HomeMy WebLinkAboutAgenda Item - 2024-09-09 - Number 07.1 - Staff Report 07-31-24 PCPH w-Exh (LU 24-0024) STAFF REPORT
CITY OF LAKE OSWEGO
PLANNING AND BUILDING SERVICES DEPARTMENT
APPLICANT FILE NO.
City of Lake Oswego LU 24-0024, Resolution 24-36
LOCATION STAFF
Citywide Erik Olson, Long Range Planning Manager
DATE OF REPORT PLANNING COMMISSION HEARING DATE
July 31, 2024 September 9, 2024
I. APPLICANT'S REQUEST
The City of Lake Oswego is proposing to adopt a Housing Production Strategy (HPS) to meet
the requirements of Oregon House Bill 2003 (2019) and OAR 660-08-0050.
II. APPLICABLE REGULATIONS
A. City of Lake Oswego Comprehensive Plan
Complete Neighborhoods & Housing
Policy B-1
Urbanization
Policy A-1
Palisades Neighborhood Plan
Land Use Policy 4
B. Oregon Statewide Planning Goals
Goal 2: Land Use
Goal 3: Economic Development
Goal 10: Housing
Goal 14: Urbanization
Respect. txcel.erce. Trust. Service.
503-635-0290 380 A AVENUE PO BOX 369 LAKE OSWEGO, OR 97034 WWW.LAKEOSWEGO.CITY
C. Interpretation of Goal 10: Housing (OAR Chapter 660, Division 8)
OAR 660-008-0050 Housing Production Strategy Report Structure
OAR 660-008-0050 (1) Contextualized Housing Need
OAR 660-008-0050 (2) Engagement
OAR 660-008-0050 (3) Strategies to Meet Future Housing Need
OAR 660-008-0050 (4) Achieving Fair and Equitable Housing Outcomes
OAR 660-008-0050 (5) Housing Production Strategy Report
D. ORS Chapter 197 - Comprehensive Land Use Planning
ORS 197.296 Analysis of housing capacity and needed housing by
Metro, cities outside of Metro, and smaller cities
E. City of Lake Oswego Community Development Code'
LOC 50.07.003.3.c Notice of Public Hearing
LOC 50.07.003.4 Hearings before a Hearings Body
LOC 50.07.003.16.a Legislative Decision Defined (Quasi-judicial Comp. Plan Map,
Zone Map, and CDC Amendments to be processed via Major
Developments Procedures)
LOC 50.07.003.16.c Required Notice to DLCD
LOC 50.07.003.16.d Planning Commission Recommendation Required
LOC 50.07.003.16.e City Council Review and Decision
F. Metro Urban Growth Management Functional Plan [Metro Code 3.071
Title 1: Housing Capacity [Metro Code 3.07.110 - .120]]
Title 7: Housing Choice [Metro Code 3.07.710- .740]]
Title 8: Compliance Procedures [Metro Code 3.07.810- .870]]
III. BACKGROUND AND DISCUSSION
Per House Bill 2003 (HB 2003) (2019) and HB 3155 (2021), now codified as ORS 197A.100 and
197A.335(1), the City must adopt a Housing Production Strategy (HPS) that includes a list of
specific actions that the City will undertake to promote development to address the housing
needs identified in its Housing Needs Analysis (HNA). The City Council adopted the 2023 HNA on
October 17, 2023. Per ORS 197A.100(1), the City must develop and adopt an HPS no later than one
year after the deadline for completing the HNA; as such, the City is required to adopt an HPS no
later than December 31, 2024.
The City Council first prioritized this work as part of their 2022 goals and initiatives, which included
continuing the multi-year work plan to complete work on key housing initiatives— including HB
2003 compliance. Subsequently, the City contracted with consultant MIG and subconsultant
1 These sections of the Lake Oswego Code are not technically applicable because approval by resolution of the
Housing Production Strategy is not a "major development" per LOC 50.07.003.15.a.ii(3)and LOC 50.07.003.16.a.i.
However,the public hearing and adoption procedure will be followed to assure that all interested parties have an
opportunity to present testimony prior to formalization of the Council's decision by resolution.
Planning Commission Public Hearing Page 2 of 15 LU 24-0024
September 9,2024
Johnson Economics (collectively "consultant team") to assist with this work in Fall 2022. City staff
and the consultant team conducted outreach and community engagement related to the 2023
HNA from December 2022 through July 2023, with outreach for the HPS occurring directly after
from October 2023 through July 2024.
Engagement related to the HPS occurred through several avenues and public events, including an
Online Open House survey, a "Community Forum" event, five Planning Commission meetings, two
City Council study sessions, one joint meeting with both the Planning Commission and Council,
and five meetings of the City-appointed Ad-Hoc Housing Production Strategy Task Force ("Task
Force") per Resolution 22-30, charged with providing high-level policy guidance to the Planning
Commission and City Council on their efforts to comply with HB 2003. These events helped to
identify initial recommendations for strategies to include in the City's HPS, with later drafts of the
HPS directly informed by direction provided by the Task Force, the Commission, and City Council.
The HPS is to comply with LCDC Goal 10, Housing's goal to provide for the housing needs of
citizens of the state by encouraging the availability of adequate numbers of needed housing units
at price ranges and rent levels which are commensurate with the financial capabilities of Oregon
households. The HPS serves the primary purpose of outlining a range of strategies the City plans to
address the housing needs identified in the HNA, and outlines actionable policies, actions, and
implementation steps to encourage the production of such housing.
Housing Production Strategy
Per ORS 197A.100, an HPS must document the specific tools, actions, and policies that the City
plans to take to address the housing need identified in the 2023 HNA. This also includes the City's
plan and timeline for adopting and implementing each strategy. The Oregon Department of Land
Conservation and Development (DLCD) will review and approve the HPS based on (1) the
adequacy of strategies to meet all identified housing needs, (2) the appropriateness of strategies
to facilitate the production of needed housing, and (3) how well the strategies, taken as a whole,
will achieve fair and equitable housing outcomes [OAR 660-008-0055(6,7)].
The HPS focuses on how to fill the gap between the City's housing need and supply, particularly
housing available to low- and moderate-income households and low-cost rental housing. The
following basic components are required by OAR 660-008-0050 (1—4 and 5(c)) and this
organization is typical of those that have been adopted in other communities to date:
• Contextualized Housing Needs Assessment;
• Community Engagement Process, including explanation of how the process was used to
identify, evaluate and prioritize strategies;
• Strategies to Meet Future Housing Need, including descriptions of the timeline,
responsibilities, actions, and affected households, e.g., benefits and barriers to specific
underserved or vulnerable populations;
• How the City will achieve Fair and Equitable Housing Outcomes; and
• Process for monitoring progress in meeting identified outcomes.
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Going forward, the City will be required in three years to reflect and evaluate the progress and
effectiveness of the HPS at a mid-term checkpoint to see what strategies worked, which ones did
not, and discuss any course corrections being made to ensure all housing needs are addressed
[OAR 660-008-0060(1)].
House Bill 2003
In 2019, the Oregon Legislature passed House Bill 2003, which aimed to help communities meet
the housing needs of Oregonians. The law required all Oregon cities of more than 10,000 residents
to study the future housing needs of their residents (through an HNA) [ORS 197A.335 and OAR
660-008-0045] and to develop strategies that encourage the production of the identified housing
needs (through an HPS) [ORS 197A.100]. In November 2020, DLCD adopted implementing rules for
HB 2003, which are contained, in part, in OAR 660-008-0045 through -0070. These rules
established criteria for compliance, including the components that are required to be included
within an HPS Report.
The 2023 HNA was adopted by the City Council on October 17, 2023 (LU 23-0023). The City is now
required by ORS 197A.100 to adopt an HPS prior to December 31, 2024. The 2023 HNA found that,
despite a very low assumed growth rate over the 20-year planning horizon, the City has a need for
nearly 2,000 new housing units, including over 1,100 multi-family and middle housing units.
According to the HNA, about half of those units are needed to meet upper income ranges (greater
than 120% of the Area Median Income, or AMI), while the remaining half are needed to meet very
low to middle income household needs.
Housing Production Strategy Task Force
On October 4, 2022, the City Council adopted Resolution 22-30 creating the Task Force and
appointing its members.2 The Task Force is comprised of individuals from a diverse range of
backgrounds, identities, income ranges, and professions, with representation from elected and
appointed officials, members of City boards and commissions, a DLCD representative, housing
producers, and housing consumers within Lake Oswego.
The goal of the Task Force is to represent a wide range of experiences and ideas related to
housing, and to develop recommendations addressing those perspectives. The role of the Task
Force is to provide guidance to staff and the Planning Commission by reviewing draft materials,
providing feedback related to their personal or professional experience and opinions, and
informing the broader public about this process through their individual networks. The Task Force
may also recommend outreach strategies, Comprehensive Plan amendments, or other actions to
update the City's HNA and develop an HPS, consistent with adopted goals and initiatives related to
housing.
The Task Force was originally charged with meeting a minimum of five times from December 2022
through late 2024 in order to develop these policy recommendations. The Task Force ultimately
2 Subsequently, City Council adopted Resolution 23-06 on February 7,2023,to add an official liaison from the
Diversity, Equity,and Inclusion Board to the Task Force,and Resolution 23-29 on June 20,2023,to add a liaison
from DLCD to the Task Force.
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held eight meetings in total, including three meetings to develop recommendations related to the
2023 HNA, and five meetings to develop recommendations for the HPS:
• On October 6, 2023, the Task Force held their fourth meeting to evaluate policies and
other housing production measures already being implemented by the City, review new
data related to underserved or vulnerable populations, review the highlights of
stakeholder interviews on barriers to housing production, and provide input on an initial
menu of housing production strategies;
• On December 8, 2023, the Task Force held their fifth meeting to review recent input
regarding the initial list of housing production strategies, review the major housing needs
identified in the 2023 HNA, agree upon project goals, and engage in group discussions
focused on identifying housing production strategies that could best address the identified
housing needs;
• On February 16, 2024, and on March 1, 2024, the Task Force held their sixth and seventh
meetings, respectively, to review and engage in group discussions focused on the Initial
Housing Production Strategy Recommendations Memo in order to develop a preferred list
of strategies for the Planning Commission and City Council to consider for inclusion in the
City's HPS;
• On June 21, 2024, the Task Force held their eighth meeting to review the results of recent
public engagement related to the initial strategy recommendations, and finalize their
recommendations on the Draft HPS Report.
Other Public Engagement
In addition to the work of the Task Force, City staff and the consultant team offered opportunities
for public engagement and comment through the following events:
• On October 9, 2023, the Planning Commission hosted a tour of the Mercy Greenbrae
Affordable Housing project to learn more about the development in order to inform the
City's work to develop an HPS;
• On November 7, 2023, a study session was held at City Council to provide initial direction
to staff regarding which strategies the Task Force should analyze in more detail;
• On November 13, 2023, a work session was held at the Planning Commission to review
requirements related to the HPS, a summary of existing City policies, and the highlights of
recent stakeholder interviews on barriers to housing production, and to provide direction
to staff regarding which strategies the Task Force should analyze in more detail;
• On November 16, 2023, staff presented at a Mayor's Roundtable event to provide an
overview of the housing needs identified in the 2023 HNA and to provide an update on the
City's work to develop an HPS;
• On November 21, 2023, staff presented at a meeting of the Diversity, Equity, and Inclusion
Advisory Board to provide an overview of the housing needs identified in the 2023 HNA
and to provide an update on the City's work to develop an HPS;
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• On December 14, 2023, staff presented at a meeting of the Chamber of Commerce
Government Affairs Committee to provide an overview of the housing needs identified in
the 2023 HNA and to provide an update on the City's work to develop an HPS;
• On January 8, 2024, an update was provided to the Planning Commission on recent Task
Force meetings and other progress related to the City's work to develop an HPS;
• On February 23, staff presented at a meeting of the 50+Advisory Board to provide an
overview of the housing needs identified in the 2023 HNA and to provide an update on the
City's work to develop an HPS;
• On March 13, the City opened an Online Open House survey and allowed for public input
through March 31 to receive public input on an initial set of strategies recommended for
inclusion in the City's HPS;
• On March 14, the City held a virtual "Community Forum" to provide information and
receive public input on an initial set of strategies recommended for inclusion in the City's
HPS;
• On April 2, the City Council and Planning Commission conducted a joint study session to
provide further direction regarding which strategies to include as a part of the City's Draft
HPS;
• On June 16, staff presented at a meeting of the Chamber of Commerce Government Affairs
Committee to provide information and receive input on an initial set of strategies
recommended for inclusion in the City's HPS;
• On June 24, the Planning Commission conducted a work session to review and provide
input on the Draft HPS prior to the public hearings; and
• On July 16, a study session was held at City Council review and provide input on the Draft
HPS prior to the public hearings.
Staff and the consultant team have revised the draft HPS based on public input and the direction
provided by the Commission and City Council. See Revisions to Draft HPS, below.
Housing Production Strategy Report Summary
The HPS Report identifies strategies and actions that the City of Lake Oswego and community
partners can take to promote housing development that meets the needs of the community. The
HPS Report includes information about the City's critical housing needs and summarizes public
engagement activities that informed and shaped the housing strategies recommended for
implementation. Additionally, the HPS Report summarizes how the strategies will help achieve fair
and equitable housing outcomes for the Lake Oswego community—especially for low-income
households, communities of color, people with disabilities, and other state and federal protected
classes. The HPS also describes how the City of Lake Oswego will monitor the implementation and
progress of the strategies recommended in the HPS.
All strategies recommended in the HPS report were supported by the Task Force, City Council, and
Planning Commission. The strategies are organized by the primary housing need that they
address, as summarized below:
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• Overall Housing Production and Supply— Increase housing production to meet the City's
overall long-term housing need.
• Increased Housing Choices— Enable and encourage production of housing that can meet a
full range of household needs and preferences. This includes a wider variety of housing
types and sizes, and housing to meet particular needs such as aging in place and
accessibility.
• Affordable Housing for Lower-Income Households— Facilitate development of
government-subsidized housing that meets the needs of low- and moderate-income
households.
• Other—The strategy in this category (Fair Housing policy and education) does not easily fit
under the other headings, but supports equitable implementation of all recommended
housing strategies.
Strategies were categorized using Near Term (1-3 years), Medium Term (within 3-5 years), and
Longer Term (>5 years) implementation time frames. Table 1, below, shows each recommended
strategy with their associated time frames, relative cost, and level of effort:
Table 1:Summary of Strategies and Implementation
Implementation Time Frame
Strategy Begin Complete Cost Effort
Overall Housing Production and Supply
1. Code audit and amendments Near Term Medium Term $$ • • •
Remove or reduce minimum parking
2. Near Term Near Term $ •
requirements
3. Rezone land Near Term Medium Term $$ • • •
Increased Housing Choices
Evaluate accessible design incentives or
4. Longer Term Longer Term $$ • •
mandates
Evaluate Multiple Unit Property Tax
5. Longer Term Longer Term $$ • •
Exemption
6. Pre-approved plan sets for ADUs Longer Term Longer Term $$$ • • •
Modify System Development Charge fee 7. schedule Near Term Medium Term $$$ • • •
Affordable Housing for Lower-Income Households
8. Nonprofit Low-Income Housing Exemption Already Complete $$$$ • o o
9. Low-Income Rental Housing Tax Exemption Near Term Near Term $$$$ • • o
Public-private partnerships for affordable
10. housing Near Term Ongoing $$SS • • •
Use Tax Increment Financing to support • • •
11. affordable housing development Near Term Longer Term $$$$
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12. Affordable housing preservation inventory Medium Term Medium Term $ • •
Other
13. Fair Housing policy and education Near Term Medium Term $ • •
Table 2, below, outlines a proposed general implementation timeline for each strategy:
Table 2:Implementation Timeline
2024 2025 2026 2027 2028 2029 2030
1. Code audit and amendments
2. Remove or reduce min. Parking requirements
3. Rezone land* Non-Residential Low-Density Res.
4.
Evaluate accessible design incentives or
mandates
5. Evaluate Multiple Unit Property Tax Exemption
6. Pre-approved plan sets for ADUs
Cottage SDC Methodology
7. Modify SDC fee schedule* Cluster
8. Nonprofit Low-Income Housing Exemption
9. Low-Income Rental Housing Tax Exemption
Public-private partnerships for affordable Ongoing
10.
housing
11. Use TIF to support affordable housing
12. Affordable housing preservation inventory
13. Fair Housing policy and education* Policy Update Education
Revisions to Draft HPS
Following the release of initial draft of the HPS, and in response to the comments received during
public engagement events, as well as direction from the Task Force, Commission and City Council,
the current version of the draft document is revised to include changes primarily relating to the
timing and implementation of the strategies in the HPS:
• Moving the Rezoning strategy up from a Medium-Term strategy to a Near-Term strategy,
and phasing the strategy to address residential capacity in commercial and industrial areas
first (and other rezoning opportunities later);
• Moving the Affordable Housing Preservation Inventory strategy back to 2027;
• Moving the Modify SDC Fee Schedule strategy up from a Long-Term strategy to a Medium-
Term strategy;
• Moving the Pre-Approved Plan Sets for ADUs strategy back to 2029-2030;
• Moving the Evaluate Accessible Design Incentives or Mandates strategy back from a
Medium-Term strategy to a Long-Term strategy; and
• Moving the Evaluate Multiple Unit Property Tax Exemption (MUPTE) strategy back from a
Medium-Term strategy to a Long-Term strategy, and consider applying MUPTE to the
preservation of existing affordable housing units.
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At their Study Session on July 16, the City Council also provided direction to move the Fair Housing
Policy and Education strategy back from a Near-Term strategy to a Medium-Term strategy. Staff
notes that the Fair Housing Policy and Education strategy is intended to be implemented
continuously, and can add value to future City actions regarding housing production by serving as
a policy lens for decision-makers. The City is also legally obligated to implement federal Fair
Housing requirements. As an alternative, staff has proposed bringing forward amendments to add
a Fair Housing policy to the Comprehensive Plan in the near-term, potentially bundled along with
the 2024 annual code amendments, while pursuing educational outreach related to fair housing
policy in the medium-term.
IV. NOTICE OF APPLICATION
A. Newspaper Notice
On August 28, 2024, public notice of the proposed Comprehensive Plan
amendments and Planning Commission public hearing will be published in the Lake
Oswego Review.
B. DLCD and Metro Notices
Pursuant to ORS 197.610 and LOC 50.003.07.16.c, staff has provided notice of the
proposed HPS document to the Oregon Department of Land Conservation and
Development (DLCD). (Staff incorporated DLCD-suggested edits into the finalized
HPS Report.) Staff notified Metro as required by Metro Code 3.07.820(a).
V. COMPLIANCE WITH APPROVAL CRITERIA
A. CITY OF LAKE OSWEGO COMMUNITY DEVELOPMENT CODE
Notices will be published in the Lake Oswego Review in advance of both the Planning
Commission and City Council hearings. Public comment may be submitted before or during the
forthcoming Planning Commission hearing and City Council hearing. All those who submit
comment on the proposed amendment receive a notice of decision. Notice of the Planning
Commission public hearing has been given to DLCD in the manner provided by LOC
50.07.003.16.c. [Note: Per ORS 197A.103(1), the HPS will be submitted to DLCD within 20 days
following adoption.]
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Classification of Amendments as a Legislative Decision
The "legislative decision" process per LOC 50.07.003.16.a3 for adoption of Resolution 24-36 will
be followed for the adoption of the HPS as a supporting document to the Comprehensive Plan:
A legislative decision is generally a policy decision which is up to the discretion of the City
Council, but shall:
i. Comply with any applicable state law;
H. Comply with any applicable statewide planning goal or administrative rule
adopted pursuant to ORS Chapter 197. and
iii. In the case of a legislative amendment to this Community Development Code,
comply with any applicable provision of the Lake Oswego Comprehensive Plan.
B. CITY OF LAKE OSWEGO COMPREHENSIVE PLAN
Staff has identified the following Comprehensive Plan Policies applicable to this proposal.
Following each policy or group of policies is a response:
Complete Neighborhoods and Housing- Housing Choice and Affordability:
Policy B-1: Provide and maintain zoning and development regulations that allow the
opportunity to develop an adequate supply and variety of housing types, and that
accommodate the needs of existing and future Lake Oswego residents.
Findings: The proposed HPS was specifically developed to increase opportunities to develop
an adequate supply and variety of housing types that accommodate the needs of existing
and future Lake Oswego residents as established in the 2023 HNA. The proposed HPS
establishes an action plan for the City to increase its housing supply over a 20-year time
period though the development of the types of housing that meet the city's current and
future housing needs. Upon implementation, the strategies in the HPS will offer more
opportunities for increased housing supply and the development of a variety of housing
types. This policy is met.
Urbanization
Policy A-1: The City will not expand the existing Urban Service Boundary* (USB) and will resist
efforts to require expansion, except in those areas designated Tier 1 Urban Reserves as of
February 1998, or where properties are needed for the development of public parks and
recreation facilities.
3 LOC 50.07.003.16.a.i: "A'legislative decision' is an amendment to the policies, procedures,standards,criteria or
map designations of the Comprehensive Plan." Although adoption of the HPS is not an amendment to the
Comprehensive Plan policies, it could serve as the basis for that. In addition,the adoption of the HNA as part of
the Comprehensive Plan is not a quasi-judicial decision,which is the only other type of classification of land use
decisions.
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Findings: The proposed HPS does not include strategies that would expand the City's USB. All
strategies included in the proposed HPS are intended to promote the development of the
types of housing that meet the city's current and future housing needs within the City's
existing USB. This policy is met.
Palisades Neighborhood Plan
Land Use Policy 4: Provide for residents varied housing needs while ensuring the detached
single-family character and scale of the Palisades neighborhood is not diminished.
a) Be sensitive to a range of households'needs including families with school-age
children, working couples and singles, seniors, people caring for aging parents and
spouses, and people with disabilities.
///
Findings: The strategies in the proposed HPS are explicitly intended to provide for residents
varied housing needs. Strategy 4: Evaluate Accessible Deign Incentives or Mandates is
specifically intended to increase the development of housing for seniors and people with
physical disabilities and mobility challenges. Numerous strategies in the proposed HPS would
increase the likelihood of development that meets a full range of household needs and
preferences, including increasing opportunities for intergenerational living. Strategies
proposed in the HPS will not alter the detached single-family character and scale of the
Palisades neighborhood because all dwellings will still be required to meet the same bulk
and mass limitations that are imposed on single family dwellings. The strategies proposed in
the HPS are intended to address housing needs throughout the city, and any increase in
housing demand that occurs as a result of these strategies will have a negligible impact on
the mix of housing types in Palisades. This policy is met.
C. OREGON STATEWIDE PLANNING GOALS
Amendments to the Lake Oswego Comprehensive Plan must comply with Oregon's Statewide
Planning Goals and Guidelines (OAR Chapter 660 Division 15) when amending the
Comprehensive Plan policies (which the HPS does not), and must also comply with the existing
Comprehensive Plan policies.
Goal 2: Land Use—The City of Lake Oswego has a state-acknowledged
Comprehensive Plan. Section B of this report describes findings and
conclusions that the proposed HPS is consistent with applicable procedures
and applicable goals and policies of the City's Comprehensive Plan.
Goal 9: Economic Development-The proposal is designed to help increase housing
stability for Lake Oswego residents, including those who work within the city.
Stable housing is vital to workforce staffing and retention; therefore, policies
which support production and retention of housing that is affordable to a
wider range of incomes will support Lake Oswego's workforce and increase
business recruitment competitiveness. The policies in the proposal also foster
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residential development, which is a part of the local economy. Proposed
policies addressing barriers to such development support that sector.
Goal 10: Housing—The proposed HPS was developed in compliance with statewide
planning policies that govern planning for housing and residential
development, including Goal 10 (Housing), OAR 660 Division 7 (Metropolitan
Housing), and OAR 660 Division 8 (Interpretation of Goal 10 Housing). The
HPS is being proposed to reflect the findings of the City's 2023 HNA and
community values and priorities that were heard during the HPS project
outreach. Additional findings regarding Housing can be found in Section B of
this report.
Goal 14: Urbanization - Strategies proposed in the HPS encourage density and are
expected to result in more compact forms of development, which require less
infrastructure and land, reducing the pressure on urban growth boundaries.
Conclusion: The proposed HPS is consistent with all applicable Oregon Statewide Planning
Goals. For the reasons stated above, the proposed HPS is established on a factual basis, is
consistent with existing City policies, and has been sufficiently coordinated with needed
housing in the Metro region, in accordance with OAR 660-008-030(1).
D. METRO CODE
Metro Urban Growth Management Functional Plan, Title 1: Housing Capacity[Metro Code
3.07.110-.120]
Section 3.07.110 of this section states that "The Regional Framework Plan calls for a
compact urban form and a "fair-share" approach to meeting regional housing needs. It is
the purpose of Title 1 to accomplish these policies by requiring each city and county to
maintain or increase its housing capacity except as provided in section 3.07.120."
Findings: The City of Lake Oswego currently has a deficit of residentially zoned lands. The
2023 HNA identified a need for additional residential land in a range of zones over the 20-
year planning period, with a projected deficit of 642 units. The proposed HPS does not
change the zoned capacity of residential lands, but it does establish an action plan for the
City to increase its housing capacity over a 20-year time period. The strategies proposed in
the HPS are intended to remedy this deficit, and the City will be required to monitor
housing production outcomes and provide reports to DLCD on a regular basis to ensure that
the proposed strategies are resulting in sufficient housing production.
Metro Urban Growth Management Functional Plan, Title 7: Housing Choice[Metro Code
3.07.710-.740]
Title 7 of Metro's Urban Growth Management Functional Plan is designed to ensure the
production of affordable housing in the Metro UGB. Each city and county within the Metro
region is encouraged to voluntarily adopt an affordable housing production goal and is
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required to ensure that their comprehensive plans and implementing ordinances include
strategies to:
• Ensure the production of a diverse range of housing types;
• Maintain the existing supply of affordable housing, increase opportunities for new
affordable housing dispersed throughout their boundaries; and
• Increase opportunities for households of all income levels to live in affordable
housing (3.07.730).
Findings: These requirements are intended to ensure that Lake Oswego's implementing
ordinances include strategies to ensure the production of a diverse range of housing types
and increase opportunities for new affordable housing dispersed throughout the City. The
HPS furthers the City's compliance with Title 7 by serving as an action plan for the
implementation of strategies that promote the development of needed housing. This work
will lay the foundation for future actions and implementation measures aimed at increasing
opportunities for households of all income levels to live within Lake Oswego in affordable
housing.
Metro Urban Growth Management Functional Plan, Title 8: Compliance Procedures[Metro
Code 3.07.810-.870]
Section 3.07.820 of this title requires that at least 35 days prior to the first evidentiary
hearing on an amendment to a comprehensive plan, or land use regulation, that the City
submit the proposed amendments to Metro. Metro may review the amendments and can
request that the City provide an analysis of compliance with the Functional Plan.
Findings: The City submitted the proposed amendments to Metro on August 5, 2024, which
was 35 days prior to the first evidentiary hearing of September 9, 2024.
Conclusion: The proposed HPS does not alter current housing capacity, and will increase the
likelihood that development of needed housing will occur and work towards addressing any
deficiencies in land capacity necessary to meet the housing needs identified in the 2023
HNA. The proposal is consistent with Title 1 Housing Capacity. The proposal is also
consistent with Title 7 Housing Choice and Title 8 Compliance Procedures as described in
the findings herein.
E. ORS CHAPTER 197A- LAND USE PLANNING: HOUSING AND URBANIZATION
ORS 197A.335—Determination of housing capacity and accommodation of needed housing
by Metro cities
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(2) The housing capacity determination and the needed housing analysis conducted
under this section must be adopted as part of the city's comprehensive plan no later
than one year after completion of the needed housing analysis.
(3) If the housing capacity and needed housing analysis conducted under this section
demonstrates a housing need, the city shall amend its comprehensive plan or land
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use regulations or take actions to update or implement its housing production
strategy to include new measures that demonstrably increase the likelihood that
development of needed housing will occur for the type, mix, affordability and
densities sufficient to accommodate needed housing for the next 20 years.
Conclusion: The proposed HPS includes several new measures that demonstrably increase
the likelihood that development of needed housing will occur for the type, mix, affordability
and densities sufficient to accommodate needed housing for the next 20 years. The HPS was
prepared based upon these criteria and complies, as discussed within the HPS.
VI. RECOMMENDATION
Based on the information presented in this report, staff recommends approval of the
HPS as a part of the Lake Oswego Comprehensive Plan.
EXHIBITS
A. Draft Resolution
A-1 Resolution 24-36, draft July 31, 2024
Attachment 1: Reserved for City Council Findings (not included)
Attachment 2: Housing Production Strategy Report, draft July 31, 2024
B. Findings, Conclusions and Order [No current exhibits; reserved for hearing use]
C. Minutes [No current exhibits; reserved for hearing use]
D. Staff Reports
D-1 Staff Memo, dated September 27, 2023, for the Planning Commission meeting
on October 9, 2023
D-2 Staff Memo, dated November 3, 2023, for the Planning Commission Work
Session on November 13, 2023
D-3 Staff Memo, dated December 27, 2023, for Planning Commission meeting on
January 8, 2024
D-4 Staff Memo, dated March 21, 2024, for the joint Planning Commission-City
Council Study Session on April 2, 2024
D-5 Staff Memo, dated June 12, 2024, for the Planning Commission Work Session on
June 24, 2024
E. Graphics/Plans [No current exhibits; reserved for hearing use]
F. Written Materials [No current exhibits; reserved for hearing use]
G. Letters [No current exhibits; reserved for hearing use]
Planning Commission Public Hearing Page 14 of 15 LU 24-0024
September 9,2024
Staff reports and public meeting materials that were prepared for these Comprehensive Plan
amendments can be found by visiting the project web page for LU 24-0024. Use the link below to
visit the City's "Project" page.
https://www.ci.oswego.or.us/all-projects
(Under "Search" enter LU 24-0024, then press "Enter")
Planning Commission Public Hearing Page 15 of 15 LU 24-0024
September 9,2024
RESOLUTION 24-36
A RESOLUTION OF THE LAKE OSWEGO CITY COUNCIL ADOPTING A
HOUSING PRODUCTION STRATEGY(LU 24-0024)
WHEREAS, pursuant to ORS 197A.335, cities with a population greater than 10,000 are required
to prepare and adopt a Housing Capacity Analysis (HCA) that includes a housing needs
projection addressing housing types and price levels, residential land needs analysis, buildable
land needs analysis, and identification of measures for accommodating needed housing per
Oregon Administrative Rule (OAR) Chapter 660, Divisions 7 and 8; and
WHEREAS, the City Council adopted an HCA as a part of the City's Comprehensive Plan on
October 17, 2023, by Ordinance 2934; and
WHEREAS, pursuant to ORS 197A.100, implemented through OAR 660, Division 8, cities with a
population greater than 10,000 are required, within one year of adopting an HCA, to develop a
Housing Production Strategy (HPS) to promote the development of needed housing identified
in the adopted HCA; and
WHEREAS, the development of the HCA and the HPS was an approximately two-year process
that included review and input from a twenty-member Housing Production Strategy Task Force,
two online surveys, stakeholder interviews, and work sessions with the City Council and
Planning Commission; and
BE IT RESOLVED by the Lake Oswego City Council that that:
Section 1. The City Council hereby adopts the Findings and Conclusions (LU 24-0024),
attached as Attachment 1.
Section 2. The Housing Production Strategy dated July 31, 2024, in Attachment 2 shall be and
hereby is adopted.
Section 3. Effective Date. This Resolution shall be effective immediately upon its adoption
by the City Council.
Considered and enacted at the regular meeting of the City Council of the City of Lake Oswego on
the day of , 2024.
AYES:
NOES:
EXCUSED:
ABSTAIN:
Resolution 24-36 Page 1 of 2
(LU 24-0024)
Joseph M. Buck, Mayor
ATTEST:
Kari Linder, City Recorder
APPROVED AS TO FORM:
Ellen Osoinach, City Attorney
Resolution 24-36 Page 2 of 2
(LU 24-0024)
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LU 24-0024 ATTACHMENT 2/PAGE 1 OF 44 �— ,
ACKNOWLEDGMENTS
CITY COUNCIL HOUSING PRODUCTION STRATEGY TASK FORCE
Mayor Joseph M. Buck Mayor Joseph M. Buck, City Council Liaison (non-voting)
Ali Afghan Philip Stewart, Planning Commission Liaison (non-voting)
Trudy Corrigan Douglas Corder, 50+Advisory Board Representative
Massene Mboup Kasey Adler,Transportation Advisory Board
Aaron Rapf Representative
Rachel Verdick Bruce Poinsette, Development Review Commission
Representative (builder)
John Wendland
At-large Members:
Sarah Walker(affordable housing developer)
PLANNING COMMISSION
David Tangvald (real estate broker)
Diana Moreno
Phil Bertrand (real estate broker)
Don Mitchell
Kyrsten Baumgart (resident)
Rachel Naujock
Yoko Kinoshita (resident)
Miles Rigby
Logan Bryck (resident)
Dave Schenone
Cara Kao-Young (resident)
Philip Stewart
Rebecca Lane (resident)
James Thwing
John E. Pauley(resident)
Rosalie Nowalk(resident)
CITY STAFF
Pat Ginn (resident)
Erik Olson, Long Range Planning Manager Diana Howell (resident)
Jessica Numanoglu, Community
Development Director John Turchi (resident)
PROJECT TEAM
Matt Hastie, MIG
Kate Rogers, MIG
Andrew Parish, MIG
Katie Vickers, MIG
Brendan Buckley,Johnson Economics
LU 24-0024 ATTACHMENT 2/PAGE 2 OF 'Jswego Housing Production Strategy
TABLE OF CONTENTS
EXECUTIVE SUMMARY 1
PROJECT OVERVIEW 3
Project Purpose and Background 3
Lake Oswego's Housing Needs 4
Engagement Summary 5
STRATEGIES AND ACTIONS 7
1. Code audit and amendments 11
2. Remove or reduce minimum parking requirements 13
3. Rezone land 14
4. Evaluate accessible design incentives or mandates 16
5. Multiple Unit Property Tax Exemption (MUPTE) 20
6. Pre-approved plan sets for ADUs 22
7. Modify System Development Charge (SDC) fee schedule 23
8. Nonprofit Low-Income Housing Tax Exemption 26
9. Low-Income Rental Housing Tax Exemption 27
10. Public-private partnerships for affordable housing 29
11. Use Tax Increment Financing (TIF) to support affordable housing development 30
12. Affordable housing preservation inventory 32
13. Fair Housing policy and education 33
ACHIEVING FAIR AND EQUITABLE HOUSING OUTCOMES 35
MONITORING PROGRESS AND OUTCOMES 39
LIST OF APPENDICES 41
APPENDICE;,
A. Contextualized Housing Needs Assessment
B. Engagement Summary
C. Pre-HPS Survey Results
LU 24-0024 ATTACHMENT 2/PAGE 3 OF 44 ego Housing Production Strategy
XECIJTIVE SUMMARY
OVERVIEW
Oregon Statewide Planning Goal 10 requires cities to plan for the housing needs of all community members. As a
city within the Portland Metro area, Lake Oswego must complete a Housing Needs Analysis (HNA) every six
years as well as a Housing Production Strategy(HPS)to implement specific actions that address the identified
needs.
Lake Oswego's Housing Production Strategy outlines a range of strategies the City plans to implement to address
housing needs within the community.The HPS prioritizes current and future housing needs identified in the HNA
and outlines actionable policies, actions, and implementation steps to encourage the production of housing.
These include things like changes to how the City zones land and regulates development of housing, financial
incentives,funding sources, partnerships, and other tools and policies.
This HPS Report includes information about the City's critical housing needs and summarizes public engagement
activities that informed and shaped the housing strategies recommended for implementation.The document
also summarizes how the HPS will help achieve fair and equitable housing outcomes for the Lake Oswego
community—especially for low-income households, communities of color, people with disabilities, and other
state and federal protected classes. Lastly,this document describes how the City of Lake Oswego will monitor
the implementation and progress of the strategies recommended in the HPS.
RECOMMENDED STRATEGIES AND ACTIONS
On the next page is a summary of the strategies and actions recommended as part of Lake Oswego's HPS.The
strategies are organized by the primary housing need that they address. However, some strategies address
housing needs across multiple categories.
LU 24-0024 ATTACHMENT 2/PAGE 4 OF 44 • Housing Production Strategy I 1
OVERALL HOUSING Increase housing production to meet the City's overall long-term
PRODUCTION AND SUPPLY housing need.
Enable and encourage production of housing that can meet a full
INCREASED HOUSING range of household needs and preferences.This includes a wider
CHOICES variety of housing types and sizes, and housing to meet particular
needs such as aging in place and accessibility.
AFFORDABLE HOUSING
FOR LOWER-INCOME Facilitate development of government-subsidized housing that
meets the needs of low-and moderate-income households.
HOUSEHOLDS
The strategy in this category(Fair Housing policy and education)
OTHER does not easily fit under the other headings, but supports equitable
implementation of all recommended housing strategies.
More details about the implementation time frames and cost/effort estimates in the table below are provided in
the Strategies and Actions section of this report.
IMPLEMENTATION TIME FRAME
Strategy Begin Complete Cost Effort
Overall Housing Production and Supply
1. Code audit and amendments Near Term Medium Term $$ • • •
2. Remove or reduce minimum parking requirements Near Term Near Term $ •
3. Rezone land Near Term Medium Term $$ • • •
Increased Housing Choices
4. Evaluate accessible design incentives or mandates Longer Term Longer Term $$ • •
5. Evaluate Multiple Unit Property Tax Exemption Longer Term Longer Term $$ • •
6. Pre-approved plan sets for ADUs Longer Term Longer Term $$$$ • • •
7. Modify System Development Charge fee schedule Near Term Medium Term $$$$ • • •
Affordable Housing for Lower-Income Households
8. Nonprofit Low-Income Housing Exemption Already Complete $ fiS •
9. Low-Income Rental Housing Tax Exemption Near Term Near Term $$ • •
10. Public-private partnerships for affordable housing Near Term Ongoing $$ • • •
Use Tax Increment Financing to support
11. affordable housing development Near Term Longer Term $$$$ • • •
12. Affordable housing preservation inventory Medium Term Medium Term $ • •
Other
13. Fair Housing policy and education Near Term Medium Term $ • •
LU 24-0024 • ATTACHMENT 2/PAGE 5 OF 44 ego Housing Production Strategy
PRO • OVERVIEW
PROJECT PURPOSE AND BACKGROUND
Oregon Statewide Planning Goal 10 requires cities to plan for the housing needs of all community members. As a
city within the Portland Metro area, Lake Oswego must complete a Housing Needs Analysis (HNA) every six
years as well as a Housing Production Strategy(HPS)to implement specific actions that address the identified
needs.
The Lake Oswego City Council adopted an updated HNA in October 2023.The HNA looks at the community's 20-
year housing needs and whether there is enough residential land in the city to meet those needs. Under Goal 10,
the City is required to adopt measures that will increase the likelihood that development of needed housing will
occur and to work towards addressing any deficiencies in land capacity necessary to meet its housing needs.As
a Metro jurisdiction, Lake Oswego is also part of a regional process that ensures there is a 20-year supply of land
to accommodate future growth in the region.
The Housing Production Strategy outlines a range of strategies the City of Lake Oswego plans to implement to
address housing needs within the community.The HPS prioritizes current and future housing needs identified in
the HNA and outlines actionable policies, actions, and implementation steps to encourage the production of
needed housing.These include things like changes to
how the City zones land and regulates development of
housing,financial incentives,funding sources, Wr • , ,,,
partnerships, and other tools and policies.
The HPS process focuses on strategies related to the `1■ �
production of new housing, recognizing the significant ,,. ..,l�� °y '' ` i
shortfall of housing produced in Oregon during the last ' •„, •,
two decades. However, it also will be important for the Yy .a.
City to work with its community partners to help'..
conserve, maintain, and rehabilitate existing housing in - _• F
Ariir
Lake Oswego, particularly where such housing also is 4`` �':�
affordable to people with low and moderate incomes. 0• a•
LU 24-0024 ATTACHMENT 2/PAGE 6 OF 44_. Housing Production Strategy 13
LAKE OSWEGO'S HOUSING NEEDS
The project team used the findings from the HNA, as well as additional information from the Census, other data
sources, and from stakeholders involved in housing production in the city,to put Lake Oswego's housing needs
into context with current demographic and development trends. Below are some key findings from the HNA and
Contextualized Housing Needs Assessment (Appendix A).
Current Needs
• While Lake Oswego is generally considered an affluent community, not all
households are wealthy. Over 40%of households in the city earn less than
$100k and nearly 20%of households earn less than $50k per year.
0
• Homeownership costs have increased significantly in Lake Oswego,
consistent with national trends.The median home sale price in Lake Oswego
has more than doubled over the past 10 years,from $395k in 2012 to$860k Nearly 20%of
in 2022. households earn less
# • than $50k per year
• •
Veit * . • There is very little existing housing available to
*M !f z • & 'f t those in lower income segments.Around 2/3 of existing housing units (both rental�f i • and ownership units) are unaffordable to those earning less than $100k per year,
WAN* 11�.TMM, and over 90% of existing units are unaffordable to those earning less than $50k per
*f' of �r 0 year.
Nearly half of renters are • Nearly half of renter households in Lake Oswego are considered housing cost
cost burdened burdened, meaning they pay more than 30%of their income for housing.
Future Needs
• Lake Oswego will need nearly 2,000 new housing units by 2043 to meet
projected demand. Housing will need to be produced across the income
spectrum to meet these needs.
• A wide range of housing types are needed to meet the range of household
sizes and incomes.The majority of new needed homes (61%) are projected
to be attached housing—this includes 27%as middle housing units 2,000 new housing
(townhomes and "plexes" with two to four units) and 34%as multi-family units needed
housing (e.g., apartments).
•More than 1/3 of new housing units over the next 20 years will be needed by
"low-income" households—those earning at or below 80%of the median family
income (MFI)for Clackamas County.
•The private market will not deliver housing that is needed by low-income
households on its own. Housing that is affordable to those earning below 80%
27%of new needed units MFI typically requires government subsidy and partnerships with affordable
are middle housing housing providers.
LU 24-0024 ATTACHMENT 2/PAGE 7 OF 44 • Housing Production Strategy 14
• There is a shortage of buildable residential land across all zone types
(low-to high-density)to meet the 20-year housing need in Lake Oswego Shortage of
(a deficit of 86 total acres, or 642 total units). residential
land
Key Housing Gaps
The following housing types have been identified by stakeholders involved in
local housing production as key gaps in Lake Oswego's housing market.The HPS will work toward meeting these
housing needs and filling these gaps.
• Affordable housing for low-and moderate-income households.
• Greater housing choices within neighborhoods, including middle housing (e.g.,townhomes, duplexes,
cottage clusters).
• Opportunities for aging in place—More than 20% of the population is over 65.
• Options for more attainable homeownership (e.g., condos and middle housing).
• Apartments with family-size units (2-3 bedrooms)— Nearly 1/3 of current households in the city have
children.
• Multi-family housing outside the Town Center.
ENGAGEMENT SUMMARY
The City of Lake Oswego is committed to reaching a broad range of community members to consider all
perspectives related to housing within the city.The City values openness and transparency, recognizing that
successful public engagement leads to better local decisions and outcomes.
The public engagement for the Lake Oswego HPS allowed community members, stakeholders, and interested
parties to share their perspectives and input.This project was developed through a collaborative process among
the community, City staff and decisionmakers, stakeholders, and consultants to ensure that multiple points of
view were considered and understood. Below is a summary of engagement activities and outcomes for the HPS.
More detail is provided in Appendix B.
Public engagement was split into three phases:
Phase 1: HNA Phase 2: HPS Phase 3: HPS
(Dec 2022 Oct Development
(Oct 2023 -Jul Adoption
2023) 2024) (Aug - Nov 2024)
LU 24-0024 ATTACHMENT 2/PAGE : , ;;svv;�go Housing Production Strategy 15
OUTREACH METHODS INCLUDED:
Housing Production Strategy Task Force.This advisory group included a variety of housing
�O - stakeholders, producers, and consumers.This included realtors, housing development
industry members, homeowners, renters, and representatives of the City's Planning
Commission, City Council, 50+Advisory Board, and Transportation Advisory Board, among
others.
The Task Force was instrumental in shaping the City's approach to the HPS and the
strategies ultimately selected. They reviewed materials created by the project team at
each step of the process and provided important information and feedback.This was
especially beneficial in informing decisions by the Planning Commission and City Council.
O O Stakeholder Interviews.The project team interviewed stakeholders involved in various
ga-@ aspects of housing production, including affordable housing producers as well as
developers or designers of market-rate multifamily, middle housing, and single-family
housing.
The feedback received from housing stakeholders influenced the strategies included in the
HPS. For example,the code topics addressed in the Code Audit and Amendments strategy
were refined to address the barriers identified by housing developers and producers. Also,
incentives and other strategies that support affordable housing development(tax
abatements,TIF funding, partnerships) were shaped by these interviews.
Virtual Forums and Surveys.The City hosted two virtual community forums—on April 6,
0 0 2023 to discuss housing needs as part of the HNA, and on March 14, 2024 to review the
r-1 strategies being considered for the HPS.The HPS forum used live polling to get feedback in
I I real-time to supplement the discussion.The City also hosted two online surveys/online
open houses that corresponded with the virtual forums.
The HPS community forum and online survey were used to gauge community support for
various strategies under consideration for the HPS.
Presentations to Boards and Commissions. City staff presented to the following groups:
Diversity, Equity and Inclusion Advisory Board; 50+Advisory Board; November 2023
Mayor's Roundtable event; and Fall 2023 Kruse Way Economic Forum
p 0 p City Council and Planning Commission meetings.The project team held work sessions
� with the City Council and Planning Commission at key points in the project.Adoption
hearings with both bodies were held in fall 2024.
Planning Commission and City Council provided important direction to the project team at
key points in the HPS development. Work sessions with both bodies were used to review,
refine, and prioritize specific strategies included in the HPS. Ultimately,the Planning
Commission and City Council provided direction on which strategies to include in the draft
HPS and approved the final HPS via adoption hearings.
LU 24-0024 ATTACHMENT 2/PAGE 9 OF 44
TRAIEGIES AND ACTIONS
The Housing Production Strategy identifies strategies and actions that the City of Lake Oswego and community
partners can take to promote housing development that meets the needs of the community. All strategies
recommended in this report were supported by the HPS Task Force, City Council, and Planning Commission.
The strategies are organized by the primary housing need that they address. However, some strategies address
housing needs across multiple categories.
OVERALL HOUSING Increase housing production to meet the City's overall long-term
PRODUCTION AND SUPPLY housing need.
Enable and encourage production of housing that can meet a full
INCREASED HOUSING range of household needs and preferences.This includes a wider
CHOICES variety of housing types and sizes, and housing to meet particular
needs such as aging in place and accessibility.
AFFORDABLE HOUSING
FOR LOWER-INCOME Facilitate development of government-subsidized housing that
meets the needs of low-and moderate-income households.
HOUSEHOLDS
The strategy in this category(Fair Housing policy and education)
OTHER does not easily fit under the other headings, but supports
equitable implementation of all recommended housing strategies.
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LU 24-0024 ATTACHMENT 2/PAGE 10 OF ,;_go Housing Production Strategy 17
The HPS report summarizes key information for each of the recommended strategies and identifies steps
needed for implementation.The summary of each housing strategy includes the following information:
Description What is the strategy? How can the strategy work to address identified housing needs in
Lake Oswego?What are potential outcomes?
Considerations What potential options, funding needs, challenges, etc. are applicable to the strategy?
Are there potential trade-offs or negative externalities to consider? How feasible is this
strategy, given other considerations?
Recommendation Identifies specific actions recommended for implementation. (Not applicable to all
strategies).
Anticipated What is the anticipated impact of the strategy?The following types of impacts are
Impact considered:
• Housing need addressed—Housing need identified in the HNA that is addressed by
the strategy
• Populations served by the strategy
• Income levels addressed by the strategy
• Benefits and burdens that "priority populations" may receive from the strategy.
"Priority populations" include low-income households, people of color, people with
disabilities, seniors, and other state or federal protected classes.
• Housing tenure (either owner or renter)
• Magnitude of the action for producing new housing:
Low impact=The strategy is unlikely to meet the relevant housing need.A low
impact strategy does not mean an action is unimportant. Some actions are
necessary or beneficial, but not sufficient on their own to produce new housing.
Moderate impact=The strategy either may have a moderate impact on meeting
the relevant housing need or be designed to target that need.
High impact=The strategy may directly benefit a certain housing need and is
likely to be most effective at meeting that need relative to other strategies.
Time Frame Implementation: When does the City expect to begin implementation, and when will the
action to be adopted and implemented?Strategies are identified as Near Term (1-3
years), Medium Term (within 3-5 years), and Longer Term (>5 years) actions.
Impact: Over what time period will the impact occur?
Implementation What actions will the City and other stakeholders need to take to implement the
Actions strategy?
Lead & Partners Who will be responsible for implementing the strategy?What partnerships might be
necessary or beneficial to the strategy?
LU 24-0024 ATTACHMENT 2/PAGE 11 OF 44
SUMMARY OF STRATEGIES AND IMPLEMENTATION
Strategies are identified as Near Term (1-3 years), Key
Medium Term (within 3-5 years), and Longer Term Cost Effort
(>5 years) implementation time frames. A matrix $ Minimal Investment • o o Minimal Effort
shows each strategy with the time frames, relative $$ Moderate Investment • • 0 Moderate Effort
cost, and level of effort. $$$ Significant Investment • • • Significant Effort
$$$$ Major Investment
A general implementation timeline follows on the
next page.
IMPLEMENTATION TIME FRAME
Strategy Begin Complete Cost Effort
Overall Housing Production and Supply
1. Code audit and amendments Near Term Medium Term $$$$ • • •
2. Remove or reduce minimum parking requirements Near Term Near Term $$$$ • 0 0
3. Rezone land Near Term Medium Term $$$$ • • •
Increased Housing Choices
4. Evaluate accessible design incentives or mandates Longer Term Longer Term $$$$ • •
5. Evaluate Multiple Unit Property Tax Exemption Longer Term Longer Term $$$$ • •
6. Pre-approved plan sets for ADUs Longer Term Longer Term $$$$ • • •
7. Modify System Development Charge fee schedule Near Term Medium Term $$$$ • • •
Affordable Housing for Lower-Income Households
8. Nonprofit Low-Income Housing Exemption Already Complete $`" •
9. Low-Income Rental Housing Tax Exemption Near Term Near Term $$ • •
10. Public-private partnerships for affordable housing Near Term Ongoing $$ • • •
Use Tax Increment Financing to support • • •
11. affordable housing development Near Term Longer Term $$$$
12. Affordable housing preservation inventory Medium Term Medium Term $$$$ • •
Other
13. Fair Housing policy and education Near Term Medium Term $$$$ • • o
LU 24-0024 ATTACHMENT 2/PAGE 12 OF 44 Housing Production Strategy 19
IMPLEMENTATION TIMELINE
2024 2025 2026 ! 2027 2028 ? 2029 2030
1. Code audit and amendments
2. Remove or reduce min. Parking requirements ,
3. Rezone land* Non-Residential Low-Density Res.
4. Evaluate accessible design incentives or mandates
5. Evaluate Multiple Unit Property Tax Exemption
6. Pre-approved plan sets for ADUs I
7. Modify SDC fee schedule* cottage SDC Methodology N
Cluster
8. Nonprofit Low-Income Housing Exemption
9. Low-Income Rental Housing Tax Exemption
10. Public-private partnerships for affordable housing Ongoing
11. Use TIF to support affordable housing
12. Affordable housing preservation inventory ,
13. Fair Housing policy and education* Policy Update Education
*Refer to the strategy descriptions for details about phasing.
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LU 24-0024 ATTACHMENT 2/PAGE 13 OF 44 Housing Production Strategy 110
STRATEGIES TO BOOST OVERALL HOUSING PRODUCTION AND SUPPLY
The following strategies are intended to increase housing production in Lake Oswego.The HNA indicates that
nearly 2,000 new housing units will be needed by 2043.This includes approximately 950 units for higher-income
households and over 1,000 units for middle-and lower-income households. Increasing housing production will
not only help meet these needs, it can also slow increasing housing costs by helping balance housing supply and
demand.
1. Code audit and amendments
Description Undertake a comprehensive audit of the Community Development Code (CDC)to
identify barriers to housing production and implement code amendments to address
those barriers.
The CDC audit and amendments are recommended to address:
• Barriers to accessory dwelling units (ADUs) and middle housing;
• Ways to facilitate smaller units;
• Procedural requirements that add cost and delay to land use approvals;
• Open space requirements in high-density zones;
• Barriers to residential development within mixed-use districts;
• The impact of neighborhood and design district overlays, restrictive siting
standards, or other regulatory provisions; and
• Other identified Code barriers.
The CDC amendments could also incorporate recent changes to state law related to
affordable housing and lower-cost housing choices.These statutory provisions apply
whether or not the City adopts them locally, but amending the Code could facilitate
easier interpretation by staff and applicants. Recent changes to Oregon Revised Statutes
(ORS) include:
• ORS 197A.445(2) (Senate Bill 8, 2021): Allows affordable housing with density
and height bonuses.
• ORS 197A.445(3) (House Bill 2984, 2023): Allows conversion of commercial
buildings into housing.
• ORS 197A.430 (House Bill 3395, Sections 16-19, 2023):Allows single room
occupancies in all residential zones.
Considerations • This strategy could help reduce or eliminate some of the major code and procedural
barriers identified by housing stakeholders.
• The strategy could be shaped to prioritize housing types identified as most needed in
the city, based on the City's recently adopted HNA and stakeholder input, such as:
o Middle housing (e.g.,townhomes, duplexes, and cottage clusters)
o Apartments with family-size units (2-3 bedrooms)
o Multi-family housing (of any size)
o Smaller homes
LU 24-0024 ATTACHMENT 2/PAGE 14 OF 44
• Simply removing code barriers will not lead to housing development.This strategy
should be paired with others that directly influence housing production.
• There may be neighborhood resistance to this strategy, particularly for any code
amendments intended to modify existing neighborhood overlays or neighborhood
planning efforts. Extensive community engagement would be necessary.
Anticipated • Housing need addressed: General need for increased housing production and
Impact increased housing choices.This strategy could also specifically address the needs for
multi-family housing, middle housing, and smaller units such as ADUs.
• Population served: Low to higher-income households
• Income level:All income levels
• Benefits and Burdens:This strategy is broad, and therefore difficult to evaluate in
terms of benefits and burdens for priority populations. However, it does give the
opportunity to target efforts in beneficial areas such as reducing barriers to
affordable development or housing that is more attainable to low-and moderate-
income households (e.g., multi-family and middle housing);facilitating smaller
housing options such as ADUs,which could benefit seniors; and other areas aimed at
helping priority populations. In addition, increasing overall housing supply can help
keep housing costs down by balancing supply and demand,which benefits all
residents, including priority populations.
However, because the strategy is intended to increase housing production overall, it
has the potential to primarily benefit upper income households. Implementation
should include a focus on meeting the needs of housing types that benefit low-and
moderate-income households, seniors, and other priority populations.
• Housing tenure: For rent or sale
• Magnitude: Moderate—This strategy could have a moderate impact on new housing
production given the limited remaining inventory of buildable residential lands. The
low inventory and relatively high land prices in Lake Oswego incentivize making more
intensive use of remaining sites, if the code permits it.
Time Frame Implementation: Begin in Near Term; Complete in Medium Term.
Impact:The action can begin to have impact after it is implemented in the CDC.
However,the impact on housing development is expected to be longer-term.
Implementation • Identify priorities for the code audit,focusing on high-priority housing needs.
Actions • Potentially seek a technical assistance grant from DLCD or other sources to support a
code audit project.
• Conduct a comprehensive CDC audit, potentially with support from a consultant.
• Work with developers/housing stakeholders and residents to vet potential CDC
amendments.
• Work with Lake Oswego's Planning Commission and City Council to adopt code
amendments.
• City Council Action: Legislative CDC text amendments.
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Lead & Partners Lead: Lake Oswego Community Development
Partners: Developer and housing stakeholders
2. Remove or reduce minimum parking requirements
Description As required by the State of Oregon's Climate-Friendly and Equitable
Communities (CFEC) program,the City is currently undertaking Citywide Parking
Reform efforts to develop regulations that comply with the CFEC rules.This
includes requirements to remove parking mandates in certain areas (near
transit, Downtown, and in the Lake Grove Village Center).The City is also
required to take additional steps to reduce parking requirements. For example,
the City could consider removing parking mandates citywide as a part of this
work.
While the CFEC-related parking reform efforts were not initiated as part of the
HPS, reducing parking mandates benefits housing production in several ways. It
provides the opportunity to reduce the amount of lot area used for pavement
and storage of vehicles and provides more space for housing and open space. It
also offers greater flexibility to site housing and reduces costs associated with
providing parking.The City is choosing to recognize the value of this work in
facilitating housing development by including in the HPS.
More information about the Citywide Parking Reform project is available here:
www.ci.oswego.or.us/planning/pp-22-0001-citywide-parking-reform.
Considerations • Parking mandates are often cited as a major barrier for market-rate multi-
dwelling and regulated affordable housing.
• Developers often choose to provide parking, even if not required.
Lenders/investors may require some parking to ensure marketability of
units.
• There could be community opposition to removing all parking mandates, due
to the potential for higher usage of on-street parking and the potential for
parking overflow from commercial areas to residential neighborhoods.
Anticipated • Housing Need Addressed: General need for increased housing production.
Impact This strategy would especially benefit production of multi-family and
government-subsidized affordable housing.
• Population served: Especially beneficial to low-to moderate- income
households
• Income level:All income levels—especially 30-120%AMI
• Benefits and Burdens:This strategy has the potential to benefit low-income
households and people of color by removing parking mandates as a barrier
to development of affordable housing.
Access to convenient parking has been raised as an important need for
people with disabilities; therefore, removing parking mandates could
potentially burden those populations if parking is not provided.The City
could consider encouraging property owners to provide parking for people
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with disabilities and set policy on when on-street parking designated for
people with disabilities is appropriate. On the other hand, some people with
disabilities are unable to drive and could benefit from removing additional
costs associated with parking.
• Housing tenure: For rent or sale
• Magnitude: High—This action is likely to have the most impact on market-
rate multi-family and regulated affordable housing. Parking mandates are
often cited as a major barrier for those types of development. Reduced
parking often allows for greater density(i.e., additional housing) on a site,
improving the financial feasibility via replacing the sunk cost of building and
maintaining the parking area, with additional revenue-generating space.
Reduced parking also allows developers to be more creative with site
planning and design features in general, often improving the aesthetics and
functionality of a property as well.
Time Frame Implementation: Begin and Complete in Near Term
Impact:The action will begin to have impact as soon as the parking mandates
are removed. Impacts to housing production are expected to be longer term.
Implementation • Conduct outreach and education related to parking mandates.
Actions • Work with Lake Oswego's Planning Commission and City Council to adopt
code amendments.
• City Council Action: Adopt Development Code text amendments.
Lead & Partners Lead: Lake Oswego Community Development
Partners: N/A
3. Rezone land
Description This strategy involves rezoning commercial, mixed-use, or other non-residentially
zoned properties for residential uses, especially multi-family housing. It could also
involve updating zoning districts to allow housing where not currently allowed or
rezoning lower-density areas to allow higher-density housing.
The HNA identified a need for additional residential land across all zone types to meet
the 20-year housing need in Lake Oswego (a deficit of 86 total acres, or 642 total
units). As such,there may be a need to add to the city's capacity of residential land to
meet the housing need. Rezoning is one way to help address this issue.
Recommendation Prioritize rezoning in areas with the greatest potential for higher density multifamily
housing—including areas where nonresidential uses are underutilized. Potential zoning
districts to consider for this strategy include the Mixed Commerce District (MC) and
Industrial District (I). Consider a phased approach that first looks at nonresidential
zones,then looks at upzoning lower-density areas in a later phase. Some of this work
could coincide with the Code Audit and Amendments work under Strategy 1.
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