HomeMy WebLinkAboutAgenda Item - 2026-02-17 - Number 08.1 - Oregon Housing Needs Analysis Update 8.1
V —� 0
o�� E 0 COUNCIL REPORT
OREGO\-\
Subject: Statewide Oregon Housing Needs Analysis Rules (PP 22-0005)
Meeting Date: February 17, 2026 Staff Member: Erik Olson, Long Range Planning
Report Date: February 6, 2026 Manager
Department: Community Development Department
Action Required Advisory Board/Commission Recommendation
❑ Motion ❑ Approval
❑ Public Hearing ❑ Denial
❑ Ordinance ❑ None Forwarded
❑ Resolution ❑X Not Applicable
❑X Information Only Comments: The Council adopted the most recent
❑ Council Direction Housing Needs Analysis (HNA) on October 17, 2023.
❑ Consent Agenda Lake Oswego will be required to update its HNA in
2029 under the new statewide Oregon Housing Needs
Analysis framework.
Staff Recommendation: N/A
Recommended Language for Motion: N/A
Project/ Issue Relates To: Council Initiative to, "Begin implementation of the near-term
strategies in the Housing Production Strategy Report," to meet the needs identified in the
City's Housing Needs Analysis.
Issue before Council (Highlight Policy Question): The new statewide Oregon Housing Needs
Analysis framework will increase the projection of need for housing units in Lake Oswego.
❑X Council Goals/Priorities: Plan for change and growth, with a focus on enhancing the
community's quality of life and sense of place; Begin implementation of the near-term
strategies in the Housing Production Strategy Report
ISSUE BEFORE COUNCIL
The purpose of this study session is to receive a general overview of the new statewide Oregon
Housing Needs Analysis (OHNA) program from Samuel Goldberg, Housing Policy Analyst in the
Housing Services Division of the Oregon Department of Land Conservation and Development
(DLCD). The OHNA program is expected to result in a significant increase in the City's projection
of housing need as compared to the current Housing Needs Analysis (HNA). This presentation
will provide Council with important context on the state housing requirements that will apply to
Respect - Trust. c
503-635-0215 380 A AVENUE PO BOX 369 LAKE OSWEGO, OR 97034 WWW.LAKEOSWEGO.CITY
Page 2
the City's next HNA update in 2029 and to the ongoing implementation of the City's Housing
Production Strategy (HPS).
BACKGROUND
The 2023 HNA was prepared and adopted in compliance with House Bill 2003 (HB 2003) (2019)
and HB 3155 (2021), which require the City to analyze what housing is needed for its current
and future residents. The following year, the City was required by ORS 197.290 to develop a
Housing Production Strategy outlining actions the City will take to address those housing needs;
Lake Oswego's HPS was adopted in 2024. Lake Oswego will be due for an update to its HNA in
2029 and the HPS in 2030.
The 2023 HNA forecasted a population growth of 411 residents over the next 20 years, based
on a housing forecast for Lake Oswego provided by Metro. This growth forecast was combined
with a projection that household size would decrease, resulting in an overall need for 1,968
new housing units over the next 20 years. A footnote on page 26 of the HNA notes that the
forecasted growth rates are, "very low in comparison to rates experienced during the past 20
years and low in comparison to projected rates in other parts of the region and state." The
footnote goes on to state the following:
The City's population increased by about 18%, with an average annual growth rate of
about 1%between 2000 and 2020 per year. During the next 20 years,forecasted growth
is projected to be a total of 1%, with an average annual growth rate of just 0.05%per
year. Many community members in Lake Oswego, including members of the project Task
Force, as well as members of the City's Planning Commission and City Council, have
questioned the accuracy of the projected growth rates,
The footnote concludes with, "To the extent growth occurs at a faster rate than projected, the
City will need to identify and implement strategies to address a potential shortage in available
land for housing in the near term."
DISCUSSION
Following the adoption of HB 2003 (2019), DLCD initiated a multi-year rulemaking process to
establish the new statewide OHNA program. This resulted in the publication of the OHNA
Methodology Report in January 2025, along with a 20-year housing allocation for every
jurisdiction in the state. As stated in a recent letter from DLCD (Attachment 1):
The new methodology accounts for underproduction of housing, housing for people
experiencing homelessness, and second and vacation homes. In addition, the allocation
of housing units within the Metro Urban Growth Boundary(UGB) is based on a formula
that factors in past housing production and existing units that serve those making 50%
or less of the regional Area Median Income, as well as other data. The allocations for
each jurisdiction are broken down into affordability levels to ensure housing produced in
Oregon meets the housing needs of community members across all income levels.
The OHNA methodology estimates the total number of needed housing units for all of Oregon
over a 20-year period, then divides that into geographic regions, components of need, and
Respect. Excellence. Trust. Service
503-635-0215 380 A AVENUE PO BOX 369 LAKE OSWEGO, OR 97034 WWW.LAKEOSWEGO.CITY
Page 3
income levels. Needs at the regional level are then allocated to each local government in the
region to use in their HNAs, which forms the basis for developing targets for cities to use in
their associated HPS. The number of needed housing units for each jurisdiction will be updated
annually using this same methodology.
Lake Oswego's 2023 HNA was adopted prior to the establishment of the new OHNA
methodology. The City will be required to use the 20-year allocated housing need and 6-year
housing production targets under the new OHNA framework when the next HNA and HPS are
developed in 2029 and 2030.
DLCD wrote, "While the allocation will change each year as updated data is used in the formula,
we expect Lake Oswego's allocation to remain considerably higher than the 20-year estimated
need of 1,968 units in the 2023 HNA" (Attachment 1). Specifically, Lake Oswego's 20-year
overall housing allocation under the OHNA 2026 Production Targets and Adopted Methodology
is 4,850 units— roughly 2.5 times the projection in the 2023 HNA. See Figure 1, below.
Figure 1: Lake Oswego's Housing Allocation (OHNA 2026)
Metro UGBs Results Total 0-30% 31-60% 61-80% 81-120% >120%
AMI AMI AMI AMI AMI
Lake 1 year 322 95 68 36 51 73
Oswego 20 year 4,850 • 1,139 913 535 873 1,391
The City will be required to submit a midpoint report to DLCD by the end of 2027 that outlines
housing production over the first three years of HPS implementation. These numbers will be
compared to peer cities and the region. Any cities with below-average housing production as
compared to peer cities may be referred to DLCD's housing acceleration program. Housing
production data will be displayed on a Housing Equity Indicator Dashboard online as a,
"transparent measure of progress on statewide and local housing production and equity goals"
(Attachment 1), and the dashboard will also be used as a demonstration of a city's housing
production performance during midpoint review.
Staff notes that, while these projections are more consistent with the growth rates many
considered more appropriate when the 2023 HNA was being developed, they may come as a
surprise to anyone using the HNA figures as a 20-year target for housing production and is an
important consideration as the City begins work on the Code Audit and Amendments and
Rezoning for Housing projects. DLCD staff will provide an overview of the new OHNA
requirements and answer Council's questions about how these changes impact the ongoing
implementation of the City's HPS.
ATTACHMENTS
1. OHNA Targets Letter from DLCD, 12/04/2025
Respect. .. .> ';,, Trust.
503-635-0215 380 A AVENUE PO BOX 369 LAKE OSWEGO, OR 97034 WWW.LAKEOSWEGO.CITY
ATTACHMENT 1
F O
N.",, :z re on Department of Land Conservation and Development
��� 635 Capitol Street NE, Suite 150
$59� Tina Kotek,Governor Salem, Oregon 97301-2540
Phone: 503-373-0050
Fax: 503-378-5518
December 4, 2025 www.oregon.gov/LCD
Erik Olson, Long Range Planning Manager (ail)
Community Development Department
City of Lake Oswego mippr
380 A Avenue
Lake Oswego, OR 97034
Sent via e-mail
Re: Statewide Planning Goal 10— Housing Planning Requirements
Dear Erik,
This letter summarizes how changes to the state requirements for housing planning will impact
the City of Lake Oswego.
Background
The City of Lake Oswego adopted a Housing Needs Analysis (HNA), also called a Housing
Capacity Analysis (HCA) in 2023. This analysis utilized the housing forecast for Lake Oswego,
provided by Metro, which forecasted population growth of 411 over the next 20 years. The city
used this forecast and coupled it with a projection that household size would decrease over the
next 20 years, resulting in a need overall for 1,968 new housing units. Building from the
information from the HCA and equitable engagement, the city developed and adopted its first
Housing Production Strategy (HPS) the following year in 2024. Of note, HB 2003 (2019)
required cities with a population of 10,000 or more to complete an HCA and HPS on a regular
basis. For cities inside the Portland Metro, like Lake Oswego, these are completed every six
years. Lake Oswego will be due for an update to its HCA in 2029 and the HPS in 2030.
Oregon Housing Needs Analysis
During the last several years, the state has been rolling out the Oregon Housing Needs Analysis
(OHNA) program. Specifically, the Department of Land Conservation Development has been
engaging in a multi-year rulemaking process to integrate the OHNA into Statewide Planning
Goal -10 housing and Goal 14 — Urbanization requirements, which have considerably changed
the way we plan for housing in Oregon. In January 2025, the Department of Administrative
Services published the Oregon Housing Needs Analysis methodology report along with a 20-
year housing allocation for every jurisdiction in the state. The new methodology accounts for
underproduction of housing, housing for people experiencing homelessness, and second and
vacation homes. In addition, the allocation of housing units within the Metro Urban Growth
Boundary (UGB) is based on a formula that factors in past housing production and existing units
that serve those making 50% or less of the regional Area Median Income, as well as other data.
The allocations for each jurisdiction are broken down into affordability levels to ensure housing
produced in Oregon meets the housing needs of community members across all income levels.
PP 22-0005 ATTACHMENT 1 /PAGE 1 OF 3
Lake Oswego— Statewide Planning Goal 10 — Housing
December 4, 2025
Page 2 of 3
When Lake Oswego embarks upon a new HCA and HPS in 2029 and 2030 for its next 6-year
cycle, the city will use its 20-year allocated housing need and 6-year housing production targets.
Please note that Lake Oswego's 2025 allocation, which may be considered a preview to future
housing allocations, is 4,620 housing units. While the allocation will change each year as
updated data is used in the formula, we expect Lake Oswego's allocation to remain
considerably higher than the 20-year estimated need of 1,968 units in the 2023 HNA.
Lake Oswego's 20-year housing allocation (OHNA 2025)
0-30%AMI 31-60%AMI 61-80%AMI 81-120%AMI >120%AMI TOTAL#of housing units
1,009 870 503 864 1,373 4,620
Lake Oswego's 6-year housing unit production targets allocation (OHNA 2025)
0-30%AMI 31-60%AMI 61-80%AMI 81-120%AMI >120%AMI TOTAL#of housing units
492 378 198 300 426 1,794
Housing Production and Equity Data
The Oregon Housing and Community Services (OHCS) department hosts a Housing Production
Dashboard online, which displays each city's annual 20-year housing allocation and 6-year
housing production targets as well as housing production data provided annually by the cities.
The state uses housing production data in the following ways:
• As a basis for referral to DLCD's housing acceleration program. Cities with below-
average housing production may be referred to the housing acceleration program
following their midpoint report year, which is halfway through the 6-year Housing
Production Strategy implementation timeframe. Lake Oswego will submit a midpoint
report by the end of 2027 and DLCD will compare housing production in Lake Oswego to
their peer cities and to the region at that time.
• Within the Metro housing allocation formula: Units needed to meet the current housing
need are calculated based on existing production and existing affordability in each Metro
jurisdiction.
The formula uses the city's rate of housing unit production relative to the UGB-wide
average. Units built within the last five years of the model "run year" are calculated as a
share of total units within each jurisdiction. This component of the formula has an
inverse weight, meaning a higher number of units produced in the last five years would
result in a lower allocation.
The formula operationalizes statutory direction to incorporate an "equitable distribution of
housing" under ORS 184.453 (3)(c), ensuring cities that have historically underproduced
market-rate or affordable housing are responsible for a greater proportionate share of
housing underproduction. The selected inverse weights have the effect of allocating
more housing, particularly housing affordable at lower incomes, to cities that have
historically produced less market-rate and affordable housing units.
PP 22-0005 ATTACHMENT 1 /PAGE 2 OF 3
Lake Oswego— Statewide Planning Goal 10 — Housing
December 4, 2025
Page 3 of 3
• As a transparent measure of progress on statewide and local housing production and
equity goals using OHCS' Housing Equity Indicator Dashboard online. DLCD will review
the city's performance as demonstrated by the Housing Equity Indicator Dashboard at
the midpoint review, including consideration for referral into the acceleration program.
We want to emphasize that many factors impact housing production, and production will rise
and fall over time, especially in relation to economic forces. We understand the housing
production targets are ambitious and that not every city will be able to meet their targets, and
some jurisdictions may meet their targets some years but not other years. While the adopted
2023 HCA remains the factual basis for the city's housing need until the city updates and adopts
its next HCA in 2029, preparing for the higher targets now will help the city address historic
underproduction and advance fair and equitable housing outcomes. Exceeding housing targets
is certainly not a bad thing in a city that is simultaneously fulfilling the other relevant statewide
planning goals. For cities that see housing production far below their target, the housing
acceleration program is meant to provide assistance to pinpoint and address barriers to
production.
We look forward to working with you as you continue your housing planning efforts.
Sincerely,
g(71ge -
Ethan Stuckmayer
Housing Division Manager, Department of Land Conservation and Development
Cc: Kelly Reid, DLCD
Samuel Goldberg, DLCD
PP 22-0005 ATTACHMENT 1 /PAGE 3 OF 3