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HomeMy WebLinkAboutAgenda Item - 2025-04-01 - Number 10.2 - Home Occupation Standards (LU 25-0002) 10.2 oti� E*P4_ COUNCIL REPORT v AN o OREGO� Subject: Home Occupation Code Update (LU 25-0002) Meeting Date: April 1, 2025 Staff Member: Michael McNamee, Associate Planner Report Date: March 21, 2025 Department: Community Development Department Action Required Advisory Board/Commission Recommendation ❑ Motion ❑ Approval ❑ Public Hearing ❑ Denial ❑ Ordinance ❑ None Forwarded ❑ Resolution ❑X Not Applicable ❑ Information Only Comments: The Council provided direction to staff to ❑X Council Direction update regulations related to home occupations to ❑ Consent Agenda ensure that they are clear, objective, and enforceable at their meeting on June 18, 2024. Staff Recommendation: Provide direction on which code concepts should be further refined and/or presented to the Planning Commission to update the City's home occupation regulations. Recommended Language for Motion: N/A Project/ Issue Relates To: Use-specific requirements in the Community Development Code for home-based occupations. Issue before Council (Highlight Policy Question): How to replace unclear zoning requirements for home occupation businesses with clear and objective regulations that support their unique needs. ❑Council Goals/Priorities ❑Adopted Master Plan(s) ❑X Not Applicable ISSUE BEFORE COUNCIL Provide direction to staff on which code concepts should be further refined and/or to be presented to the Planning Commission to update the City's home occupation regulations. Respect. Excellence. Trust. Service 503-635-0215 380 A AVENUE PO BOX 369 LAKE OSWEGO, OR 97034 WWW.LAKEOSWEGO.CITY Page 2 EXECUTIVE SUMMARY Based on Council direction, this project is intended to replace subjective language within the use-specific requirements for home occupation businesses with objective, measurable text that can be easily understood by home occupation business applicants and neighbors. The updated home occupation regulations must also be able to be effectively enforced and consistently applied by Planning and Code Enforcement staff. BACKGROUND Home occupations are a type of business conducted from a residential dwelling unit. This is distinct from an employee of a business headquartered offsite who works from home. Examples include professionals who see clients in their homes, e.g., psychologists or attorneys, artisans and craft persons who manufacture and distribute art and goods, and home daycares1. As defined in the Community Development Code (LOC Chapter 50), a home occupation has to be secondary to the use of a dwelling for dwelling purposes (LOC 50.10.003.2). Use-specific standards apply to home occupations, which can be found in the Accessory Structures and Uses section of the CDC (LOC 50.03.004.1.b). Subcriterion (1) uses language that is neither clear nor objective: A home occupation may be conducted where allowed by other provisions of this Code if the following conditions are continuously complied with: (1) The use does not alter the residential character of the neighborhood nor infringe upon the right of residents in the vicinity to the peaceful enjoyment of the neighborhood. (2)A current and valid business license is maintained. (3) No persons other than family members who reside at the dwelling may be employed or otherwise work in the home occupation, except persons performing housekeeping, yard maintenance, or other domestic services for the dwelling where the business occurs. (4) No outside storage of goods or materials other than vegetation. (5) No more than 25%of the aggregate floor area on the lot is devoted to nonresidential use, except that an entire dwelling unit or portion thereof may be used for short-term rental lodging; an accessory structure may be used, provided the provisions of this subsection are met. (6) Marijuana facilities, psilocybin service centers, and psilocybin production are prohibited. (7)Short-term rentals shall meet the following additional standards: 1 Home daycares are distinguished from day care centers and certified or registered family child care homes,which are themselves, respectively, conditional and out-right permitted uses in residential zones. LOC Table 50.03.002-1. Respect. Excellence. Trust. Service 503-635-0215 380 A AVENUE PO BOX 369 LAKE OSWEGO, OR 97034 WWW.LAKEOSWEGO.CITY Page 3 (a)A person who owns a lot containing a short-term rental(primary or secondary dwelling unit) must maintain their primary residence on the lot. The owner is not required to be on the lot when the dwelling is rented. (b) No other commercial uses are allowed in conjunction with or accessory to a short-term rental. The short-term rental shall not be marketed for group events such as weddings, classes, or similar events,for example. "Altering the residential character of a neighborhood" or "infringing upon the rights of residents in the vicinity to the peaceful enjoyment of the neighborhood" are standards that are difficult to measure before the business has commenced operation. This language makes it difficult for home occupation applicants, neighbors, the general public, and staff to understand and enforce the limitations of a home occupation. The purpose of this project is to replace Subcriterion (1), above, with new code language that distills the concepts of "residential character" and "peaceful enjoyment of the neighborhood" into measurable, objective standards that provide a clear path for approval and ongoing compliance for home occupations. Staff discussed this idea with the City Council at their meeting on June 18, 2024 as part of a general update on civil violation code enforcement. The Council expressed support and directed staff to study how to replace Subcriterion (1) with clear and objective code language. The Planning Commission held its first work session on this project at its meeting on January 27, 2025. The Commission provided staff with initial feedback on a range of potential new code concepts to replace Subcriterion (1), which has been incorporated into the refined code concepts in the discussion section below. Staff then developed a survey for residents with active home-based occupations to rank their understanding of and ability to comply with the City's existing requirements, and to get a sense of how potential new code concepts could impact their business (Attachment 1). On February 26, the survey was sent to the 558 business licensees who had an active home-based business in the city and an email address on file. The survey was open for three weeks, and was closed on March 19. At its close, 157 people responded, which is a roughly 28 percent response rate. The survey had four sections: Section 1— Background Information: Asked for information about the business owned by the respondent, including the type of business, how many nonpersonal vehicles associated with the business are parked at home, and how much money is saved by operating the business at home, if any. Section 2 - Existing Requirements: Asked respondents to rank their understanding of existing zoning requirements for home occupations, as well as their ability to comply with those requirements. If complying with the requirement was identified as a burden to the business, respondents were asked to explain why. Respect. Excellence. Trust. Service 503-635-0215 380 A AVENUE PO BOX 369 LAKE OSWEGO, OR 97034 WWW.LAKEOSWEGO.CITY Page 4 Section 3— Potential Concepts: Asked respondents about seven potential concepts to replace Subcriterion (1) of the existing zoning regulations. As in Section 2, respondents were asked to rank their level of understanding and theoretical ability to comply with the potential replacements. Respondents were also given the ability to explain why any of the concepts might be a burden to their business. Section 4— Feedback: A feedback form was provided for general comments. As of the date of this report, staff has not yet fully processed the results of the survey as it has only been closed for two days. Staff will summarize the results of the survey during the study session on April 1 and at a Planning Commission work session tentatively scheduled for April 14. DISCUSSION Home Occupation Regulation Concepts Subcriterion (1) articulates a goal of retaining neighborhood character and peaceful enjoyment of the neighborhood by those living in close proximity to a home occupation. Staff explored several different ways of achieving this regulatory goal through requirements that are objective and measurable, which were based on existing code enforcement practices and refined by a work session with the Planning Commission. Seven potential new code concepts were included in the survey sent to home occupation business license holders. 1. A limit on the number of clients who can be on site at once. Not all home occupation uses involve client visits, but when they do, they could potentially have an impact on the quiet enjoyment of residential neighborhoods or neighborhood character. A common complaint about home occupations, especially in neighborhoods that are primarily residential, is that they produce more traffic and noise than would result from residential use only. It is common practice in peer jurisdictions to have some limitation on client visits. Originally, Planning staff considered the concept of imposing a limit on the number of clients who could visit a home occupation over a certain time period or during certain times of day. Based on feedback from Code Enforcement staff, the concept was changed to a limit on the number of clients who can gather at one time because this would likely be easier to enforce and addresses concerns around large classes or other gatherings that may generate excessive noise and traffic. 2. A limit on the number of nonpersonal vehicles parked on site. Some home occupation businesses have commercial or fleet vehicles associated with them. An excessive number of commercial vehicles concentrated on one site could potentially impact neighborhood character as well as the availability of parking in the area —which is another common concern voiced by neighbors about home occupations. One of the questions on the survey asked about the number of nonpersonal vehicles the respondent parked at their home, if any. Most respondents do not park any Respect. Excellence. Trust. Service 503-635-0215 380 A AVENUE PO BOX 369 LAKE OSWEGO, OR 97034 WWW.LAKEOSWEGO.CITY Page 5 nonpersonal vehicles at home, but of the ones that do, most say they have one or two. In the past, Code Enforcement has encountered outlier cases where a home occupation business has three or more nonpersonal vehicles were parked at the home. 3. Limiting outdoor activities associated with a home occupation. Outdoor activities associated with a home occupation business may produce a disproportionately large amount of noise for residential areas, especially when the activity is repeated on a regular basis (as is generally expected of an ongoing business). While the idea of an outright ban on outdoor activity was initially explored, staff received feedback from the Planning Commission and Neighborhood Chairs Committee that such a ban could be overly-restrictive for home occupations. Staff is now considering a code concept that would ban outdoor home occupation business activity during certain times of the day. The idea is to limit noise when residents may expect the neighborhood to be quiet, and to permit outdoor activity associated with home occupations to occur during the day. Another code concept that could address this concern could would be to place limitations on the physical size of outdoor activities associated with a home occupation, to limit their potential visual impact on the surrounding area. 4. Restricting amplified sound. Noise is a common complaint as it relates to home occupation businesses, particularly noise produced by amplified speakers to play music or make announcements. While it may be expected that a neighbor could occasionally throw a party and/or play music outside, it is not generally within the bounds of residential neighborhood character to have residential use that has repeated, ongoing, regular use of amplified sound. This concept would restrict amplified sound for home occupation businesses, potentially by prohibiting the use of electric-powered speakers associated with home occupations. Alternately, this concept could only limit speakers that are capable of playing sound above a certain level, to provide some flexibility to play music or other sounds at softer volumes that might not have as large of an impact on neighboring properties. More research would be needed to determine an appropriate power (e.g. Wattage or decibel) level. 5. Placing additional restrictions on flag lots. In general, flag lots abut a higher number of properties than other lots, and they typically abut the backyards of neighboring property. This adjacency to surrounding properties can increase others' exposure to activity that takes place outside on a flag lot. Additionally, as flag lots are accessed via an access lane that is often shared with neighboring properties, having a large number of clients regularly visiting at once has the potential to create issues with parking and access to neighboring properties—particularly if clients use the access lane as parking. Respect. Excellence. Trust. Service N 503-635-0215 380 A AVENUE PO BOX 369 LAKE OSWEGO, OR 97034 WWW.LAKEOSWEGO.CITY Page 6 The City could address this by placing more restrictive or additional limitations on home occupations located on flag lots. 6. Restricting the size of delivery trucks. Code Enforcement staff indicated that deliveries from large trucks can occasionally cause issues when they deliver to home occupation businesses in residential neighborhoods. In particular, these large trucks may need to park in the middle of the street, thereby creating a traffic hazard or temporarily blocking access to adjacent properties. To address this, staff initially considered concepts that would limit deliveries from large trucks to a home occupation. However, preliminary survey feedback indicates that the delivery of appliances and furniture using larger trucks can be relatively routine activity and may not be out of character within a residential neighborhood. This concept has since been refined to target the restriction of tractor-trailers. Such a restriction would still permit deliveries from box trucks, which are more compatible with neighborhood streets and, as survey respondents point out, are relatively common in residential neighborhoods. 7. Restricting hazardous substances.This concept, suggested by Code Enforcement staff, would add a restriction on hazardous substances to the home occupation regulations. Among peer cities, it is common to ban or restrict the use of hazardous substances. This concept would reference the definition of hazardous materials already in LOC 50.10.003.2, which in turn refers to the definition provided in state law (ORS 435.005): Hazardous Substances:Any substance listed or described as hazardous in ORS Chapter 453 (Hazardous Substances). "Hazardous substances"are toxic, corrosive, irritants, strong sensitizers,flammable, combustible, or generate pressure through decomposition, heat or other means. Hazardous substances or mixture of substances may cause substantial personal injury or illness during, or as a proximate result of any customary or reasonably foreseeable handling or use. Potential Uses to Prohibit Being Classified as Home Occupations In doing research and public outreach for this project, staff has identified two agricultural uses that may be more appropriate to regulate separately from other home occupations: • Farm stands are currently allowed in some nonresidential zones and are defined as a temporary or permanent structure used for the sale of fresh produce and seasonal items, including flowers, holiday trees, and wreaths. (LOC 50.10.003.2) • Wineries are not expressly defined in the code. This use typically involves rows of grape vines on a site, along with areas for serving customers wine and other food or beverages, either indoors or outside. Respect. Excellence. Trust. Service N 503-635-0215 380 A AVENUE PO BOX 369 LAKE OSWEGO, OR 97034 WWW.LAKEOSWEGO.CITY Page 7 While these uses can be appropriate in residential zones under certain circumstances, they may also produce more impacts on surrounding residential character than other types of home occupations. For instance, farm stands and wineries may take up more space outside, require later operating hours, or attract more customers than a residence or even a typical home occupation. As such, it may not be appropriate to classify these uses as home occupations. One potential way to address this issue would be to allow farm stands and wineries within certain residential zones as either an outright permitted use or as a conditional use. Additional use-specific standards could be added to LOC 50.03.003, as necessary. (In order to minimize the impact of this potential change on existing businesses, staff recommends that any existing home-based farm stands or wineries be provided with a concurrent path to seek outright or conditional use approval along with any such code amendments.) Staff is seeking direction from Council regarding whether to explore additional regulations specific to home-based farm stands and wineries as a part of the larger effort to update the use-specific standards for home occupations. RECOMMENDATION Staff recommends that the Council provide direction on which code concepts should be further refined and/or to be presented to the Planning Commission to update the City's regulations for home occupations. ATTACHMENT 1. Copy of Survey sent to Home Occupation License Holders, 2/26/2025 Respect. Excellence. Trust. Service N 503-635-0215 380 A AVENUE PO BOX 369 LAKE OSWEGO, OR 97034 WWW.LAKEOSWEGO.CITY 3/19/25, 1:32 PM New Submission ATTACHMENT 1 I g Home Occupation Survey I,Go/ The City of Lake Oswego has long allowed residents to operate a business out of their home, depending on the type of business activity and how the business is operated. Such businesses conducted from a residential dwelling unit are commonly referred to as home occupations. This is distinct from an employee of a business headquartered offsite who works from home. The City is currently exploring updating its zoning regulations for home occupations, as certain current standards are difficult to enforce because they use subjective language. In particular, the focus of this code update is to replace one of the standards for home occupations (LOC 50.03.004.1.b.ii), which reads: The[home occupation]use does not alter the residential character of the neighborhood nor infringe upon the right of residents in the vicinity to the peaceful enjoyment of the neighborhood. (LOC 50.03.004.1.b.ii(1)) Though the idea may seem reasonable, in practice, concepts such as "residential character" and "peaceful enjoyment" of the neighborhood lack clarity and are not measurable.As a result, home occupation applicants, the public, and Code Enforcement staff are unsure specifically what home occupation businesses can or cannot do. The purpose of this project is to replace this standard (LOC 50.03.004.1.b.ii(1)) with new code language that distills the concepts of neighborhood character and peaceful enjoyment of the neighborhood into measurable, objective standards that provide a clear path for compliance and enforcement. This survey is intended for current and past holders of home occupation licenses in Lake Oswego. The questions in this survey will ask you about your business, how easy you find the existing regulations to understand and comply with, and whether you would be able to understand and comply with any of the proposed replacement regulations. Your feedback is invaluable in shaping updated standards, and we sincerely appreciate your time and participation! This survey should take less than 15 minutes to complete. Section 1 — Background Info These questions are intended to provide context to answers you provide in the next sections. Answering is optional. This poll is anonymous and your answers will not be used for enforcement purposes or to identify you. Answering honestly will help the City determine reasonable restrictions for home occupations by allowing us to understand existing conditions. 1.1 — Do you have a home occupation business license in Lake Oswego? Q Yes Q No Q I did in the past but not now Q I haven't had one, but I'm interested in getting one in the future LU 25-0002 ATTACHMENT 1/PAGE 1 OF 7 https://www.ci.oswego.or.us/formslf/PHOS 1/7 3/19/25, 1:32 PM New Submission 1.2 —What kind of business do you operate? 1.3—Are/would there be nonpersonal vehicles associated with your business parked at your home? Yes No 1.4— Does/would operating your business from home save you money compared to operating elsewhere? Q Yes Q No n Unsure Section 2 — Existing Requirements Lake Oswego currently has a number of special use standards that apply to home occupation businesses. Answering the questions below will help the City establish a baseline for how easy the existing requirements are to understand and comply with. The selected standards below are taken directly from the use-specific standards for home occupations within the Lake Oswego Code (50.03.004.1.b.ii). RATING SCALE Strongly Disagree— Disagree— Unsure —Agree — Strongly Agree 1 2 3 4 5 2.1 —The use does not alter the residential character of the neighborhood nor infringe upon the right of residents in the vicinity to the peaceful enjoyment of the neighborhood. (LOC 50.03.004.1.b.ii(1)) I understand what actions I would need to take for my business to comply with this standard.* 1 2 3 4 5 Complying with this requirement is or would be a burden on my business.* 1 2 3 4 5 If there is or would be a burden on your business, please explain: LU 25-0002 ATTACHMENT 1/PAGE 2 OF 7 https://www.ci.oswego.or.us/formslf/PHOS 2/7 3/19/25, 1:32 PM New Submission 2.2— No persons other than family members who reside at the dwelling may be employed or otherwise work in the home occupation, except persons performing housekeeping, yard maintenance, or other domestic services for the dwelling where the business occurs. (LOC 50.03.004.1.b.ii(3)) I understand what actions I would need to take for my business to comply with this standard.* O 1 02 03 04 05 Complying with this requirement is or would be a burden on my business.* O 1 02 03 04 05 If there is or would be a burden on your business, please explain: 2.3— No outside storage of goods or materials other than vegetation. (LOC 50.03.004.1.b.ii(4)) I understand what actions I would need to take for my business to comply with this standard.* O 1 02 03 04 05 Complying with this requirement is or would be a burden on my business.* O 1 02 03 04 05 If there is or would be a burden on your business, please explain: 2.4— No more than 25% of the aggregate floor area on the lot is devoted to nonresidential use, except that an entire dwelling unit or portion thereof may be used for short-term rental lodging; an accessory structure may be used, provided the provisions of this subsection are met. (LOC 50.03.004.1.b.ii(5)) I understand what actions I would need to take for my business to comply with this standard.* O 1 02 03 04 05 Complying with this requirement is or would be a burden on my business.* O 1 02 03 04 05 LU 25-0002 ATTACHMENT 1/PAGE 3 OF 7 https://www.ci.oswego.or.us/formslf/PHOS 3/7 3/19/25, 1:32 PM New Submission If there is or would be a burden on your business, please explain: Section 3 — Potential Replacements The City would like to replace the following language within the existing use-specific standards for home occupations: The[home occupation]use does not alter the residential character of the neighborhood nor infringe upon the right of residents in the vicinity to the peaceful enjoyment of the neighborhood. (LOC 50.03.004.1.b.ii(1)) The above standard is vague and has proven to be difficult to enforce. The City's goal is to replace this language with new standards that capture the ideas of not altering the residential character of a neighborhood nor infringing on a neighbor's peaceful enjoyment of the neighborhood in ways that are more clear, objective, and measurable. The City is interested in your thoughts for how to replace this standard. Please provide your feedback on a few different ideas for new standards, below. Responses from this survey will be used to develop code amendments that will eventually be proposed to the Planning Commission and City Council. Please keep in mind that the questions below are intended to represent higher-level code concepts. More specific code language will be refined based on input from the public, the Planning Commission, and City Council, prior to a public hearing tentatively scheduled for May 28, 2025. 3.1 —Add new limits on the number of people permitted on site at once. For example, a regulation that only 5 clients are permitted at one time. I understand what actions I would need to take for my business to comply with this standard.* O 1 02 03 04 05 Complying with this requirement is or would be a burden on my business.* O 1 02 03 04 05 If there is or would be a burden on your business, please explain: 3.2—Add new limitations on the size of outdoor activities associated with a home occupation. For example, a regulation limiting the amount of square footage that home business activities can occupy outside. I understand what actions I would need to take for my business to comply with this standard.* O 1 02 03 04 05 LU 25-0002 ATTACHMENT 1/PAGE 4 OF 7 https://www.ci.oswego.or.us/formslf/PHOS 4/7 3/19/25, 1:32 PM New Submission Complying with this requirement is or would be a burden on my business.* O 1 02 03 04 05 If there is or would be a burden on your business, please explain: 3.3—Add new limitations on the time of day when outdoor activities associated with a home occupation can occur. For example, a regulation that outdoor activities associated with a home occupation cannot occur between 6pm and 7am. I understand what actions I would need to take for my business to comply with this standard.* O 1 02 03 04 05 Complying with this requirement is or would be a burden on my business.* O 1 02 03 04 05 If there is or would be a burden on your business, please explain: 3.4—Add new limitations on amplified sound and music. For example, a regulation that electric-powered speakers are banned in association with a home occupation. I understand what actions I would need to take for my business to comply with this standard.* O 1 02 03 04 05 Complying with this requirement is or would be a burden on my business.* O 1 02 03 04 05 If there is or would be a burden on your business, please explain: 3.5—Add new limitations on the number of nonpersonal vehicles associated with the home occupation that can be parked outside the home. For example, a regulation that only 1 nonpersonal or commercial vehicle associated with the home occupation is permitted to be parked outside the home. LU 25-0002 ATTACHMENT 1/PAGE 5 OF 7 https://www.ci.oswego.or.us/formslf/PHOS 5/7 3/19/25, 1:32 PM New Submission I understand what actions I would need to take for my business to comply with this standard.* O 1 02 03 04 05 Complying with this requirement is or would be a burden on my business.* O 1 02 03 04 05 If there is or would be a burden on your business, please explain: 3.6—Add new limitations on the hazardous materials associated with the home occupation. For example, a regulation saying that certain hazardous materials are not permitted or limited to a certain amount that can be stored on site. I understand what actions I would need to take for my business to comply with this standard.* O 1 02 03 04 05 Complying with this requirement is or would be a burden on my business.* O 1 02 03 04 05 If there is or would be a burden on your business, please explain: 3.7—Add new limitations on flag lots. For example, regulations that would ban outdoor activity or further limit the number of clients permitted in association with a home occupation on a flag lot. I understand what actions I would need to take for my business to comply with this standard.* O 1 02 03 04 05 Q NA Complying with this requirement is or would be a burden on my business.* O 1 02 03 04 05 Q NA If there is or would be a burden on your business, please explain: LU 25-0002 ATTACHMENT 1/PAGE 6 OF 7 https://www.ci.oswego.or.us/formslf/PHOS 6/7 3/19/25, 1:32 PM New Submission 3.8—Add new limitations on delivery vehicles. For example, a regulation saying deliveries to the home occupation cannot occur if the delivery vehicle would be a large semi-truck. I understand what actions I would need to take for my business to comply with this standard.* 01 02 03 04 05 Complying with this requirement is or would be a burden on my business.* 01 02 03 04 05 If there is or would be a burden on your business, please explain: Section 4 — Feedback Form 4.1 — Do you have any general feedback on this project? Submit Save as Draft LU 25-0002 ATTACHMENT 1/PAGE 7 OF 7 https://www.ci.oswego.or.us/formslf/PHOS 7/7