City Council - Special Meeting

We were going. We got forty five minutes for this.

We we can define we can define anything you want. Actually, we do have a definite. So in the in the annual housing report, we have definitions. There might actually be a definition of Twenty five minutes now.

Oh, because we we we

You noticed the new Behind you.

Looks the same as the old?

That sound we're both It is. Everybody in the room can see clocks. Exactly.

I mean, we don't carry clocks with us. Guess who's.

It was two. Oh

my god. If I can finally find out this clock.

There's the left, right.

How many people in this room?

There you go.

How many clocks? Yes. Two.

Brief. You got the computer. My two youngest have trouble reading. Oh, analog clocks. You know, we didn't do it in primary school, but they just don't see it.

My kids can't recurs them.

We're already

Younger ones can. That's all.

Okay. Alright. Do you need to go? Oh, no. No. We are. We're good?

Yep.

Awesome. Alright. We are heading into our work session. We have one item on the agenda tonight, the annual housing report, and I will kick it off to Sean Conrad. At least that's who's on the agenda.

Yep. We're gonna share the presentation today, but I'll kick us off. Thank you, council president. So, this is probably our third or fourth annual housing report. We started in '23 or '24, so we're bringing this at the beginning of, the the following year. So this is for 2025. So we have data, very basic data on, housing production, units permitted, things like that. So we'll share that. What I'll say at the start is, you know, this is a report to you guys. So if there's something that we're not, picking up on in here that you wanna see, happy to take that feedback for, you know, for future years, and work that into the report.

I'm joined by Sean Conrad, our planning manager, and I don't think he has formally met Art Graves. He's our, latest planner. He's an associate planner with us, and he, helped out this report together. So Art's joining us as well. I will kick kick it over

to you guys. Go ahead.

Good evening. So just very preliminarily, at a glance, the 2002

oh, click on the Okay. Click on the slide.

Which one? Mouse.

In slide. Oh,

no. You should have video off here.

Oh, yeah. Look at me. Okay.

There we go. Now press it.

There we go.

There you go.

Just to give you kind of

a quick twenty twenty five kind of units at a glance, 31 units were permitted. So building permits were issued. 73 units constructed, and that's occupancy is issued. Kind of also in the queue south of us, there are 31 units being built currently, multifamily building, and that's in Old Town Old Town Canary area. And then there is a 41 unit suburb of units also come in.

It's currently under review. And just to drill into that a little bit and give you perspective over the last five years. So, again, twenty twenty five, 31 units permitted. Included the line just to show it's with those five years, it still is trending up, and that shakes out to about, 62 units per year, that have

been permitted over the last last five years. I'll just I'll just pause at some some context here. So, obviously, we're we're down we were down at 21 and down at 25. I think what what you're seeing there in the the middle year is '22, 2224 was really the Brookman addition, Middlebrook, essentially. So, you know, we before Middlebrook had went in, so that's that was the annexation and then a pretty large subdivision, and the units, permitted are that subdivision plus some others that kinda went in around there.

So prior to 2021, we had not or prior to 2022, we had not really gotten into the Brooklyn edition. So that's why the numbers are low. It was basically infill, you know, around town. And then we got into the Brooklyn edition, and that's where you see the the increase. We, the developers have been doing a pretty good job kind of, getting land use approval for the serviceable lots in there.

And so I think we probably have one or two more. I think it's gonna pick up again in 2026 in terms of units permitted just because we have a few more subdivisions that recently went through land use, but I don't think we're gonna hit eighty, ninety or so for another few years. We need to get the trunk line in, the Brookman trunk line in, and then there's some larger lots that need to go. And then I think we hit hit those numbers again. In terms of single family detached, I think if we get multifamily, we could get up get up in those numbers. That'd be a very different mix because all of these are mostly same family detached. Just wanted to add that context. Great.

Is that including one across the street? Oh, sorry.

The apartment building across the street was permitted in 2026, and so it will show up in next year's report.

Are any of these permitted ones not in construction yet that you know of?

I don't know I don't know for sure. Usually, when they pull the permit, they start construction pretty quick. They don't sit on these permits for long. They're mostly single family detached.

I think they have a I frame.

They do. Yeah. Maybe six months or so. I mean, they they pull the permits and start construction pretty quick.

And then, similarly, units constructed in that five year time time frame. So, again, trending up.

Is that based on occupancy permit issuance? Thank you.

And I will pause here again. I apologize. I you're gonna get to this. What I what we wanted to really highlight here was so this is actual units constructed, occupancy issued, which is what, as we move forward and do our Oregon housing, capacity analysis and production strategy and sort of the the new housing system, if you will, that the state has adopted recently, they're gonna be tracking units constructed, not permitted or through land use. They wanna know how many, are have been issued to occupancy.

So we've been at average of 61 per year over the last five years, and we'll have a slide on this in just a second, but our target, once we adopt this this new strategy is a 144. So we need to go about two and a half times what we're currently what we're

currently moving. Once we adopt as if we have a choice.

Once we adopt the plan,

what the the plan, we've

been compelled to adopt. Yes. And, you know, we'll get in. What we Art and Sean, are scoping that housing capacity analysis now with the state. And so, of course, we you know, we'll be doing public engagement over the next two years. We'll be doing, coming to you through work sessions. The key is that we will need to adopt strategies. That's the second part. We do the capacity analysis, and the second part is basically a a strategy, a policy. What policies is the city going to adopt to try and achieve those housing numbers.

And I think that's the key is if we are implementing those policies, we should continue to stay in good graces with with the state. Because to I think all of our knowledge here, we don't control the market. We don't control construction costs or, interest rates or anything like that. So I think really what they wanna see is that there's policies in place to try and

hit those targets and that we have adopted and moved on those policies, whatever they are. So we won't be judged based on whether or not we hit the target. We'll be judged on whether or not we've created the environment that would allow the target to be hit if all the other factors that are outside of our control

That's my understanding. That's my understanding. And let let me verify that there's that there's no, I guess, stick, if you will, if we don't hit the numbers. They might have some tools in their pocket that they wanna kinda bring forward if we're not hitting it, but let me verify. Certainly, the next magic that

just creates infrastructure out of thin air?

So in the next three to six months, we will have pro probably have a pretty thorough work session on that production on that capacity analysis and kinda, you know, let you guys know what what is what is coming and answer that question more specifically. Okay. Yeah. Probably go to the next

one. Okay.

Okay. Like, Eric just mentioned, the cities within the, Portland Metro boundary are all required to do a housing capacity analysis. They're required to do it every six years. So our housing capacity analysis will be due next year, and Hart and I will be, taking the lead on that and bringing that for you. But, basically, the HCA, as it's noted there on the graph, it helps the city of Sherwood determine how much, land is needed for the projected housing needs for the next two decades.

That's what it'll basically do. So you'll see in the HCA, the housing capacity analysis, inventories of buildable lands, developable lands, what is, what kind of housing is needed here, and what are the measures to get that housing.

I feel like we just did this.

That's a new version

of housing needs analysis.

That's Yes. 2021 was the last time. Yeah. Yeah.

It it's basically an update of that. And then what you can expect is, 2027, that housing capacity analysis will be in front of you for your consideration for adoption. And then the following year, you're required to do a housing production strategy. And that strategy, again, like Eric had mentioned, would include specific actions the city would take in order to get the housing that the housing capacity analysis has said this community needs or should be striving towards. So how does this, dovetail with the urban growth boundary expansion that we applied for? I mean, I assume that we're counting that land, but that's not

a part of our city yet. Right? And so is this report to say, hey. We have to annex this amount to get this amount of housing because we don't have that land currently anyway.

Right? You know, I'm not sure it's a it's a good I think it's a key question as we scope out this project and understand what you know, where the housing capacity is going to land. Basically, can we include Sherwood West or not?

I mean, a a good thing to look back is when we did this before Brookman was

We we did we did include Brookman before it was annexed. But this is a new it's a whole new stable. Yeah. It's a whole new system. And so I think before we weigh in, especially publicly, we want to want to confirm that Sherwood West and the, unannexed urban growth areas can be included. So let us, reach out. We have a meeting scheduled with the state, I think, next week. So we can ask them that and and, get back to you guys.

And

then the slide before you here, this just briefly shows you, in general, where we still have some land for housing production. So on the south end there along Brook Road, obviously, lands that are currently outside the city limits, but from in the earth growth boundary, are available. You also see on the right of that picture, the land there, most of that has already been developed. This is the Denali Subdivisions I be familiar with. There is a subdivision that is going to be coming online soon.

That's Mosier Pass. That was a plan you in development. But a lot of that, housing stock, the lots are are being built on right now or built. And then, on the left, you have, where the Elks Lodge, that property, that's a low density residential zone. You know, you could get, probably 30 or 40 units there, but the main purpose of this is there's not a whole lot of available large tracks within the city currently.

30 to 40, that's assuming low density.

Low density. Zoned. Yes. You could get a

you get a more high density units or or medium high density units.

Yeah. The 30 to 50

is based on low low density residential zoning that it currently has, single family detached homes. Can

we I I know we're gonna probably talk about this, but can we address this with ADU, units as well or no? I mean, when we first worked on those as a council, we were we were, I would say, overly conservative because we thought, well, we're gonna have a flood of them. And then I think the last housing report, there was three or something, and it was all on new construction. Are you asking if

they can be counted as

Yeah. Goods? And

Well, if they yeah. If they can if they can be if we can address the fact that we don't have a buildable land and we don't know yet on whether we can control or count the Sherwood West, the idea is can we adopt a policy to get us those 144 units by saying, hey. We're going to make it easier for ADUs. Probably part of the strategy is we Part of you know what I mean? I'm just is do do those count towards those one forty four? Or do we have to say, hey, we're gonna white you know, we're gonna do a high density thing at the Alks Lodge to get those 140. You know what I mean? Like, I I don't know if we have to do something drastic. Say where? No. I know. But but you know what I mean? If we rezone it or something.

We we allow ADUs. The problem is Sherwood is so highly HOA that HOAs don't allow them.

Well, yeah. But also right. But so I I guess the question is, do ADUs count as a unit?

Typically, they count as a unit. So, like, if we go to the next slide, I think we have a unit counts on there for nope. We don't. Sorry. Typically, they count as a unit. I do wanna just be cautious, especially since we're in a public work session, that we we need we need to take a close look at the state law and confirm that as well. Okay. But, typically, ADUs do count as units. If they're they're desperate for

numbers that they Yeah.

They don't interestingly, they don't typically count towards density. So you don't typically count, like, let's say, you know, all lots in in Oregon now, residential, for the most part, allow an ADU. Typically, you don't count that as part of the density, the base density. But I think they I think it's likely they would count as units, but let us confirm that. Okay.

And so we just kinda wanted to with that past information, I apologize we couldn't answer all the questions firmly tonight, but we kinda just wanted to prime you for, like, what's coming. Like, we need to do the housing capacity analysis and the and the production strategy, and that's through the end of this year and next year. So that's coming. Again, Art and Sean are gonna lead that. So, you know, if we pack in here, of course, do public engagement, as part of that and get some feedback from the community and from from developers as well, and city council.

The last, slide, and happy to have a discussion, after this, is the policy summary. So the the highlight of city policy that was adopted last year related to housing was, of course, our annexation code. So we brought, annexation policy into the development code instead of just in the comprehensive plan that's gonna require an the the key, aspect of that code is an annexation agreement with developers or the property owners prior to committing to the city. So we we now have two annexation applications in, and so we're working through what those annexation agreements look like with those property owners. So we are, working on that now.

Basically, before the application comes to US city council, staff will kind of work with, the applicant on the technical side to identify the needed infrastructure and then propose something to you as city council, which you guys can modify based on, policy policy references. So that was sort of the key for the city policy. We've talked a lot about the state laws, but just to highlight a few here, there's s b fifteen thirty seven. It passed in 2024, but we wanted to highlight it here. It is being implemented in 2025.

That's why we included it. So that is the bill that requires mandatory adjustments for applications of housing over 70 units per acre. We've seen, one, applicant utilize fifteen thirty seven last year. It was the, the apartments here in Old Town. They requested and the city granted because because we, we we had to, a slight increase in density and a slight decrease in the lot size. So it went from 28 units to 32 units based on this housing bill. Just to clarify,

your last statement. You said we we granted it because we had to. We may have granted it anyway even if we didn't have to, but we we we'll never know.

Thank you. We just on that note, the city has approved 100% of housing variances in the last ten years. And so and we have previously approved variances on that property, not for density, but for lot size. And I think the difference is, you know, we in those cases, we had taken those adjustments through our own code and landed on a decision based on our code as opposed to no questions asked. But we've got TS on the on the previous adjustments.

We we expect that to continue. I don't I don't know if it'd be good to get into detail in this work session. We can come back or kinda get you guys information, another way if you'd like. On 1537, we had, applied the city had applied for an exemption to that bill, and that application was denied by app by DLCD. So, we we can reapply. One of the key questions that I have and, again, I don't know if it'd be good to get into details now. Probably not. But one of the key questions I have, and we've reached out to the state to to see if we can get an answer, is if we have the exemption in place, there is a requirement to maintain a 90% approval on adjustments. And I think

We do anyways, practically.

We we do anyways. I think the the question is, that apply to all housing housing units under 17 units per acre, or is it all of them? And while we've been approving everything, there could be a case where an applicant has has not demonstrated the approval criteria, and staff or a hearings officer or the planning commission may think that there's a good reason to not approve that based on the proposal. And I guess my question for the state is if we have that exemption in place, are we forced to approve essentially everything?

And not just 17 and over.

Not just 17 units and over and also not taking it through our local code, which allows for sort of the discretion through the policy preferences that you guys have set for adjustments. So we can let you know, what what the state says there. It's probably another work session to decide whether or not you would like, the staff to resubmit that. It true?

Should any studies been granted, for example?

Yeah. Yeah. Some have been denied and corrected corrected the issues on their resubmittal. Happy Valley was denied on specific issues, resubmitted, and is now approved. City Of Portland is denied and is not resubmitted. Tiger just got approved. Tualatin is approved. There there's numerous in this area that have been approved.

What what were you what are the reasons why we were denied?

The reason in the response from DLCD was that Was that it not? That the the application had not articulated all of the circumstances under which we could potentially deny a variance and how an applicant could essentially receive approval through our local process. It's to be honest with you, like, even the the planning department, we're we're spending a lot of time to try and understand the denial relative to others, And we we have not scheduled a a one on one with DLC to go

through that. I assume we've looked at what Twalighton, our other neighbors did that were successful, or we will or can reach out

to them. We can. And I

think a key question is, you know, what because adjustments getting into the weeds a little bit, but adjustments, you typically adjustments and variances are in the code you allow a a a change to the code when essentially a hardship or a unique circumstance exists. And that's pretty similar across all codes in Oregon. And, you know, basically, that's what our application said. Here's the hardship, you know, that that, the developer would need to show in order to get the variance, and that's all in all codes. And I think it's unclear to us, what the difference was between, you know, between, I guess, the hardships and all the different cities and sort of how we articulated what path the developer would take to get approval with if they did not have that hardship, essentially.

What we did say, what we thought the state wanted to see was, hey. We, basically, what the our application said was if a developer is not qualified for the local process, we will happily approve, process under this exemption. And, basically, they get they get the approval just under the state law. We thought that that that was what the sort of process was or what the state needed to hear, but, apparently, that wasn't enough. So we need to, dig in and sort of ask those, specific questions of, you know, how we differ from other cities.

I guess the question I would have around whether to answer your question on whether we should pursue reapplying would be, is juice worth the squeeze of the all the time and effort it might take to reapply and get approval if we're gonna end up at the, essentially, the same end result whether we have an exemption or don't have an exemption.

So Yeah.

It's it's a fair question.

Yeah. Yeah. And to me, it's a key it's, of course, up to you guys whether whether we reapply. To me, the other key question is just that that 17 units per acre. And, again, even though we're very likely to approve those, I just go back to, you know, our our, you know, approach has jurisdiction of if we have the choice to take things through our local code, which we opt to do that. And in that case, it would not we would we would opt to not have the exemption in place then. So

Makes sense.

Yeah. Twenty one thirty eight is the middle housing, bill. So that's really just tweaks to HP 2,001. So HP 2,001 was the sort of marquee middle housing bill. This is sort of a a cleanup, if you will.

Now that it's been implemented over a few years, state's gotten a lot of feedback, and so this is essentially cleanup of the original h p 2,001 bill. SB two two five eight, Oregon Homes, that's a really interesting one that is, essentially the the building codes division at the state. So the the building division at the state plus, DLCD are working together to approve basically preapprove specific, homes, meaning, like, the actual structure of the building code, preapprove those homes, and then identify specific lots that those homes could be placed on. And that

would be

notwithstanding the local, comprehensive plan or development code. So this is, you know, in terms of our concerns about local control, this is one where a developer or a property owner would be able to place one of those preapproved homes on a specific lot in Sherwood even if it did not meet our setback height density standards. So for example, they'll say single family home. You know, here's what it looks like. It's got the the front door here, back door here, garage here.

And then they'll say on a 5,000 square foot lot, as long as you have a three foot setback, 10 foot setback to the rear, three to the sides, it can go on that lot even if the local code says you need a 20 foot setback to the rear and a five foot setback to the side. So I think it's to me, I really don't know how much this is gonna be used. I think it's an open question how much this is gonna be used. So I think it's gonna take a few years to flush out. And and you

said that if there was if there was an existing plan in place for that area, they could ignore that and place one of these Correct.

One of these there.

Correct. Middle of a subdivision that's planned for a certain way. They could someone with this using this bill could just pop down something that is potentially a complete completely different than the rest of the neighborhood that's being built for a

house. I do I just wrote a note here that we we need to ask about master planning in Sherwood West, because if you guys have said, hey. You know, this should be a middle housing only zone. My understanding is that this bill I think, you know, even at this we're in rulemaking now for this. Even at this stage, I don't know that they're gonna clarify whether master planning would supersede, if you will, this bill. My hunch is probably not.

I still unclear if master planning even has any teeth

Anymore.

At all anymore. So

I'm I'm so conscious that when you're doing a contract between sitting in a developer's contract,

So

And I also I the builders that I've talked to, I mean, I know there's bad actors somewhere, but I also don't wanna catastrophize and say, hey. They're all gonna come in and slap a a house in the middle of a Yeah. I was

talking about a developer in that situation. I was talking about, like, a a single lot owner. Right? Oh, yeah.

Can they do it if if ignoring it makes it so you can't put a sidewalk there or something? I mean, like, can can they mess up your infrastructure in that way? Or Probably not.

These these would be, you know, they're not really they shouldn't be in back in the public facilities. This is, you know Oh, right away.

It's just gonna post What's the preapproved houses? It's gonna be The preapproved houses. Yeah. Okay. They're not gonna be that. Okay. I ended you know, back in the day you bought a bought a house. Sears house. Yeah. Sears house. That should yeah. Sears. And yep.

Think those houses are still standing.

I know.

I will say that so, staff myself is on the rulemaking committee for these, so I will be paying attention and weighing in and, you know, trying to make sure that it lands the most appropriate way that that it can for sure

would You just apply.

Why didn't they appoint us? Close, of course.

So work, but it's

not a pretty good work, but, 974 is the, design standard exceptions for, residential subdivisions over 20 units. So if it's a subdivision over 20 units, then our design standards do not apply. They define design standards. Do we do suspect that some of the, you know, the very traditional subdivisions that we get insured with, they hold on on on this bill. We suspect that. So that's the summary. I know we have a few minutes left, I just wanted to open up and see if there's any questions or discussion.

Well, looked at me. I think I hit most of mine on the way. I have a lot to say, but not relevant to the Hauser report.

So, again, I didn't we didn't have any ADUs applied for this year? We built four ADUs this year. Oh, or at least, yeah, at least four. There's a bunch of a bunch of them in that Denali. Oh, yeah. Denali there. Yeah. Internally. Internal.

Yeah. What we're seeing is internal AD, basically internal ADUs. So our our Yeah. They're having maybe a side entrance and, kind of doing one large structure with it. It's all been

an interesting structure. Yeah. Because that's what that's what we were looking at before because it's so expensive to do it after the fact. Okay. Definitely. Don't like to use, like, lots of censured walls. Yeah. Kind of I

also think they're less disruptive to Neighbors. Yeah. Because you typically are more gonna see a family situation. Totally separate family.

No. In fact, I I just saw a housing unit, and I I I don't know if there's a difference between that. Is there a difference between a duplex and a twin home?

I never heard of a twin home, but not like a duplex.

They were sharing a garage wall, and they but they were luxury twin homes, essentially. And I'm like

Oh, they're duplex. So the common wall is only the garage. It's a

garage building unit. Yeah. And I was like, that's looks fine.

Those over by, don't we?

Maybe. I don't know. I think

they share more than just garage wall. I think they share some Yeah. The one space too.

Yeah. The ones I saw were in a different state, but I was like, that looks like Duplex

by another name.

That would be a duplex I would rather

I know.

For sure.

And they look great. They were luxury. So I'm not saying that's a way to get affordable housing, but I'm like, well, we have to put duplexes.

Alright. Well, we have about a minute till our next meeting, but we will meet at 07:05. The way you are thinking, and we'll come for the.

Yeah. There is a bit of a.