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In July, the Housing Accountability and Production Office (HAPO) approved the City of Lake Oswego’s request for an exemption from Section 38 of Senate Bill 1537 (2024). This bill established HAPO and requires local governments to provide flexibility on specified development and design standards for housing development. The exemption allows Lake Oswego to continue using its own local adjustment processes provided the city meets certain criteria. HAPO found that, with conditions, the city’s six adjustment pathways—such as minor and major variances, design variances, and planned development overlays—collectively satisfy the statutory requirement to make all listed development and design standards eligible for adjustment. HAPO verified that the city had approved 100% of requested adjustments over the past five years and received only one public comment, which did not undermine the city’s eligibility under Section 39 of SB 1537. To maintain this exemption, HAPO imposed seven conditions of approval: Required Notice to Applicants – The city must directly notify all existing and prospective housing applicants of their legal right to request adjustments and the city’s obligation to approve at least 90% of such requests. Public Instructions on Adjustment Requests – The city must publish and provide clear instructions outlining how to request each eligible adjustment, including approval criteria for all relevant local processes. Protection Against Code Amendments – The city may not amend its code in ways that would make any Section 38 standard ineligible for adjustment. If new standards are added, they must also be adjustable to the same extent. Affirmative Disclosure to Applicants – When applicants request adjustments, the city must inform them of their eligibility, how to qualify, and the city's ongoing requirement to approve 90% of such requests. Statutory Backstop for Nonconformity – If any housing applicant becomes ineligible to use local processes for a required adjustment, the city must allow them to apply Section 38 directly and notify them accordingly. Annual Reporting Requirement – The city must submit yearly reports to HAPO documenting all adjustment requests and decisions, consistent with Section 41 of SB 1537. Ongoing Compliance with Approval Rate – The city must continue to approve at least 90% of adjustment requests over any rolling five-year period to maintain its exemption status. Failure to comply with any of these conditions may result in revocation of the exemption. The HBA continues to meet with HAPO staff to gain insight on enforcement mechanisms and provide member insight into the development process. If you have experiences you’re willing to share, please reach out at governmentaffairs@hbapdx.org.
In July, the Housing Accountability and Production Office (HAPO) approved the City of Lake Oswego’s request for an exemption from Section 38 of Senate Bill 1537 (2024). This bill established HAPO and requires local governments to provide flexibility on specified development and design standards for housing development.
The exemption allows Lake Oswego to continue using its own local adjustment processes provided the city meets certain criteria. HAPO found that, with conditions, the city’s six adjustment pathways—such as minor and major variances, design variances, and planned development overlays—collectively satisfy the statutory requirement to make all listed development and design standards eligible for adjustment. HAPO verified that the city had approved 100% of requested adjustments over the past five years and received only one public comment, which did not undermine the city’s eligibility under Section 39 of SB 1537.
To maintain this exemption, HAPO imposed seven conditions of approval:
Failure to comply with any of these conditions may result in revocation of the exemption. The HBA continues to meet with HAPO staff to gain insight on enforcement mechanisms and provide member insight into the development process. If you have experiences you’re willing to share, please reach out at governmentaffairs@hbapdx.org.