Exemption Request to Mandatory Adjustments
On January 28, 2025, the Housing Accountability and Production Office (HAPO) received an application from the City of Sandy 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:
1. Within the previous 5 years the city has approved 90 percent of received adjustment requests; or
2. 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.
HAPO 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, HAPO 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 HAPO's review of the City of Sandy Exemption Request against the applicable review criteria established in section 39 (2), SB 1537 (2024), HAPO approved the City’s exemption request with seven conditions. Conditions of approval are set forth in Attachment A of the decision. Following a complaint and investigation by HAPO, a finding of non-compliance with the approval criteria in 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 City provides three pathways to request an adjustment to the applicable standards.
- Adjustments (sections 17.66.10, 17.66.40, and 17.66.50): The City’s ‘Adjustment’ process is limited to only individual lots, and therefore this process cannot be used by applicants seeking to vary development standards through the land division process. This renders applications for the development of housing that do not meet this eligibility criteria ineligible to adjust the standard via this pathway.
- Variances (sections 17.66.60 and 17.66.70): The Variance process can only be applied if “special circumstances or conditions apply to the property which do not apply generally to other properties in the same zone or vicinity, and result from lot size or shape (legally existing prior to the effective date of this Code), topography, or other circumstances over which the applicant has no control”. This means that an applicant for the development of housing will be ineligible to adjust side or rear setbacks on an indeterminate (but categorical) proportion of sites that do not meet this standard. The limitation of the Variance process renders applications for the development of housing that do not meet this eligibility criteria ineligible to adjust the standard via this pathway.
Under the Special Variance (section 17.66.80) process, all applications for the development of housing under the jurisdiction of the local government are eligible to adjust this standard to the extent specified.
All applicants for the development for housing must be eligible to adjust any and all of the development and design standards under section 38 (4) and (5) of SB 1537. When an applicant for the development of housing is rendered ineligible for requesting a statutorily-required adjustment, the city may conform via the direct application of section 38 for the standard or standards rendered ineligible for adjustment via the local process.
