By now, Oregon’s housing supply crisis is evident and enjoys unprecedented (if long overdue) attention from the legislature, spurred by Gov. Tina Kotek’s focus on the problem. As a result, the past three years have seen a wide array of new laws intended to make homebuilding easier. Notable among these are 2021’s HB 2001 (requiring local governments to allow opportunities for middle housing) and SB 458 (allowing for expedited land divisions for middle housing), and 2023’s HB 2021, with which the legislature seeks to change how the state determines housing needs and allocates that need to local governments.

We intend to monitor the impacts of these bills in the coming years, but the past two years have seen one less-publicized legislative achievement from several years back come into its own. In 2017’s SB 1051, the legislature strengthened the longstanding “St. Helens policy,” which requires local governments to adopt and apply only clear and objective standards, conditions, and procedures when they consider an application for needed housing. The bill did so by extending the policy to any regulations that govern the development of housing of any type.

For the first time, local governments were confronted with the need to provide an entirely clear and objective pathway for approval of each housing development application. Though this generated a few initial opinions from the Oregon Land Use Board of Appeals (LUBA) starting in 2018, the full contours of Oregon’s needed housing laws became apparent in 2022 and 2023. This was particularly the case regarding local government’s duty to provide an affirmative, clear, and objective permitting pathway. Several key cases furnished notable takeaways for housing developers and land use practitioners.

In a 2022 case, East Park LLC v. City of Salem, LUBA clarified that “ORS 197.307(6) provides that a local government may provide a discretionary approval path for housing only in addition to an existing clear and objective path.” The city of Salem had denied a conditional use permit for a 291-unit apartment complex, arguing that the applicant could have requested a zone change to a zone in which an apartment complex was a permitted use rather than a conditional one.

LUBA found the relevant conditional use permit criteria subjective and required a “value-laden analysis,” and therefore could not be applied to the development of housing in the city, regardless of whether the development could be permitted in a different zone. Additionally, LUBA made clear that until the city adopted a clear and objective pathway for the development of housing, it could not impose an alternative discretionary pathway. Further, LUBA clarified that “ORS 197.307(4) requires a clear and objective path for housing development notwithstanding how a local government allows housing in the zone.” In essence, a city may not force an applicant to apply for a zone change in order to develop housing as a permitted use rather than a conditional one.

LUBA also applied ORS 197.307(4)’s clear and objective requirement in the 2023 case Icon Construction and Development v. City of Oregon City. In this case, the city of Oregon City denied an application for a general development plan based on several development code standards that were not clear and objective.

On appeal, LUBA first found that the application for a general development plan triggered Oregon’s needed housing laws, including ORS 197.307(4). Next, because the application was for the development of housing, LUBA remanded it to the city to apply only clear and objective standards consistent with ORS 197.307(4). Finally, LUBA declared that because the city did not give the applicant a clear and objective path to approval, ORS 197.522 governed the application, and the city had therefore erred in not allowing the applicant to propose amendments to its application before the city made a final decision.

The East Park and Icon Construction cases illustrate how developers can apply Oregon’s needed housing laws in a variety of ways to ensure they always know where the goalposts are for their projects. Oregon’s needed housing laws provide developers with greater certainty that they have a clear and objective pathway to approval, which is critical to address Oregon’s ongoing housing supply crisis.

Garrett Stephenson is a Schwabe, Williamson & Wyatt shareholder. Contact him at 503-796-2893 or gstephenson@schwabe.com.

Bailey Oswald is a Schwabe, Williamson & Wyatt associate. Contact her at 503-796-2427 or bmoswald@schwabe.com.

Keenan Ordon-Bakalian is a Schwabe, Williamson & Wyatt associate. Contact him at 503-796-2470 or kordon-bakalian@schwabe.com.

This column is intended to provide readers with general information and not legal advice. Consult professional counsel for help regarding specific situations.

The opinions, beliefs and viewpoints expressed in the preceding commentary are those of the authors and do not necessarily reflect the opinions, beliefs and viewpoints of the Daily Journal of Commerce or its editors. Neither author nor the 91��Ƶ guarantees the accuracy or completeness of any information published herein.

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