements inconsistent with House Bill 2001, including OAR Chapter 660, Division 046. Guidance DLCD staff have received a significant number of questions regarding Senate Bill 458 and how cities or counties can best prepare to comply with the law. Below are answers to commonly asked questions. If you find that you have a question that has not been addressed in this document, please reach out to the Housing Team at housinq.dlcd(@_dlcd.oregon.gov. SB 458 Deadline Question: This bill applies to middle housing lot divisions permitted on or after June 30, 2022. Will cities or counties need to incorporate these standards before this deadline? 7/8/2021 Department of Land Conservation and Development www.oregon.gov/lcd PP 19-0008 ATTACHMENT 3/PAGE 1 OF 5 OREGON ...olio% Department of Land Conservation & Development Answer: It is highly advisable, but not required, for cities or counties to incorporate middle housing lot division standards into their development codes. On the June 30, 2022 deadline, a city or county that has not incorporated lot division standards within their development codes would utilize the bill language directly to process middle housing lot divisions under SB 458. Question: Medium cities need to allow duplexes on lots/parcels that allow single-family detached dwellings by June 30, 2021 (i.e. this year). Are duplexes built between this deadline and the SB 458 deadline eligible for a middle housing lot division? Answer:A duplex built pursuant to ORS 197.758 (i.e. House Bill 2001) during this time period would be eligible to apply for a middle housing land division under SB 458 on June 30, 2022, provided it met the applicable requirements outlined in the bill. Question: Do cities or counties need to allow lot divisions for middle housing built prior to House Bill 2001? Answer: SB 458 requires a middle housing lot division application submit: "A proposal for development of middle housing in compliance with the Oregon residential specialty code and land use regulations applicable to the original lot or parcel allowed under ORS 197.758 (5)". This means that any lot division proposal will need to demonstrate compliance with both applicable building code and HB 2001 middle housing code in order to be eligible for a lot division under SB 458. There is a potential hypothetical scenario in which a pre-HB 2001 middle-housing type could make this demonstration, but 1.) this is an unlikely scenario and 2.) a jurisdiction retains the ability to require the applicant demonstrate the middle housing type complies with applicable building code and middle housing code before approving a middle housing lot division proposal. Applicability, Application Process, and Submittal Requirements Question: What middle housing types are eligible for division under SB 458? Answer: The bill specifies any lot or parcel that allows middle housing under ORS 197.758 (2) or(3) qualifies for a middle housing land division under SB 458. This includes duplexes, triplexes, quadplexes, townhouses, and cottage clusters in applicable cities and unincorporated, urban portions of Metro counties. Accessory dwelling units are not eligible for lot division under SB 458. Question: SB 458 requires cities or counties to apply the expedited land division process. What is this? Answer: The expedited land division process is outlined in ORS 197.360 to 197.380. It is an alternative procedure application intended to streamline the review of land divisions under state law. While typical land use applications must be completed within 120 days (ORS 227.178), an expedited land division must be processed within 63 days or extended by the governing body of a local jurisdiction (not to exceed 120 days). Question: The expedited land division process under ORS 197.360(1)(b) seems to only include divisions of three or fewer parcels. Does this mean that a middle housing land division is limited to three total parcels? 7/8/2021 Department of Land Conservation and Development www.oregon.gov/lcd PP 19-0008 ATTACHMENT 3/PAGE 2 OF 5 OREGON Department of Land Conservation & Development Answer: No. First, ORS 197.360(1)(a) allows an expedited land division to be any size, while ORS 197.360(1)(b) clarifies that the expedited land division process is also extended to divisions of three or fewer parcels. Additionally, SB 458 requires that local jurisdictions apply the expedited land division procedure outlined in ORS 197.360 to 197.380, a "middle housing land division"is distinct from an "expedited land division"and may contain more than three parcels, provided that each resultant lot or parcel contains one unit. Question: Can a city or county apply a typical land division process to a middle housing land division application? Answer: SB 458 specifies that a city or county "shall apply the procedures under ORS 197.360 to 197.380". This means that a city or county cannot require a middle housing land division to undergo a standard land division pathway. Question: This bill seems to suggest that the jurisdiction must approve an application for middle housing land division after or concurrent with the issuance of a building permit, which is backwards in comparison to typical subdivisions. Can you clarify when an applicant may submit an application for a middle housing lot division? Answer: Senate Bill 458 does not state that a middle housing land division must occur either before or after the issuance of a building permit. We anticipate that most middle housing land divisions will occur before the application for a building permit, similar to other housing land division processes. However, we also anticipate that there may be circumstances in which an applicant submits a land division application after developing a middle housing type. In both scenarios, the applicant must demonstrate that the proposal meets applicable building code and middle housing code as well as the requirements outlined in SB 458. Additionally, the bill specifies that a city or county may allow the submission of a middle housing land division at the same time as submission of an application for a building permit, but they are not required to. Lot Division Standards and Conditions for Approval Question: SB 458 sets out several requirements that applicants must demonstrate outlined in the summary above. What else are jurisdictions allowed to require or condition? Answer: The bill allows jurisdictions to require or condition the following: - Prohibition of further division of the resulting lots or parcels - Require notation in the final plat indicating approval was provided under SB 458 (later on, this will be the resultant ORS reference) - Require street frontage improvements where a lot or parcel abuts a street (consistent with House Bill 2001) - Require right-of-way dedication if the original parcel did not previously provide a dedication Question: Will jurisdictions be able to require applicants to submit tentative and final plats consistent with local platting standards? 7/8/2021 Department of Land Conservation and Development www.oregon.gov/lcd PP 19-0008 ATTACHMENT 3/PAGE 3 OF 5 OREGON ...mai Department of Land Conservation & Development Answer: Yes,jurisdictions may require that the applicant submit tentative and final plats in a manner consistent with their applicable platting standards. Question: Can jurisdictions require that easements be submitted in a form approved by the City Attorney and address specific issues like maintenance and repair, cost-sharing, access, notice, damage, disputes, etc.? Answer: Yes, cities are permitted to specify the format and issues an easement addresses, provided that they are specific to the types of easements specified in Section 2(2)(c) of the bill, including: A. Locating, accessing, replacing and servicing all utilities; B. Pedestrian access from each dwelling unit to a private or public road; C. Any common use areas or shared building elements; D. Any dedicated driveways or parking; and E. Any dedicated common area; Question: What requirements are jurisdictions limited in requiring for a middle housing lot division? Answer: The bill specifies that a jurisdiction may not subject a middle housing lot division application to approval criteria except as provided in Section 2 of the bill. The bill specifies that this includes the following: - Require that a lot or parcel provide driveways, vehicle access, parking or minimum or maximum street frontage - Subject an application to procedures, ordinances or regulations adopted under ORS 92.044 or 92.046 that are inconsistent with Section 2 of the bill or ORS 197.360 to 197.380. Question: Does that mean jurisdictions cannot require off-street parking for middle housing? Answer: Jurisdictions are still permitted to require off-street parking and all other land use regulations in accordance with the parameters set forth in administrative rule, OAR Chapter 660, Division 046, but they may not require that each resultant lot or parcel have off-street parking. Such a lot or parcel would be provided access to off-street parking via easement. Question: Cities or counties cannot require street frontage under SB 458, but can they limit how many lots within a land division do not have street frontage? For example, could a city limit the number of cottages in a cottage cluster development that only have street access from an access easement? Answer: The bill states that a city or county "may not subject an application to approval criteria except as provided in this section". The restriction on minimum or maximum frontage is an explicit example of this prohibition. Because there is nothing in this section specifying the number of units that may only have street access from an access easement, a local jurisdiction would not be able to include such a limitation as a standard or condition of approval. 7/8/2021 Department of Land Conservation and Development www.oregon.gov/lcd PP 19-0008 ATTACHMENT 3/PAGE 4 OF 5 OREGON ...mai Department of Land Conservation & Development Question: Section 2 (4)(b) allows cities or counties to require street frontage improvements. Would this enable them to require frontage improvements that might otherwise be exempted for single-family detached dwellings, which is prohibited in OAR Chapter 660, Division 046? Answer: Yes. This provision would enable a city to require street frontage improvements in situations where it might not otherwise be permitted under administrative rule. We also think this can be a compelling incentive to better address the street frontage deficiencies that persist today in older single-family neighborhoods. Question: Does SB 458 require local jurisdictions to approve vertical divisions (i.e. divisions in which one or more units of middle housing is not on the ground floor) of middle housing in addition to horizontal divisions? Answer: Senate Bill 458 does not speak to vertical divisions of middle housing and requires that each resultant lot or parcel contain exactly one unit. Therefore, cities are not required to allow vertical divisions of middle housing. Townhouses Question: Does SB 458 apply to lot divisions for townhouses allowed under HB 2001? Answer: The bill applies to any lot or parcel that allows middle housing under ORS 197.758, including townhouses. Local jurisdictions must allow townhouse proposals to undergo the lot division process outlined in SB 458, including the application of the procedures outlined in ORS 197.360 through 197.380. Question: The bill restricts cities or counties from applying minimum or maximum frontage requirements to lots or parcels created under SB 458. This seems to conflict with OAR 660-046- 0220(3)(b) regarding minimum street frontages applied to townhouses. Are jurisdictions permitted to apply minimum street frontages to townhouses? Answer: Yes, SB 458 specifies that in order for a middle housing proposal to be eligible for a land division, it must comply with all of the land use regulations applicable to the original lot or parcel allowed under ORS 197.758 (5), which includes the full scope of administrative rules outlined in OAR Chapter 660, Division 046. Therefore, local governments are able to, but are not required to, apply minimum street frontages to townhouses as permitted in OAR 660-046-0220(3)(b). Local governments will not be able to apply minimum street frontage requirements for individual units for plexes and cottage clusters. However, they may apply lot dimensional standards to the parent lot as provided in OAR 660-046-0220. We recommend that local jurisdictions carefully consider the incentives and resulting form for each middle housing type when developing middle housing land use regulations. 7/8/2021 Department of Land Conservation and Development www.oregon.gov/lcd PP 19-0008 ATTACHMENT 3/PAGE 5 OF 5 ATTACHMENT 4 House Bill 2001— Phase Two Project Timeline 2021 2022 May June July August September October November December January February March April May June Scoping and Chartering Middle Housing Concept Development CC-PC AC(x6) PC-WS(x2) Code Development Community Forum PC-WS(x2) CC appoints AC PC-CC Code Refinement PC-WS(x2) Public Hearings and CC check-in Adoption Community Forum DLCD Notice Public Review Draft PC-PH (x2) CC-PH (x2) Adoption and findings PC-WS Planning Commission Work Session CC-PC City Council-Planning Commission Joint Study Session CC City Council meeting AC Advisory Committee PC-PH Planning Commission Public Hearing CC-PH City Council Public Hearing PP 19-0008 ATTACHMENT 4/PAGE 1 OF 1