HomeMy WebLinkAbout2025-07-16 DLCD - HAPO Exemption Decision & Report reon P Development
o Department of Land Conservation&Develo
Tina Kotek,Governor
Housing Accountability&Production Office
'5e 635 Capitol Street NE,Suite 150
Salem,Oregon 97301-2540
Phone:503-373-0050
Fax:503-378-5518
July 16, 2025 www.oregon.gov/LCD
Johanna Hastay, Planning Manager (11 PI""11111 eel ill
I I) A t
PO Box 369
Lake Oswego, OR 97034
Sent via e-mail D L C D HAPO
RE: Review of City of Lake Oswego Exemption Request to Mandatory Adjustments
Dear Johanna,
On March 18,2025,the Housing Accountability and Production Office(HAPO or Office)received an
application from the City of Lake Oswego requesting an exemption to section 38 of Senate Bill 1537
(2024 Session).
Senate Bill 1537 (SB 1537 or the bill)was adopted by the Oregon State Legislature and signed into law in
2024. The bill advances tools that will increase housing production, affordability and choice throughout
Oregon. Section 38 of the bill requires local governments to allow temporary flexibility on specified land
use regulations for qualifying residential developments. Section 39 of the bill allows local governments to
apply to the HAPO for an exemption to section 38. To qualify for an exemption, a local government must
demonstrate that:
(a)The local government reviews requested design and development adjustments for all
applications for the development of housing that are under the jurisdiction of that local
government;
(b)All listed development and design adjustments under section 38 (4)and(5)of this 2024 Act
are eligible for an adjustment under the local government's process; and
(c) One of the following:
(A)Within the previous 5 years the city has approved 90 percent of received adjustment
requests; or
(B) The adjustment process is flexible and accommodates project needs as demonstrated
by testimonials of housing developers who have utilized the adjustment process within
the previous five years.
The Office is required to review and issue a decision approving, approving with conditions, or denying an
exemption request within 120 days of receiving the application. Additionally,the Office is authorized to
establish conditions of approval requiring the city to demonstrate that the city continue to meet the
approval criteria listed in section 39 (2). This decision is final and may not be appealed.
Based on the Office review of the City of Lake Oswego Exemption Request against the applicable review
criteria established in section 39(2), SB 1537(2024), the Office approves the City's exemption request
with seven conditions. Conditions of approval are set forth in Attachment A of this decision. Following
a complaint and investigation by the Office, a finding of non-compliance with the approval criteria
The HAPO is a joint office between the Department of Land Conservation and Development
and the Department of Consumer Business Services, Building Codes Division.
July 16, 2025 Page 2
under section 39(2) or the conditions of approval in this decision will result in a revocation of this
exemption under Section 39(6). This decision expires on the sunset date specified in section 43 of SB
1537—January 2, 2032.
The Office remains committed to partnering with local governments and developers to advance housing
production, affordability, and choice throughout Oregon. Please feel free to contact Rachel Six,Housing
Planner, at rachel.six(&,dlcd.oregon.gov if you have questions or need further assistance.
Sincerely,
J e adsen,Manager, Housing Accountability and Production Office,Department of Land Conservation
d Development(DLCD)
Cc: Brenda Bateman,DLCD
Kelly Reid,DLCD
Andrew Boulton, Department of Consumer and Business Services,Building Codes Division
Joe Buck, City of Lake Oswego
Contents of this Decision
HAPO Review and Decision-making Process 3
Section 39 (2) -Approval Criteria Findings 4
Response to Public Comments 16
Attachment A. Conditions of Approval 17
Attachment B. Required Notice to Applicants 22
July 16, 2025 Page 3
HAPO Review and Decision-making Process
In reviewing and issuing a decision on an application by a local government,the Office will determine
that section 39 (2)(a)and(b) are met if a local government demonstrates, and the Office independently
verifies that:
1. The local government has at least one local process by which all applications for the development
of housing may request design and development adjustments,and
2. For each development and design standard listed in section 38 (4)and(5),there is at least one
pathway by which an applicable standard or standards may be adjusted at least to the amount
required in section 38 anywhere the standard or standards apply to housing,without exception, or
3. If there is an identified circumstance in which housing is not eligible for an adjustment as
described above,the local government has provided sufficient information for the Office to
establish a condition of approval to remedy the deficiency.
Additionally,the Office will determine that section 39(2)(c) is met if the local government demonstrates,
and the Office independently verifies that:
4. Over the previous five years,measured from the application submittal date,the local government
has approved a minimum of 90%of received adjustment requests' (section 39 (2)(c)(A)),or
5. Submitted testimony from housing developers that have utilized the adjustment process within the
previous five years demonstrate the local government's process is flexible and accommodates
project needs(section 39 (2)(c)(B)).
In this case,the City of Lake Oswego submitted information to demonstrate that section 39 (2)(c)(A)is
met.
The Office held a 45-day period to solicit public comment, opened on April 17,2025, and closed on June
1, 2025. Submitted public comments can be accessed on the Flexibilities to Housing Development and
Design Standards Dashboard. The Office will evaluate and provide responses to submitted public
comments in relationship to whether the city meets the approval criteria of section 39 (2). Where
submitted public comments demonstrate that the local government has not sufficiently demonstrated
section 39 (2)is met,the Office will independently verify the accuracy of the provided evidence in
relationship to the approval criteria under section 39 (2).
Where the Office finds that the information and evidence submitted by the local government is
incomplete or inaccurate, or that the application does not sufficiently demonstrate the approval criteria are
met, it will determine that the submitted application does not qualify for an exemption and deny the
application. A local government that receives a denial may submit a new application for review by the
HAPO.
1 An"adjustment request"includes any request for an adjustment as defined in section 38(1)to a development or
design standard under section 38(4)or(5)that is submitted as part of a development application for which the local
government has issued a decision within five calendar years of the application submittal date.An adjustment request
is approved where a local government either approves or approves with conditions a deviation to the applicable
standard and is not approved where a local government denies a deviation to the applicable standard.
July 16, 2025 Page 4
Section 39 (2) - Approval Criteria Findings
§39 (2)(a) The local government reviews requested design and development adjustments for all
applications for the development of housing that are under the jurisdiction of that local
government;
According to the application narrative,the city has six processes2 by which an applicant may
request an adjustment to the development and design standards for the development of housing:
1. Exceptions,Projections and Enhancements: a process that enables deviations to certain
dimensional standards of up to 10%or 15%depending on the adjustment requested. This
process is only available when a proposed partition or subdivision would result in an existing
structure becoming noncompliant with a code regulation and the existing structure was
constructed three or more years prior to the filing of the application for the partition or
subdivision.
2. Planned Development(PD)Overlay: a process that enables deviations to certain zoning
standards for subdivisions. The process is available in any zone for subdivision proposals,
except in the Residential-Low zones (R-15,R-10,R-7.5)the process is only available if at
least one of the following circumstances applies to the property:
a. The property is greater than 75,000 sq. ft. in size;
b. A Resource Protection(RP) district or Habitat Benefit Area(HBA)overlay is located
on the property; or
c. A tree grove greater than 15,000 sq. ft. in size exists on the property.
3. Modification of an Approved Development Permit: a process that enables subsequent
deviations to underlying zone requirements previously modified by a PD overlay for any lots
within a planned development. Modifications are reviewed for compliance with the
applicable PD overlay criteria affected by the requested modification.
4. Minor Variance: a process that enables deviations to certain standards of the code where the
change would have little or no impact on the streetscape or surrounding properties and where
no demonstration of hardship is required. This process is not available to lots within a
planned development to request subsequent modifications to underlying zone requirements
previously modified by the PD overlay process.
5. Design Variances: a process that enables deviation to certain standards in the code where the
resulting design would be superior to development in the surrounding neighborhood or would
better achieve the purpose/objectives of the applicable zone or design district and design
standards.No demonstration of hardship is required. The availability of design variances to
adjust a standard may be dependent on a number of factors including type of housing
proposed,base zone, overlays, and existing physical conditions on the property. The city's
2 The city's application included Sensitive Lands Overlay District Exceptions as an additional process available to
adjust zone and design standards,but did not identify this process as a pathway to adjust any Section 38(4)or(5)
standards.The definition of"adjustment"under SB 1537 does not include"deviations from land use regulations or
requirements related to... statewide land use planning goals relating to natural resources,natural hazards..."(see
Section 38(1)(b)(B)).To the extent the Sensitive Lands Overlay District Exceptions process enables deviations to
such regulations and requirements,such deviations would not be considered"adjustments"for purposes of SB 1537.
July 16, 2025 Page 5
application identified the following classifications of Design Variances as local processes
which allow adjustments to Section 38 (4) and(5)development and design standards:
- Residential Design District(R-DD)—available only in the R-DD zone for exterior
modifications of single-family or middle housing dwellings built before 1960.
- Downtown Redevelopment Design District(DRDD)- available only in the DRDD.
- Lake Grove Village Center Overlay(LGVC)—available only in the LGVC overlay.
- Residential Infill Design(RID)Review: available in residential zones except for
properties located in the R-DD zone or a design district.
With the exception of the RID review, design variances are not available to lots within a
planned development to request subsequent modifications to underlying zone requirements
previously modified by the PD overlay process.
6. Major Variance: a process in which an applicant may request a deviation from certain
standards where owing to special circumstances or conditions beyond the applicant's control,
application of the code standards would result in undue and/or unique hardship. This process
is not available to lots within a planned development to request subsequent modifications to
underlying zone requirements previously modified by the PD overlay process.
The city's code classifies the above processes as"Minor Development Decisions"which is
defined to include development which requires a permit that requires a more discretionary level
of review than a ministerial decision and is intended to include decisions defined as"limited land
use decisions"under ORS 197.015(12).
As noted in greater detail in the findings in section 39(2)(b),the city's application identified the
above pathways contain provisions that result in not all applications for the development of
housing being eligible for an adjustment to all development and design standards listed in section
38 (4) and(5). These are addressed in greater detail later in this determination.While individual
pathways have identified limitations, in combination, as conditioned, all applications for the
development of housing under the jurisdiction of the local government are eligible to request
development and design adjustments for review to the extent specified.
After an exemption is granted, applicants for the development of housing will be entitled to
request all of the adjustments specified in section 38 (4)and(5), and the city will be required to
approve 90%of received adjustment requests in order to continue to meet the approval criteria of
this decision.A practice of discouraging applicants from requesting adjustments under section 38
(4)and(5),where it occurs,would violate a city's obligation to continue to meet the criteria
specified in section 39(2)by:
1. Denying applicants for the development of housing the ability to request adjustments to
specified design and development standards,which as of the effective date of section 38 of SB
1537 will be required through January 2,2032,which affects compliance with section 39 (2)(a)
and(b), and
2. Omitting adjustment requests in a manner that is unmeasurable by the Office,because the city
does not issue a formal decision approving or denying a given adjustment request that is
informally withdrawn or altered,which affects compliance with section 39 (2)(c).
To address this,this decision includes several conditions of approval in Attachment A to ensure
that applicants are notified of their entitlement to request specific adjustments (Condition#1), and
July 16, 2025 Page 16
receive instruction from the city on requesting an adjustment via the local process(Condition#2).
Where adjustment requests are submitted,the city must also inform applicants of the
requirements the city must comply with to maintain an exemption(Condition#4). See
Attachment A for more detail on each condition.
Therefore,this criterion is met.
§39(2)(b)All listed development and design adjustments under section 38(4) and(5)of this 2024
Act are eligible for an adjustment under the local government's process;
Findings are individualized for each development or design standard under section 38 (4) and(5).
Based on the individualized findings for each development or design standard below,the Office
identified several provisions in the code that would render an application for the development of
housing ineligible for an adjustment under the local government's process.
As noted in the finding for section 39 (2)(a),this decision includes several conditions to ensure
applicants for the development of housing are eligible to adjust specified development and design
standards under section 38 (4)or(5)via the city's process. Additionally,this decision includes
conditions to ensure that changes to the city's code do not render development or design
standards ineligible for adjustment(Condition#3). It also ensures that applicants are informed by
the city of their ability to request adjustments for specified development and design standards
(Condition#4). Finally,it ensures that any identified and potential unidentified nonconformities
do not render an applicant ineligible to adjust a development or design standard,by authorizing
the city to apply section 38 directly in those instances (Condition#5). See Attachment A for more
detail on each condition.
§38(4)—Development Standards
§38(4)(a) Side or rear setbacks,for an adjustment of not more than 10 percent.
The city provides six pathways to request an adjustment to this standard: Exceptions,Projections,
and Enhancements,PD Overlay,Modification of an Approved Development Permit,Minor
Variance,Design Variance, and Major Variance.Under the pathways offered by the city, all
applications for the development of housing under the jurisdiction of the local government are
eligible to adjust to this standard to the extent specified,with two exceptions.
First,the city identified that its current code does not allow variances to Special Street Setbacks
(SSS), and that while most SSS apply to front yards, in some instances SSS apply to street side
yards. The city suggests SSS are not required to be eligible for adjustments,because section 38
(1)defines"adjustment"to exclude deviations to some types of land use regulations and
requirements. Specifically, section 38 (1)(b)excludes"[d]eviations from land use regulations or
requirements related to accessibility, affordability, fire ingress or egress, safety,local tree codes,
hazardous or contaminated site clean-up,wildlife protection, or statewide land use planning goals
relating to natural resources,natural hazards,the Willamette River Greenway, estuarine
resources, coastal shorelands,beaches and dunes or ocean resources"and"[d]eviations to
requirements related to the implementation of fire or building codes, federal or state air,water
quality or surface,ground or stormwater requirements, or requirements of any federal, state or
July 16, 2025 Page 17
local law other than a land use regulation."3 The city suggests SSS standards relate to
accessibility and safety, and implementation of water quality or ground and stormwater
requirements, and are therefore not required to be eligible for adjustments.
The Office disagrees that deviations to SSS standards are exempt from the definition of
"adjustment"under Section 38 (1)(b). The city's code identifies the purpose of the SSS is"[t]o
assure an adequate front yard setback is available in the event of possible future street
improvements, such as additional lanes,pedestrian and bicycle facilities,transit facilities,
drainage management improvements, lighting,and street landscaping."Nothing in the purpose
statement indicates the SSS standards effectuate requirements related to the exemptions listed in
Section 38 (1)(b),therefore the Office concludes the SSS standards that apply to side yards are
required to be eligible for an adjustment as provided in Section 38 (4)(a).
Second,the city identified the PD overlay as a pathway for adjusting this standard.As described
in the findings for Section 38 (2)(a), following a PD overlay approval which modified a lot
requirement, subsequent modification of the lot requirement must be processed as either a RID
review variance,to the extent it is available, or as a planned development modification. While the
RID review process allows adjustments to side setbacks,the process is not available in all zones
or in design districts. The modifications process reviews requests for subsequent deviations to lot
standards previously modified by the PD overlay process under the same criteria as the PD
Overlay,therefore any limitations of the PD overlay process apply to requests for subsequent
modifications to the standard. The PD overlay process enables deviations to setback requirements
to the amount specified in Section 38 under some circumstances,however it includes some
limitations which, depending on the development scenario4,potentially result in some lots within
an approved planned development being ineligible for adjustments to the standard to the amount
required under Section 38.
As noted in Condition#5,whenever an applicant for the development of housing is rendered
ineligible to adjust a development or design standard as required by statute,the city must apply
section 38 directly to this standard and notify applicants for the development of housing that they
may request an adjustment in this manner, consistent with Conditions#1 and#2. See Attachment
A for more detail.
While individual pathways have identified limitations, in combination, as conditioned, all
applications for the development of housing under the jurisdiction of the local government are
eligible to adjust this standard to the extent specified. The Office did not otherwise identify any
provisions in the code that would render an application for the development of housing ineligible
for an adjustment under the local government's processes.
§38(4)(b)For an individual development project,the common area,open space or area
that must be landscaped on the same lot or parcel as the proposed housing,for a reduction
of not more than 25 percent.
3 See section 38(1)(b)(B)and(D).
4 Examples of limitations include: side setbacks cannot be reduced to less than eight feet unless separated by a
minimum distance from structures on abutting lots; setbacks for certain perimeter lots may not be reduced if the PD
does not contain separate lots for the dwelling units;rear setbacks for lots that do not abut open space may only be
reduced by the percentage of gross site area that is designated as open space.
July 16, 2025 Page 8
The city provides two pathways to request an adjustment to this standard: Design Variance and
Major Variance. Under the pathways offered by the city, all applications for the development of
housing under the jurisdiction of the local government are eligible to adjust to this standard to the
extent specified. The Office did not identify any provisions in the code that would render an
application for the development of housing ineligible for an adjustment under the local
government's process
§38(4)(c)Parking minimums.
The city does not apply this standard to the development of housing and requirements to adjust
this standard under section 38 do not apply. The Office did not identify any code requirements
applying this standard to the development of housing. Therefore, an exemption to this is neither
requested nor applicable to this decision.
As noted in Condition#3, any changes to the city's development code that establish or apply this
standard to the development of housing must remain eligible for adjustment. See Attachment A
for more detail.
§38 (4)(d)Minimum lot sizes,not more than a 10 percent adjustment, and including not
more than a 10 percent adjustment to lot widths or depths.
The city provides five pathways to request an adjustment to this standard: Exceptions,
Projections, and Enhancements, PD Overlay,Modification of an Approved Development Permit,
Minor Variance, and Major Variance. Under the pathways offered by the city, all applications for
the development of housing under the jurisdiction of the local government are eligible to adjust to
this standard to the extent specified,with one exception:
The city identified the PD overlay as a pathway for adjusting this standard. As described in the
findings for Section 38 (2)(a), following a PD overlay approval which modified a lot requirement,
subsequent modification of the lot requirement must be processed as either RID review variance,
to the extent it is available,or as a planned development modification. The RID review process is
not available to adjust minimum lot size requirements. The modifications process reviews
requests for subsequent deviations to lot standards previously modified by the PD overlay process
under the same criteria as the PD overlay,therefore any limitations of the PD overlay process
apply to requests for subsequent modifications. The PD overlay process enables deviations to
minimum lot size requirements to the amount specified in Section 38 under some circumstances,
however it includes a limitation on lot size reductions in the Residential-Low Zones(R-7.5,R-10,
R-15) if the parcel size is less than 75,000 sq. ft., in which case lot sizes may only be reduced by
the percentage of gross site area designated as open space. Section 39(2)(b)requires the local
processes to allow adjustments to all Section 38 (4) and(5) standards,which include both open
space and minimum lot size. To the extent a request for subsequent modifications to reduce the
minimum lot size would be limited by the percentage of gross site area designated as open space,
depending on the development scenario, some lots may not be eligible for an adjustment to this
standard to the amount required in Section 38.
The city's application also identified a limitation in that variances are prohibited from increasing
the maximum allowable residential density, and therefore a variance to reduce minimum lot size
would not be allowed if the reduction would result in exceeding the maximum dwelling units per
July 16, 2025 Page 19
acre. Unit density maximums are required to be eligible for an adjustment as provided in Section
38 (4)(g)(C)and this limitation is addressed under the findings for Sec 38 (4)(g)(C)below.
The city's application also identified its code includes limitations on maximum floor area which
apply to housing in some circumstances, and that floor area controls massing,the 3-dimensional
product of a building's height and footprint. The city acknowledged adjustments to the maximum
allowed floor area could be processed under one of the city's local processes including major
variances. Floor area standards must be eligible for an adjustment under the local process to
accommodate the adjustments required in section 38 (4)and(5), and failure to do so would be a
violation of section 39 (2).
As noted in Condition#5,whenever an applicant for the development of housing is rendered
ineligible to adjust a development or design standard as required by statute,the city must apply
section 38 directly to this standard and notify applicants for the development of housing that they
may request an adjustment in this manner, consistent with Conditions#1 and#2. See Attachment
A for more detail.
While individual pathways have identified limitations,in combination, as conditioned, all
applications for the development of housing under the jurisdiction of the local government are
eligible to adjust this standard to the extent specified. The Office did not otherwise identify any
provisions in the code that would render an application for the development of housing ineligible
for an adjustment under the local government's processes.
§38(4)(e)Maximum lot sizes,not more than a 10 percent adjustment,including not more
than a 10 percent adjustment to lot width or depths and only if the adjustment results in:
(A)More dwelling units than would be allowed without the adjustment; and(B)No
reduction in density below the minimum applicable density.
The city does not apply this standard to the development of housing and requirements to adjust
this standard under section 38 do not apply. The Office did not identify any code requirements
applying this standard to the development of housing. Therefore, an exemption to this is neither
requested nor applicable to this decision.
As noted in Condition#3, any changes to the city's development code that establish or apply this
standard to the development of housing must remain eligible for adjustment. See Attachment A
for more detail.
§38(4)(f)Building lot coverage requirements for up to a 10 percent adjustment.
The city provides five pathways to request an adjustment to this standard: Exceptions,
Projections, and Enhancements, PD Overlay,Modification of an Approved Development Permit,
Design Variance, and Major Variance. Under the pathways offered by the city, all applications
for the development of housing under the jurisdiction of the local government are eligible to
adjust to this standard to the extent specified,with one exception:
The city identified the PD overlay as a pathway for adjusting this standard. As described in the
findings for Section 38 (2)(a), following a PD overlay approval which modified a lot requirement,
subsequent modification of the lot requirement must be processed as either a RID review
variance,to the extent it is available, or as a planned development modification. While the RID
review process allows adjustments to lot coverage requirements,the process is not available in all
July 16, 2025 Page 110
zones or in design districts. The modifications process reviews requests for subsequent deviations
to lot standards previously modified by the PD overlay process under the same criteria as the PD
overlay,therefore any limitations of the PD overlay process apply to requests for subsequent
modifications. The PD Overlay process includes limitations5 which, depending on the
development scenario,potentially result in nonconformance with Section 39 (2)(b).
The city's application also identified its code's limitations on maximum floor area apply to
housing under some circumstances, and that floor area controls massing,the 3-dimensional
product of building height and footprint. The city's application acknowledged adjustments to the
maximum allowed floor area could be processed under one of the city's local processes including
major variances. Floor area standards must be eligible for an adjustment under the local process
to accommodate the adjustments required in section 38 (4)and(5), and failure to do so would be
a violation of section 39 (2).
As noted in Condition#5,whenever an applicant for the development of housing is rendered
ineligible to adjust a development or design standard as required by statute,the city must apply
section 38 directly to this standard and notify applicants for the development of housing that they
may request an adjustment in this manner, consistent with Conditions#1 and#2. See Attachment
A for more detail.
While individual pathways have identified limitations,in combination, as conditioned, all
applications for the development of housing under the jurisdiction of the local government are
eligible to adjust this standard to the extent specified. The Office did not otherwise identify any
provisions in the code that would render an application for the development of housing ineligible
for an adjustment under the local government's processes.
§38(4)(g)(A)(i)6 Requirements for bicycle parking that establish the minimum number of
spaces for use by the residents of the project,provided the application includes at least one-
half space per residential unit;
The city provides two pathways to request an adjustment to this standard: Design Variance and
Major Variance. Under the pathways offered by the city, all applications for the development of
housing under the jurisdiction of the local government are eligible to adjust to this standard to the
extent specified. The Office did not identify any provisions in the code that would render an
application for the development of housing ineligible for an adjustment under the local
government's process
§38(4)(g)(A)(ii)Requirements for bicycle parking that establish the location of the spaces,
provided that lockable,covered bicycle parking spaces are within or adjacent to the
residential development;
5 Limitations of the PD overlay process include the aggregate lot coverage for all of the lots shall not exceed the
maximum lot coverage based on the net developable area of the project,and the total floor area of all lots shall not
exceed the aggregate of the floor areas as determined by the respective lot area and floor area methodology required
by the zone.
6 Adjustments to development standards under§38(4)(g)only apply to manufactured dwelling parks,middle
housing as defined in ORS 197A.420,multifamily housing and mixed-use residential housing.
July 16, 2025 Page 111
The city provides two pathways to request an adjustment to this standard: Design Variance and
Major Variance. Under the pathways offered by the city, all applications for the development of
housing under the jurisdiction of the local government are eligible to adjust to this standard to the
extent specified. The Office did not identify any provisions in the code that would render an
application for the development of housing ineligible for an adjustment under the local
government's process
§38 (4)(g)(B)For uses other than cottage clusters, as defined in ORS 197A.420 (1)(c)(D),
building height maximums that: (i)Are in addition to existing applicable height bonuses,if
any; and(ii)Are not more than an increase of the greater of: (I) One story; or(II)A 20
percent increase to base zone height with rounding consistent with methodology outlined in
city code,if any;
The city provides three pathways to request an adjustment to this standard: Exceptions,
Projections, and Enhancements,Design Variance, and Major Variance.Under the pathways
offered by the city, all applications for the development of housing under the jurisdiction of the
local government are eligible to adjust to this standard to the extent specified,with one exception:
The city's application identified a 50-foot height limit for all structures in residential zones per
City Charter Chapter X, Section 46A,which is not currently eligible for an adjustment under the
local process. This means the above processes would not allow an adjustment to maximum
building height of one story or 20%of the base zone height,the amount specified under Section
38, if the resultant height would exceed the 50-foot limitation.
The city's application also identified its code's limitations on maximum floor area apply to
housing under some circumstances, and that floor area controls massing,the 3-dimensional
product of building height and footprint. The city's application acknowledged adjustments to the
maximum allowed floor area could be processed under one of the city's local processes including
major variances. Floor area standards must be eligible for an adjustment under the local process
to accommodate the adjustments required in section 38 (4)and(5), and failure to do so would be
a violation of section 39 (2).
As noted in Condition#5,whenever an applicant for the development of housing is rendered
ineligible to adjust a development or design standard as required by statute,the city must apply
section 38 directly to this standard and notify applicants for the development of housing that they
may request an adjustment in this manner, consistent with Conditions#1 and#2. See Attachment
A for more detail.
While individual pathways have identified limitations, in combination, as conditioned, all
applications for the development of housing under the jurisdiction of the local government are
eligible to adjust this standard to the extent specified. The Office did not otherwise identify any
provisions in the code that would render an application for the development of housing ineligible
for an adjustment under the local government's processes.
§38 (4)(g)(C)Unit density maximums,not more than an amount necessary to account for
other adjustments under this section; and
As noted in the city's application,variances are not allowed to increase the allowable residential
density in any zoning district. (LOC 50.08.001.2.b)This limitation applies to Minor Variances,
July 16, 2025 Page 112
Design Variances and Major Variances. This limitation renders some applications for the
development of housing ineligible to request adjustments to Section 38 (4)and(5) standards,
because any adjustment to a Section 38 (4)or(5) standard which increases the number of
dwelling units or reduces the square footage of a development site could potentially result in
exceeding the maximum density of a zone. In order to meet Section 39(2)(b),the local process
must allow for an adjustment to the amount required under Section 38 (4)(g)(C),meaning that
maximum density must be eligible for an adjustment of"an amount necessary to account for
other adjustments under this section"when maximum density applies to manufactured dwelling
parks,middle housing,multi-unit, and mixed-use residential housing developments.
As noted in Condition#5,whenever an applicant for the development of housing is rendered
ineligible to adjust a development or design standard as required by statute,the city must apply
section 38 directly to this standard and notify applicants for the development of housing that they
may request an adjustment in this manner, consistent with Conditions#1 and#2. See Attachment
A for more detail.
§38(4)(g)(D)(i)Prohibitions,for the ground floor of a mixed-use building, against
residential uses except for one face of the building that faces the street and is within 20 feet
of the street; and
The city provides two pathways to request an adjustment to this standard: Design Variance and
Major Variance. Under the pathways offered by the city, all applications for the development of
housing under the jurisdiction of the local government are eligible to adjust to this standard to the
extent specified. The Office did not identify any provisions in the code that would render an
application for the development of housing ineligible for an adjustment under the local
government's process.
§38 (4)(g)(D)(ii)Prohibitions,for the ground floor of a mixed-use building, against
nonresidential active uses that support the residential uses of the building,including
lobbies,day care,passenger loading,community rooms,exercise facilities, offices, activity
spaces or live-work spaces,except for active uses in specifically and clearly defined mixed
use areas or commercial corridors designated by local governments.
The city provides two pathways to request an adjustment to this standard: Design Variance and
Major Variance. Under the pathways offered by the city, all applications for the development of
housing under the jurisdiction of the local government are eligible to adjust to this standard to the
extent specified. The Office did not identify any provisions in the code that would render an
application for the development of housing ineligible for an adjustment under the local
government's process.
§38 (5)—Design Standards
§38 (5)(a)Facade materials,color or pattern.
The city provides two pathways to request an adjustment to this standard: Design Variance and
Major Variance. Under the pathways offered by the city, all applications for the development of
housing under the jurisdiction of the local government are eligible to adjust to this standard to the
extent specified. The Office did not identify any provisions in the code that would render an
July 16, 2025 Page 13
application for the development of housing ineligible for an adjustment under the local
government's process.
§38 (5)(b)Facade articulation.
The city provides three pathways to request an adjustment to this standard: Minor Variance,
Design Variance, and Major Variance. Under the pathways offered by the city, all applications
for the development of housing under the jurisdiction of the local government are eligible to
adjust to this standard to the extent specified. The Office did not identify any provisions in the
code that would render an application for the development of housing ineligible for an adjustment
under the local government's process.
§38 (5)(c)Roof forms and materials.
The city provides three pathways to request an adjustment to this standard: Minor Variance,
Design Variance, and Major Variance. Under the pathways offered by the city, all applications
for the development of housing under the jurisdiction of the local government are eligible to
adjust to this standard to the extent specified. The Office did not identify any provisions in the
code that would render an application for the development of housing ineligible for an adjustment
under the local government's process.
§38 (5)(d)Entry and garage door materials.
The city provides two pathways to request an adjustment to this standard: Design Variance and
Major Variance. Under the pathways offered by the city, all applications for the development of
housing under the jurisdiction of the local government are eligible to adjust to this standard to the
extent specified. The Office did not identify any provisions in the code that would render an
application for the development of housing ineligible for an adjustment under the local
government's process.
§38 (5)(e)Garage door orientation,unless the building is adjacent to or across from a
school or public park.
The city provides two pathways to request an adjustment to this standard: Design Variance and
Major Variance. Under the pathways offered by the city, all applications for the development of
housing under the jurisdiction of the local government are eligible to adjust to this standard to the
extent specified. The Office did not identify any provisions in the code that would render an
application for the development of housing ineligible for an adjustment under the local
government's process.
§38 (5)(f)Window materials,except for bird-safe glazing requirements.
The city provides two pathways to request an adjustment to this standard: Design Variance and
Major Variance. Under the pathways offered by the city, all applications for the development of
housing under the jurisdiction of the local government are eligible to adjust to this standard to the
extent specified. The Office did not identify any provisions in the code that would render an
July 16, 2025 Page 14
application for the development of housing ineligible for an adjustment under the local
government's process.
§38(5)(g) Total window area,for up to a 30 percent adjustment,provided the application
includes at least 12 percent of the total facade as window area.
The city provides two pathways to request an adjustment to this standard: Design Variance and
Major Variance. Under the pathways offered by the city, all applications for the development of
housing under the jurisdiction of the local government are eligible to adjust to this standard to the
extent specified. The Office did not identify any provisions in the code that would render an
application for the development of housing ineligible for an adjustment under the local
government's process.
§38 (5)(h)(A)7 Building orientation requirements,not including transit street orientation
requirements.
The city provides three pathways to request an adjustment to this standard: Minor Variance,
Design Variance, and Major Variance. Under the pathways offered by the city, all applications
for the development of housing under the jurisdiction of the local government are eligible to
adjust to this standard to the extent specified. The Office did not identify any provisions in the
code that would render an application for the development of housing ineligible for an adjustment
under the local government's process.
§38(5)(h)(B)Building height transition requirements, not more than a 50 percent
adjustment from the base zone.
The city provides two pathways to request an adjustment to this standard: Design Variance and
Major Variance. Under the pathways offered by the city, all applications for the development of
housing under the jurisdiction of the local government are eligible to adjust to this standard to the
extent specified. The Office did not identify any provisions in the code that would render an
application for the development of housing ineligible for an adjustment under the local
government's process.
§38(5)(h)(C)Requirements for balconies and porches.
The city provides two pathways'to request an adjustment to this standard: Design Variance and
Major Variance. Under the pathways offered by the city, all applications for the development of
housing under the jurisdiction of the local government are eligible to adjust to this standard to the
extent specified. The Office did not identify any provisions in the code that would render an
7 Adjustments to design standards under§ 38(5)(h)only apply to manufactured dwelling parks,middle housing as
defined in ORS 197A.420,multifamily housing and mixed-use residential housing.
s The city's application also identified the Minor Variance as a third pathway for adjusting this standard to the extent
it allows deviations to yard setback requirements,which could accommodate construction of a required balcony or
porch.Reducing setbacks to accommodate the required construction of a balcony or porch is not an adjustment to
the applicable requirement for balconies or porches,therefore this is not an available pathway to adjust this standard.
July 16, 2025 Page 115
application for the development of housing ineligible for an adjustment under the local
government's process.
§38 (5)(h)(D)Requirements for recesses and offsets.
The city provides three pathways to request an adjustment to this standard: Minor Variance,
Design Variance, and Major Variance. Under the pathways offered by the city, all applications
for the development of housing under the jurisdiction of the local government are eligible to
adjust to this standard to the extent specified. The Office did not identify any provisions in the
code that would render an application for the development of housing ineligible for an adjustment
under the local government's process.
§39 (2)(c)(A)Within the previous 5 years the city has approved 90 percent of received adjustment
requests;
To demonstrate approval with this criterion,the city submitted a spreadsheet documenting the
city's five-year permit history. The five-year permit history must demonstrate at least a 90
percent approval rate of received adjustment requests. Consistent with HAPO's guidance,the
Office will deny or revoke an exemption request upon finding the city demonstration includes
false or incomplete information.
The submitted spreadsheet includes a total of 108 adjustment requests as part of 75 applications
for which the city has issued a decision. The spreadsheet indicates that the city has approved
100%of received adjustment requests. To verify the accuracy of permit information submitted,
the Office requested three randomly-selected permits for review, including:
1. LU 21-0041
2. LU 22-0059
3. LU 24-0028
Based on the Office's review of these permits,the Office did not identify any reporting
inaccuracies or omission that would suggest the city's five-year permit history is inaccurate.
§39(2)(c)(B) The adjustment process is flexible and accommodates project needs as demonstrated
by testimonials of housing developers who have utilized the adjustment process within the previous
five years.
The local government has submitted materials to demonstrate that(2)(c)(A)is met. Therefore,
this criterion does not apply.
July 16, 2025 Page 116
Response to Public Comments
The Office held a 45-day period to solicit public comment, opened on April 17,2025 and closed on June
1, 2025. Submitted public comments can be accessed on the Flexibilities to Housing Development and
Design Standards Dashboard. In total,the Office received one public comment in relationship to this
exemption request. The findings below summarize received public comments and evaluate their
relationship to the approval criteria of section 39 (2).
The one public comment opposed the exemption due to the fact that surrounding cities in the Metro
region are not exempt from the section 38 mandatory adjustments, so an exemption for the city results in
inconsistency in standards across the region. The comment also asserted that the city's code is excessively
complex and restrictive, including building height restrictions even with adjustments,which causes
difficulty in building housing. The comment also asserted the city has a history of constraining building
and has added fewer affordable homes than other nearby cities.
The section 39 exemption approval criteria do not include requirements related to surrounding cities'
processes for adjusting development and design standards or the complexity of a city's code. Section 39
(2)(a)and(b)criteria require that the city has at least one local process for requesting adjustments to all
development and design standards listed in section 38 of SB 1537 everywhere those standards apply to
housing. Where a city's application identifies a deficiency in the local process' ability to allow
adjustments as required under section 39, such as a restriction on maximum building height which is
ineligible for an adjustment, an exemption may be approved with a condition that the city will apply the
section 38 mandatory adjustment process directly to applications for housing which are ineligible for the
required adjustment under the local processes. Any restrictions on building height must be adjustable to
the extent required in statute and Condition#5 details how the city can comply with statute when faced
with potential noncompliance.A city's history of building housing may be relevant to the approval
criteria in section 39(2)(c),which requires the city to either have approved 90%of received adjustment
requests within the previous 5 years (section 39 (2)(c)(A)), or that the city's adjustment process is flexible
and accommodates project needs as demonstrated by the testimonial of housing developers who have
utilized the adjustment process within the previous five years(section 39(2)(c)(B)). In this case the city
submitted materials to demonstrate that within the previous 5 years the city has approved 90%of received
adjustment requests.
July 16, 2025 Page 117
Attachment A. Conditions of Approval
Section 39 (4) authorizes the HAPO to establish conditions of approval for any granted exemption. The
conditions of approval must ensure that a city continues to meet the approval criteria outlined in section
39 (2). These conditions are organized by subsection.
Under section 39 (6),the Office may revoke an exemption in response to a complaint and following an
investigation if the Office determines that the local government is:
(a)Not approving adjustments as required by the local process or the terms of the exemption;
(b)Engaging in a pattern or practice of violating housing-related statutes or implementing
policies that create unreasonable cost or delays to housing production under ORS 197.320
(13)(a); or
(c)Failing to comply with conditions of approval adopted under subsection(4)of this section.
For the City of Lake Oswego to maintain the exemption granted by this decision,the city must both
process and grant adjustments as required in section 39 (2) and comply with the conditions set forth in
this section. Following a complaint and investigation by the Office, a finding of noncompliance with any
of the terms or requirements outlined in this section will result in a revocation of the city's exemption
approval. These conditions apply until the expiration of this decision,the withdrawal of the exemption
approval by the city,or the revocation of this decision under section 39 (6).
Section 39 (2)(a)
Condition#1—Required notice to existing and prospective applicants for the development of
housing.
The city must provide the notice on Attachment B to all existing and prospective applicants for
the development of housing. This notice informs applicants of their legal entitlement to request
adjustments to design or development standards as well as the obligation by the city to review and
approve adjustments consistent with section 39 (2)(a)and(b). This notice, combined with
Condition#2 below, also fulfills the City's obligation to clearly and consistently notify existing
and prospective applicants under section 39 (5). The city may not edit or modify the notice in a
manner that would render it nonconforming with section 39 (5).
For the purposes of this condition, an"existing applicant"is the primary point of contact for any
building permit or a quasi-judicial, limited or ministerial land use decision related to the
development of housing where a decision has not yet been issued, including both complete and
incomplete applications that have been submitted to the city as of the date of this exemption
approval. The city must deliver the notice directly to existing applicants in either a written(e.g.
mail)or electronic format(e.g. email). Indirect delivery methods, such as publication of the
notice on a webpage or via a public meeting, does not satisfy this condition.
A"prospective applicant"is any recipient of an application form for a building permit or a quasi-
judicial, limited or ministerial land use decision related to the development of housing, including
any preapplication review or assistance services offered by the city. To notify prospective
applicants,the city must provide the notice directly to prospective applicants in either a written
(e.g.paper form)or electronic format(e.g. online form). The notice may be appended to existing
application forms relating to the development of housing to satisfy this condition. Indirect
delivery methods, such as publication of the notice on a webpage or via a public meeting,does
not satisfy this condition.
July 16, 2025 Page 118
Condition#2—Publicly-available instructions to request adjustments via a local process.
In addition to the notice provided to existing and prospective applicants for the development of
housing in Condition#1,the city must provide publicly-available instructions to existing and
prospective applicants that describe how an applicant may request an adjustment to development
and design standards specified in section 38 (4)and(5)via a local process or processes. These
instructions must also inform applicants of the applicable approval criteria for the adjustment
application. These instructions,combined with Condition#1 above, also fulfills the City's
obligation to clearly and consistently notify existing and prospective applicants under section 39
(5).
These instructions may be published on a webpage or as a standalone document,provided the city
share instructions to existing and prospective applicants on how to access these instructions free
of charge. These instructions must also be readily available in the same physical or virtual
location where applicants access the development code; for example, if the city links to the
development code on a webpage,that same webpage must include a link to the instructions to
request adjustments.
The instructions must articulate each pathway by which an applicant may request an adjustment
for the development and design standards to the extent required in section 38 (4)and(5). Where
the city employs more than one process to enable an adjustment,the city must outline instructions
for each pathway, including how an applicant may request an adjustment and the standards for
approval of an adjustment up to the extent required in section 38 (4)and(5). The instructions
must include the applicable criteria for the adjustment application.
The instructions must also include clear instructions by which an applicant may apply the statute
directly under Condition#5. Additionally,where a city's local process(es)or approval criteria are
amended(see Condition#3),the city must update the provided instructions to accurately reflect
amendments to the local process(es) or approval criteria.
Section 39 (2)(b)
Condition#3—Changes to the city development code
With the conditions specified in this decision,the city meets the requirement to review requested
adjustments to development and design standards to the extent required in section 38 (4) and(5).
In anticipation of future potential amendments to the city development code,the city may not
amend the code in a manner that would render any applications for the development of housing
ineligible to adjust one or more development or design standards to the extent required in section
38 (4) and(5). This includes development or design standards that the city does not apply and did
not request an exemption for, if any.
If the city amends the development code in a manner that would apply or expand development or
design standards to residential development,those standards must remain eligible for an
adjustment to the extent required in section 38 (4)or(5). If a newly adopted and applied standard
is rendered ineligible for an adjustment under the local process due to a development code
amendment,the city must apply section 38 directly for that standard(see Condition#5)and notify
applicants for the development of housing that they may request an adjustment in this manner,
(see Conditions#1 and 2).
July 16, 2025 Page 119
Condition#4—Eligibility of existing and prospective applicants for the development of housing to
request adjustments to development and design standards under section 38(4) or(5).
Under this decision, all existing and prospective applicants for the development of housing are
eligible to request one or more adjustments to development or design standards to the extent
specified in section 38 (4)or(5). As documented in Conditions#1 and#2,the city must notify
existing and prospective applicants of their eligibility to request adjustments via a local process or
processes and provide instructions on the approval criteria and process to receive an adjustment.
In addition to these requirements,where an applicant for the development of housing requests an
adjustment to one or more standards that are eligible for adjustment under section 38 (4) or(5),
the city has an affirmative obligation to inform the applicant of the applicable terms of the
exemption that the city must comply with to maintain the exemption. This includes:
1. The applicant is eligible to request one or more adjustments to development or design
standards to the extent specified under section 38 (4)or(5)via a local process or processes.
2. The city's basis for approval or denial of the requested adjustment are the approval criteria set
forth in the city's development code.
3. The city must provide publicly-available instructions documenting pathways to request
adjustments and applicable approval criteria for adjustments(see Condition#2)
4. How an applicant may successfully demonstrate the criteria for adjustment are met, including
any relevant information the applicant must provide for the city to issue a decision.
5. The city must maintain an adjustment approval rate of 90%as measured over a five-year
period. The city's approval rate will be measured on an annual basis by the Housing
Accountability and Production Office.
6. Applicants may report suspected violations of housing law, including suspected violations of
the terms of the exemption,to the Housing Accountability and Production Office.
The city may fulfill this obligation prior to the submittal of an adjustment request, such as in
preapplication review or assistance or in response to inquiries or questions from applicants prior
to application submittal. Where an application is submitted without opportunity to convey the
information in this condition,the city may provide this information via follow-up correspondence
with the applicant, such as a notice of application receipt or a completeness determination. This
information must be provided before an application is determined to be complete.
This information may be provided in both written and verbal formats,provided the city follows
up on verbal correspondence with a written confirmation that the information required in this
condition has been conveyed to the applicant.
Nothing in this condition prevents the city from applying the local approval process or processes
for adjustment identified in this decision.Additionally,nothing in this condition prevents the city
from informing an applicant about the risk of denial for failure to meet applicable adjustment
approval criteria. The city is encouraged to work with applicants to address identified
development and design barriers that impact housing production, including through the use of
adjustments.
July 16, 2025 Page 120
This condition does not apply to development or design standards that are not specified in section
38 (4) or(5),nor does it apply to adjustments beyond the extent required in section 38 (4) or(5).
Additionally,this condition does not extend beyond the statutory definition of"adjustment"in
section 38 (1); for example, a city is not required to allow a use that is otherwise not allowed in a
given zone, as this is not defined as an"adjustment"under section 38 (1)(b)(A)9.
Condition#5—Addressing nonconformity with section 39(2)(b)
After an exemption is granted, a city must continue to comply with the approval criteria in section
39 (2),which means that all applicants for the development of housing must be eligible to adjust
any and all of the development and design standards under section 38 (4)and(5). Any instance in
which an applicant for the development of housing is rendered ineligible for requesting a
statutorily-required adjustment is nonconforming with respect to section 39 (2).
As stated in the findings for Section 39 (2)(b),the city's local processes do not provide a pathway
for all applicants for the development of housing to be eligible to adjust any and all of the
development and design standards under section 38 (4)and(5).With the acknowledgement that
the Office cannot predict every potential development scenario, it is possible that a future
scenario could arise in which an applicant for the development of housing is rendered ineligible
to adjust a development or design standard as required by statute.
When an applicant for the development of housing is rendered ineligible to adjust a development
or design standard as required by statute,the city must maintain conformance with section 39
(2)(b). The city may conform via the direct application of section 38 for the standard or standards
rendered ineligible for adjustment via the local process. If the Office produces a future model
code implementing section 38,the city may also elect to apply this model code for this same
purpose.As stated under Condition#2,the city is obligated to inform applicants that they can
directly apply section 38 for the standards rendered ineligible via the local process.
Nothing in this condition otherwise prohibits the city from applying the local process or processes
for adjustment,nor does it prohibit the city from adopting future amendments to code to address
any identified nonconformity with section 39 (2).
Section 39 (2)(c)
Condition#6—Required annual reporting to the HAPO
The city has submitted permitting information over the previous five years to demonstrate that
section 39 (2)(c)(A)is met. The city must continue to approve 90%of received adjustment
requests over any five-year period after this exemption is granted,as outlined in Condition#7
below. To demonstrate continuing compliance with section 39(2)(c),the city must annually
submit the same report that is required of cities under section 41 of SB 1537.
9 Note: For the purposes of this decision,adjustments to prohibitions on residential and nonresidential active uses on
the ground floor of a mixed-use building as required under section 38(4)(g)(D)does not constitute a use of property
not otherwise permissible under applicable zoning requirements and is an"adjustment".
July 16, 2025 Page 121
This report must be provided to DLCD and the HAPO at the same deadlines and format for
required reporting under ORS 197A.110. This report must include all adjustment requests to
development and design standards under section 38 (4)or(5)that the city received,then issued a
decision for over the previous calendar year. This information will be the basis for the HAPO to
annually assess the approval rate of requested adjustments as described in Condition#7.
Consistent with this decision, an"adjustment request"includes any request for an adjustment as
defined in section 38 (1)to a development or design standard under section 38 (4)or(5)that is
submitted as part of a development application for which the local government has issued a
decision within the reporting period.An adjustment request is approved where a local
government either approves or approves with conditions a deviation to the applicable standard
and is not approved where a local government denies a deviation to the applicable standard.
DLCD must issue an annual notice to cities informing applicable cities of the deadlines and
instructions to complete required reporting under ORS 197A.110; this notice and format for
reporting will be modified to similarly provide clear deadlines and instructions for completing
reporting for requested adjustments under section 41. Failure by DLCD to issue a notice or
provide a format with instructions for reporting on requested adjustments does not constitute a
failure by the city to comply with this condition.
Condition#7-Maintain compliance with section 39 (2)(c)
The city must continue to grant at least 90%of received adjustment requests over the previous
five years in order to comply with section 39 (2)(c)(A) and maintain the exemption granted by
this decision. The five-year period will be benchmarked to the reporting period described in
Condition#6 and reviewed annually by the HAPO.
July 16, 2025 Page 122
Attachment B. Required Notice to Applicants
The City of Lake Oswego must deliver this notice to all existing and prospective applicants for the
development of housing within the city.Failure to issue this notice or comply with the terms
outlined in this notice are a violation of state law and can be reported to the Housing Accountability
and Production Office(HAPO) at this intake form:
https://www.oregon.gov/lcd/HAPO/Pages/Inquiries-and-Complaints.aspx
Eligible Development and Design Flexibilities
The City of Lake Oswego must allow any applicant for the development of housing to request flexibility10
to any standards in the following table. The applicant is eligible to request flexibility to one or more
standards on this table. In order to continue utilizing a local process for adjustments to housing
development and design standards in lieu of a state-prescribed process under Senate Bill 1537,the city is
required to approve 90%of received requests from this table. Each row counts as one request, even where
a request contains multiple components within that category(rows continue on the following page).
Development or Design Standard Required Eligible Adjustment Amount
Side or rear setbacks Must allow an adjustment up to 10%of required setback distance.
For an individual development project,common
area,open space or area that must be landscaped Must allow a reduction up to 25%
on the same lot or parcel as proposed housing
Parking minimums Must be eligible for a full adjustment
Minimum lot sizes Must allow an adjustment up to 10%,and including up to a 10%adjustment to
lot widths or depths
Must allow an adjustment up to 10%,including up to a 10%adjustment to lot
Maximum lot sizes widths or depths,if the adjustment results in more dwelling units than would be
allowed without adjustment,and the adjustment does not result in reduction of
density below the minimum applicable density
Building lot coverage Must allow an adjustment up to 10%
Must allow an adjustment to the minimum number of spaces for use by
*Bicycle parking(minimum spaces) residents,provided the application includes at least one-half space per
residential unit
Must allow an adjustment to the location of bike parking spaces,provided
*Bicycle parking(location) lockable,covered bike parking spaces are within or adjacent to the residential
development
*Buildingheight maximums(excludingcottage Must allow an adjustment in addition to any existing applicable height bonuses;
g Must allow an adjustment up to the greater of one story or 20/o of the base
clusters) zone height
*Unit density maximums Must allow an amount necessary to account for other requested adjustments in this
table
*Prohibitions on ground floors of mixed use
buildings against residential uses Must be eligible for a full adjustment
except for one face of the building facing the
street&within 20 ft of the street
*Prohibitions on ground floors of mixed use
buildings against nonresidential active uses that Must be eligible for a full adjustment
support the residential uses of the building
Facade materials,color or pattern Must be eligible for a full adjustment
Facade articulation Must be eligible for a full adjustment
Roof forms and materials Must be eligible for a full adjustment
10 These flexibilities are referred to as"adjustments"in SB 1537.An adjustment is defined as"a deviation from an
existing land use regulation".
July 16, 2025 Page 123
Development or Design Standard Required Eligible Adjustment Amount
Entry and garage door materials Must be eligible for a full adjustment
Garage door orientation unless adjacent to or Must be eligible for a full adjustment
across from school/public park
Window materials except bird-safe glazing
requirements Must be eligible for a full adjustment
Total window area Must allow up to 30%adjustment if application includes at least 12%of total
façade as window area
*Building orientation requirements,not Must be eligible for a full adjustment
including transit street orientation requirements
*Building height transition requirements Must allow up to 50%adjustment from the base zone
*Requirements for balconies and porches Must be eligible for a full adjustment
*Requirements for recesses and offsets Must be eligible for a full adjustment
*Only applicable to manufactured dwelling parks, middle housing, multi-unit, and mixed use residential.
City's Requirements for Mandatory Adjustments
Senate Bill 1537 (2024)advances tools that will increase housing production, affordability and choice.
This includes a requirement for cities to allow temporary flexibility on specified land use regulations for
qualifying residential developments". The City of Lake Oswego received approval for an exemption that
allows the city to apply a local process to grant flexibility to local design and development standards
instead of a state-prescribed process. To maintain this exemption,the city must:
1. Provide and clearly communicate all local processes by which any existing or prospective
applicant for the development of housing under the jurisdiction of the city may request flexibility
on design and development standards.
2. Allow any applicant for the development of housing to request flexibility on the specific design
and development standards up to the amount specified in the table above via the applicable local
process,and
3. At a minimum, approve 90%of adjustment requests submitted to the city within the previous five
years. This percentage will be reviewed annually when the city submits required reporting to the
HAPO.
4. Allow any applicant rendered ineligible to request an adjustment via the local process to directly
apply section 38 for the standard or standards rendered ineligible.
Following a complaint and investigation by the Office, a finding of non-compliance with these criteria
will result in a revocation of the exemption. The city would then be required to apply the state-prescribed
adjustment process per Section 38 of Senate Bill 1537. Suspected violations can be reported to the HAPO
at this intake form: https://www.oregon.gov/lcd/HAPO/Pages/Inquiries-and-Complaints.aspx
Learn more about HAPO, Senate Bill 1537,and Mandatory Adjustments at:
About HAPO: https://www.orcgon.gov/lcd/Housing/Pages/Housing-Accountability-and-Production-
Office.aspx
Mandatory Adjustments—Overview for Housing Developers:
https://www.oregon.gov/lcd/Housing/Documents/20250306_HAPO_MandatoryAdjustments_OnePager.p
df
" See Section 38,Senate Bill 1537(2024 Session).
July 16, 2025 Page 124
Mandatory Adjustment Technical Summary:
https://www.oregon.gov/lcd/Housing/Documents/Mandatory Adjustments Summary.pdf
Flexibilities to Housing Development and Design Standards Dashboard:
https://geo.maps.arcgis.com/apps/dashboards/04337d63 78a24ba5b9bb6c9f7f5b3 c9c
HAPO Inquiries and Complaints Intake Form:
https://www.oregon.gov/lcd/HAPO/Pages/Inquiries-and-Complaints.aspx
Review the HAPO's Final Decision:
https://www.oregon.gov/lcd/Housing/Mandatory%20Adjustments/20250716_Lake_Oswego_Decision_M
andatory_Adjustment Exemption.pdf