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HomeMy WebLinkAboutAgenda Item - 2025-10-07 - Number 12.2 - Home Occupation Standards - Study Session 12.2 ..‘'k 0 COUNCIL REPORT V —w 0 GREGo Subject: Home Occupation Code Update Study Session #2 (LU 25-0002) Meeting Date: October 7, 2025 Staff Member: Michael McNamee, Associate Planner Report Date: September 26, 2025 Department: Community Development 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 more clear, objective, and enforceable at their meeting on June 18, 2024. The Council held a study session on this project in April 2025. Staff Recommendation: Provide direction on code concepts to update the City's Home Occupation and Use 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 more clear and objective regulations to assure consistent application and ease of enforcement. ❑Council Goals/Priorities ❑Adopted Master Plan(s) ❑X Not Applicable ISSUE BEFORE COUNCIL Provide direction to staff on certain code concepts to update the City's Home Occupation and Use standards before amendments are presented to the Planning Commission for a public hearing. Respect cv el'erce. Trust. Se-iv 503-635-0215 380 A AVENUE PO BOX 369 LAKE OSWEGO, OR 97034 WWW.LAKEOSWEGO.CITY Page 2 EXECUTIVE SUMMARY This project would replace subjective Home Occupation standards with clear, measurable language that is easy for applicants, neighbors, and staff to understand and enforce. Council and the Planning Commission (Commission) have held study sessions to guide draft amendments. Before forwarding code amendments to the Commission for a hearing, staff seeks Council direction on the following concepts: 1. Whether to allow limited outdoor activity for home occupations. 2. Adding Urban Agriculture and Farm Stand as accessory uses in residential zones, along with related standards. BACKGROUND Current code (LOC 50.03.004.1.b) prohibits home occupations that "alter the residential character" or "infringe upon peaceful enjoyment." This vague language makes compliance and enforcement difficult. Council directed staff to replace this with clear standards and initially supported codifying the City's policy to prohibit all outdoor activity. The Commission subsequently held a work session on April 14 and noted that some outdoor activities are necessary for certain businesses and relatively low impact and requested alternate options that would allow some limited outdoor activity, in addition to an option that would prohibit all outdoor activity per Council's direction. Draft code amendments (Attachment 1) reflect both approaches. Staff also identified Urban Agriculture and Farm Stands as distinct uses that may need separate regulation. DISCUSSION Staff is requesting Council direction and feedback on the following concepts in the draft code amendments before they are forwarded to the Planning Commission for a public hearing: 1. Outdoor Activity • Option 1: Limited Outdoor Activity. Allows small instructional classes (art, gardening, yoga, etc.) with restrictions on size, frequency, hours, and holidays. Specifically prohibits events, rental of outdoor space, markets, or other commercial gatherings (see pgs. 3-4 in Attachment 1 for draft code language). • Option 2: No Outdoor Activity. Prohibits all client-related outdoor business activity (see pgs. 3-4 in Attachment 1 for draft code language). Respect. Excellence. Trust. Service N 503-635-0215 380 A AVENUE PO BOX 369 LAKE OSWEGO, OR 97034 WWW.LAKEOSWEGO.CITY Page 3 In both options, above, outdoor activity by the business owner that does not involve any clients (e.g., art, craftwork, caring for nursery stock or seedlings, etc.) would be allowed and any activities generating excessive noise or emissions would be regulated under nuisance laws. 2. Urban Agriculture and Farm Stands In doing research and public outreach for this project, staff identified two agricultural uses that may be more appropriately regulated separate from home occupations. While these uses can be compatible in residential zones under certain circumstances, they may also produce more impacts on surrounding residential character than other types of home occupations. As such, staff proposes to classify these as separate accessory uses rather than as home occupations. • Urban Agriculture. New accessory use proposed for R-10 and R-15 zones on lots at least one acre in size. Allows crop production and sales, with limits on site size, hours, days of operation, number of clients, and equipment use. Larger or more intensive uses could be allowed by conditional use permit (see pgs. 4-7 in Attachment 1 for draft code language). • Farm Stands. Already allowed in some zones; proposed amendments would clarify standards and permit them in all residential zones (see pgs. 6-7 in Attachment 1 for draft code language). RECOMMENDATION Provide direction to staff on: 1. Whether outdoor activity for home occupations should be prohibited or allowed in limited circumstances. 2. Whether to add Urban Agriculture and Farm Stands as accessory uses with proposed standards. ATTACHMENT 1. Draft Code Amendments, 9/8/2025 Staff reports and public meeting materials that were prepared for prior study sessions can be found by visiting the project web page for LU 25-0002. Use the link below to visit the City's "Project"page. https://www.ci.osweao.or.us/all-projects (Under "Search"enter LU 25-0002, then press "Enter") Respect. Excellence. Trust. Service 503-635-0215 380 A AVENUE PO BOX 369 LAKE OSWEGO, OR 97034 WWW.LAKEOSWEGO.CITY ATTACHMENT 1 Draft 09/08/2025 LOC 50.03.004 Accessory Structures and Uses 1. Accessory Uses a. General Standards /// b. Standards for Specific Uses i. Farm Stand. As an accessory use, a farm stand is limited to one per site with a maximum size of 800 sq. ft.floor area. Commentary:The specific use standard for Farm Stands is proposed to be edited for clarity and ease of reading. ii. Home Occupation.There are three types of home occupations: Type A.A home occupation where a portion of the home is used to operate a business but no customers come to the site. A Type A home occupation may also involve a home that is used as a business address, but is not used for business operations. Type B. A home occupation where a portion of the home is used to operate a business and customers may come to the site. Type C. A short-term rental, as defined in LOC 50.10.003.2. Commentary: Home occupations are proposed to be categorized into three different types.This will make it easier for the City to apply additional rules to home occupations that have a greater impact on the surrounding neighborhood. It also makes it clear that certain rules do not apply to short term rentals—and vice versa. A Type A,Type B, or Type C home occupation may be conducted where allowed by other provisions of this Code if the following conditions are continuously met Commentary:This standard is proposed to be removed because it uses vague, nebulous language that is difficult to enforce and for the public and home occupation owners to understand. It would be replaced by the new standards, which are intended to be clearer and more objective, provided in this section below. (1) A current and valid business license is maintained. (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. (3)No outdoor storage of goods or materials other than vegetation. Stockpiling mulch or yard debris is not permitted. Commentary: Language is proposed to be added here that clarifies the intent of this standard, which is to not permit outdoor piles of mulch or other yard debris even while outdoor storage of plants is allowed. LU 25-0002 ATTACHMENT 1/PAGE 1 OF 8 Draft 09/08/2025 (4) Any substance listed or described as hazardous in ORS Chapter 453 (Hazardous Substances) is not permitted at the property where the business occurs, except that consumer quantities are allowed. Consumer quantities of hazardous substances are packaged and distributed in a form intended or suitable for sale through retail sales outlets for consumption by individuals for purposes of personal care and household use. Commentary:This standard would make it clear that hazardous substance limitations apply to home occupation uses, creating a path for code enforcement to use when they encounter hazardous materials. While hazardous substances are regulated at the state level, adding a regulation to the City's home occupation standards would make it possible to prohibit a home occupation use from storing and using an amount of a hazardous substance that is greater than the typical household limit. (5)The City's public nuisance rules (LOC Art. 34.08, LOC Art. 34.10) apply to home occupations, and any complaints of a public nuisance related to a home occupation shall be treated the same as any other public nuisance. Commentary:This standard is proposed to be added to clarify that the City's existing public nuisance rules apply to home occupations.This was seen as a preferable option by the Planning Commission and staff when compared with creating new nuisance rules specifically for home occupations. By adding language to the home occupation standards, it is made clear to home occupation operators that they must comply with nuisance rules. (6) 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. (7) A maximum of one vehicle with visible, exterior company or commercial markings is permitted to park off-site,within 300 feet of the property where the business occurs. Commentary:This regulation would make it so that any number of commercial vehicles are permitted as long as they can be legally parked on the property where the home occupation is located. Otherwise, each home occupation business would be permitted to have one vehicle parked off the property, within 300 feet.An enforcement distance of 300 feet is proposed in the code because it is a commonly used distance for noticing, and therefore generally accepted as a way to define the area of influence for a property's activity. (8) Marijuana facilities, psilocybin service centers, and psilocybin production are prohibited. (9) A Type B home occupation shall meet the following additional standards: (a)The number of persons visiting the home at the same time, as clients or customers of the business and including persons accompanying clients or customers, shall not exceed eight. LU 25-0002 ATTACHMENT 1/PAGE 2 OF 8 Draft 09/08/2025 Commentary:This provision would be added to address the impacts that are associated with client visitation. Code enforcement staff noted that a limitation based on a period of time, such as a limitation of 8 clients per day or 2 clients per hour,would be difficult to enforce, and that a limitation based on total number of clients at one time would be more enforceable. Outdoor Activity—Option 1(b) Outdoor activities involving clients or customers are not permitted, except limited outdoor activity as provided below: (i) Instructional or demonstration uses directly led by the home occupation operator such as art, gardening, or yoga classes, limited to eight clients or participants at one time are permitted. No more than two outdoor sessions are permitted per day, and no more than six outdoor sessions are permitted per week. Outdoor business activities may only occur between 9:00 am and 7:00 pm. No outdoor business activity is permitted on public holidays. (ii) Use of outdoor space for events, rentals, parties, weddings, performances, markets, or other commercial gatherings is prohibited. Commentary:Option 1 for this subsection (b) would disallow outdoor activity associated with a home occupation business, with some exceptions.The language is written specifically to only apply to outdoor activity that includes clients, which would allow business operators to work alone outside. Lower impact client activities, like teaching a workout or gardening class, are proposed to be permitted with some limitations on the number of clients permitted at once,the number of classes allowed over a period of time, and the time of day/days of the week. A limitation on Sunday operations was removed at the direction of the Planning Commission. Higher impact activities, in particular rental of outdoor areas, are specifically called out as being prohibited to make it clear that this allowance does not apply to them.This option aligns with feedback from the Planning Commission and Neighborhood Chairs Committee to allow flexibility for lower impact outdoor activities associated with a home occupation. Outdoor Activity—Option 2 (b) Outdoor activities associated with the business and involving clients or customers are not permitted. Commentary:Option 2 for subsection (b)would disallow outdoor activity associated with a home occupation business entirely.This aligns with the direction provided by the City Council at the work session conducted on April 1, 2025.Again, the prohibition would only apply to outdoor activity that involves clients, allowing business owners to work outside by themselves. (10)Type C Home Occupations, short-term rentals, shall meet the following additional standards: LU 25-0002 ATTACHMENT 1/PAGE 3 OF 8 Draft 09/08/2025 (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 or used for group events such as weddings, classes, or similar events, for example. Commentary:These are existing standards that apply only to short term rentals.Short term rentals would be newly classified as "Type C" home occupations to match the new classification scheme.A slight edit is proposed to standard (10)(b)to make it clear that this is not just a limitation on marketing but also on the use of the property. The following uses are exempt from the regulations of this section, except that a business license is still required: (a) Registered or certified family child care homes that also meet the State's requirements of ORS 329A, and (b) Licensed adult foster homes that also meet the State's requirements of OAR 309-040-0330. Commentary:State law limits the ability of localities to apply additional use regulations to child care homes and licensed adult foster homes in residential zones.This regulation makes it clear to the public and home occupation operators that child care homes and licensed adult foster homes are exempt from the use-specific regulations for home occupations. /// /// vii. Urban Agriculture. Urban agriculture is permitted under the following conditions: (1) The property must have a minimum lot size of one acre. (2) The urban agriculture use shall have a maximum area of 20,000 square feet or 35 percent of the area of the lot,whichever is less.The maximum area includes the area under cultivation,the area covered by any structures associated with food and/or beverage production, the compost pile, or any other area associated with the activities of the agriculture use. (3) On-site sales and serving are allowed, subject to the following additional standards: (a) Sales and serving are allowed only between 7:00 am and 8:00 pm. (b) Sales and serving are allowed up to 70 days in each calendar year. (c) A maximum of 30 clients, including persons accompanying clients, are permitted on the property at the same time. (4) Use of motorized equipment is only allowed between 7:00 am and 8:00 pm. LU 25-0002 ATTACHMENT 1/PAGE 4 OF 8 Draft 09/08/2025 (5) An urban agriculture use that does not comply with the standards of this section may be permitted as a conditional use, pursuant to LOC 50.07.005. Commentary: "Urban agriculture"would be a new land use that would be permitted (sometimes on a conditional basis) as an accessory use in the R-10 and R-15 zones.The above standards would be new specific use regulations that would apply to Urban Agriculture.They are based on the City of Portland's regulation for a similar use, Market Gardens. A minimum lot size of one acre has been added to assure adequate area to accommodate the use with fewer impacts to surrounding properties.The maximum area allowed for agricultural use would be 20,000 square feet(which is based on Portland's maximum area for Market Gardens in the R-10 zone) or 35 percent of the area of the lot.This is intended to limit the lot coverage of the use on a property and minimize the impact on neighborhood residential character. Food sales and serving/tastings are permitted. Hours of operation of food sales and serving, along with hours of operation for the use of motorized equipment, are limited to the same hours that a Community Garden can operate, 7 am—8 pm. Food sales and serving are limited to 70 days per calendar year, or slightly more than once per week,to preserve residential character.A maximum number of 30 clients is permitted at once to further help minimize disruption to the neighborhood while still accommodating gatherings of individuals for on-site sales and serving. A conditional use process is provided for property owners who wish to exceed these limitations with approval based on the applicant's ability to demonstrate with evidence that the use could be made to be reasonably compatible with surrounding uses. LU 25-0002 ATTACHMENT 1/PAGE 5 OF 8 Draft 09/08/2025 LOC 50.10.003 Definitions 2. Definition of Terms. /// Farm Stand A temporary or permanent structure used for the sale of fresh produce and seasonal items, including flowers, holiday trees, and wreaths. /// Urban Agriculture A site where food and/or plants are grown to be sold, including crops that will be used to produce alcoholic or other beverages.An area for serving or tasting can be included.The food and/or plants may be sold directly to consumers, restaurants, stores, or other buyers, or at markets. Heavy manufacturing is not allowed as part of this use. Commentary:A new definition would be added for a land use called "Urban Agriculture."This definition is partly based on the City of Portland's definition for a use called Market Gardens. The intention is to allow for growing produce on a property, which can then be sold as raw produce or as a food product derived from that produce, on site or to off-site customers. An area for serving food or providing tastings is specifically allowed.This definition was modified to allow for the cultivation of plants based on direction from the Planning Commission. /// LU 25-0002 ATTACHMENT 1/PAGE 6 OF 8 Draft 09/08/2025 LOC 50.03.002 Use Table 2. Residential Land Use Table. /// TABLE 50.03.002-1:RESIDENTIAL DISTRICTS USE TABLE P=Permitted Use I Blank=Not Permitted I C=Conditional Use I A=Accessory Use [x]Table notes located at the end of the table Use Use Type Residential Use-Specific Category Standards R-15 R-10 R-7.5 R-6 R-5 I R-DD R-W R-3[3] R-2 R-0[3][4] ACCESSORY USES • Accessory Community A A A A A A A A A A §50.03.003.6.j Uses garden Farm stand A A A A A A A A A A §50.03.004.1.b.i Urban A/C A/C §50.03.004.1.b.vii agriculture Home A A A A A A A A A A §50.03.004.1.b.ii occupation Short-term A A A A A A A A A A §50.03.004.1.b.ii rental lodging Large animals A A §50.03.004.1.b.iii kept for owner's personal use Small animals A A A A A A A A A A kept for owner's personal use[2] Accessory A A A A A A A A A A §50.03.004.1.b.vi dwelling unit Commentary: Farm Stands would become permitted as an accessory use in all residential districts and "Urban Agriculture" would become permitted as an accessory use in the lowest density residential districts, R-10 and R-15. Urban Agriculture would sometimes require a conditional use approval, which is why a status of"A/C" is provided.The Planning Commission provided direction that Farm Stands should be permitted in all residential zones because it was their opinion that the use would be low impact, especially with the existing 800-square foot area limitation. LU 25-0002 ATTACHMENT 1/PAGE 7 OF 8 Draft 09/08/2025 /// LU 25-0002 ATTACHMENT 1/PAGE 8 OF 8