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Agenda Item - 2023-05-22 - Number 07.1.1 - Staff Memo 05-10-23 w-Attach (Legislative Update) MEMORANDUM V O OREGOC� TO: Planning Commission FROM: Madison Thesing, Assistant to the City Manager City Manager's Office SUBJECT: 2023 Legislative Session Update DATE: May 10, 2023 MEETING DATE: May 22, 2023 Executive Summary At their meeting on April 24, 2023, the Planning Commission requested more information on the Oregon Legislature's current 2023 Legislative Session. On May 22, 2023, staff will provide an update with background on the City's Legislative Agenda and state bills related to housing, land use, and Planning Commission goals. No direction or action is requested —this update is for informational purposes only. Background In alignment with the City's Intergovernmental Relations Policy- Resolution 20-28—and goals for coordination with State initiatives, the City Manager's Office is responsible for tracking and managing the City's legislative agenda on behalf of the City Council. The City Manager's Office coordinates a cross-department Legislative Team for coordinated efforts to leverage subject- area expertise to support the City's legislative agenda, as outlined in Attachment 1. Additionally, the City is a member of the League of Oregon Cities (LOC), and utilizes the expertise of the LOC's Intergovernmental Relations team for ongoing legislative tracking and lobbying on behalf of local jurisdictions. City of Lake Oswego Legislative Principles The legislative principles in Attachment 1 are the overarching principles that guide the City's efforts at the Oregon State Legislature. The principles are the framework through which the City addresses policies that transcend partisan politics or legislative sessions. City of Lake Oswego Legislative Priorities To guide the City's advocacy during the session, staff prepares legislative priorities (also in Attachment 1) for City Council's consideration that are grounded in the City Council's goals and City-adopted Master Plans, such as the City's Comprehensive Plan,Transportation System Plan, and Sustainability and Climate Action Plan. These legislative priorities guide the City's Respect, Lx:el en e. Trust. vi:e:. 503-635-0215 380 A AVENUE PO BOX 369 LAKE OSWEGO,OR 97034 WWW.LAKEOSWEGO.CITY Page 2 of 3 involvement and position on legislative actions in the context of what is happening during the session. Staff will take a position (support, oppose, or neutral) on bills as directed by the adopted legislative priorities. Discussion The Oregon Legislature is currently convened for its 2023 legislative session. This "long session" will conclude by June 25, 2023. Bills have now been assigned to their second committee for either further review, budgetary considerations, or rule-making. The next deadline for committees is May 19; however, a work session must have been scheduled by May 5. If bills are unable to move out of committee through having a public hearing, bills will not advance for final readings. Housing and land use bills the City is actively watching during the current legislative session include: • HB 2001 & HB 5019 (Governor's Housing Funding Package)—Appropriates moneys from General Fund to specified state agencies for certain purposes related to housing under declaration of emergency. o Enrolled • HB 3414 (Governor's Housing Bill)— Limits conditions under which local governments may deny variance for housing development within urban growth boundary. o Submitted public testimony (see Attachment 3) • HB 3174— Requires Oregon Department of Administrative Services to provide grants to Association of Oregon Counties and League of Oregon Cities for specific purposes relating to planning for housing. • HB 2984—Allows conversion of building from commercial use to workforce housing within urban growth boundary. • SB 1051— Requires Department of Land Conservation and Development to study urban reserves. o This bill was reworked and reintroduced as SB 1096 --Authorizes certain cities with demonstrated need for housing to add project area to their urban growth boundary upon certain conditions. • SB 5511—Appropriates moneys from General Fund to Housing and Community Services Department (Oregon Mayor's Association Homeless Funding Proposal). Mayor Joe Buck submitted a letter to the House Committee on Housing and Homelessness last month, on behalf of City Council, outlining concerns regarding, "the possible cumulative effects on communities in Oregon regarding the numerous housing bills under consideration in the 2023 Legislative Session" (see Attachment 2). More recently, Mayor Buck submitted a letter to the House Committee on Rules with testimony for the Public Hearing on HB 3414 expressing opposition to the bill in its current form and supporting more workable solutions (see Attachment 3). Respect, Ex:el en e. Trust. vi:e. 503-635-0215 380 A AVENUE PO BOX 369 LAKE OSWEGO, OR 97034 WWW.LAKEOSWEGO.CITY Page 3 of 3 As the Oregon Legislature enters the final weeks of the session, staff will continue to closely monitor the progression of these bills. Attachments 1. City of Lake Oswego—2023 Legislative Agenda, 02/10/2023 2. Legislative Housing Letter—submitted to House Committee on Housing and Homelessness, 04/20/2023 3. Written Testimony for HB 3414—submitted to House Committee on Rules, 05/09/2023 Respect. Ex:el en e. Trust. Service. 503-635-0215 380 A AVENUE PO BOX 369 LAKE OSWEGO, OR 97034 WWW.LAKEOSWEGO.CITY MEMORANDUM V O OREGO� 2023 City of Lake Oswego Legislative Priorities City of Lake Oswego Legislative Principles The legislative principles are the overarching principles that guide our efforts at the Oregon State Legislature. The principles are the framework through which we address policies that transcend partisan politics or legislative sessions. • Preserve Home Rule Authority—The City of Lake Oswego aims to preserve home rule authority and local decision-making. Local control allows the City to act on behalf of the interests of the community based on context, needs, and objectives. Additionally, the City opposes efforts that pre-empt or limit local government authority. • Avoid Unfunded Mandates—The City of Lake Oswego opposes unfunded mandates and state-issued requirements that do not have dedicated funding or resources. • Leverage Regional and State Partnership—The City of Lake Oswego aims to leverage partnerships and coordination with outside agencies to achieve community goals. These partnerships support streamlined service delivery, fiscal responsibility, and a thoughtful approach to public services that cross jurisdiction boundaries without duplication or waste of resources. 2023 Legislative Priorities Legislative priorities are grounded by the adopted 2023 City Council goals, as well as previously adopted Master Plans that guide City operations and ongoing investments, such as the City's Comprehensive Plan,Transportation System Plan, and Sustainability and Climate Action Plan. Ensure a safe, secure, and prepared community Council Initiatives Legislative Priorities • Continue to oversee and guide the action • Monitor policies related to public safety plan to implement the recommendations and services, including statewide of the 2021 Community Dialog on standards and those that could preempt Policing, including increased reporting local decision making and public dialog about policing in Lake • Support legislative funding packages that Oswego address wildland-urban interface preparedness Respect, Excellence. Trust. Service. ATTACHMENT 1/PAGE 1 OF 4 503-675-3984 380 A AVENUE PO BOX 369 LAKE OSWEGO,OR 97034 WWW.LAKEOSWEGO.CITY Page 2 of 4 • Implement a sustainable business model • Support legislative funding, grants, or for the Fire Department that meets the opportunities to encourage community 21st century needs of Lake Oswego emergency preparedness • Create a process for externally-based community groups to connect and create a plan to support residents, especially seniors and people with disabilities, in the event of a disaster • Support business investment and job creation in Lake Oswego Council Initiatives Legislative Priorities • Ensure the North Anchor • Support policies and programs that invest redevelopment stays on track in workforce training in partnership with • Review the status of the City's Urban Oregon high school and higher education Renewal Areas, including the status of • Oppose legislative that directs or previous planning for Foothills preempts land use and conditions • Implement the initiatives in the 2022 Economic Development Strategy Foster a welcoming and inclusive community where all people have the opportunity to thrive and have equitable access to City services Council Initiatives Legislative Priorities • Guide the highest priority • Encourage legislative policies that recommendations of the DEI Advisory promote inclusion and equitable access Board: Develop relationships with to public programs, services, facilities and culturally specific community-based policies organizations; develop and implement • Monitor policies related to public inclusive community engagement contracting practices; and ensure COBID procurement process requirements are met Combat climate change and strengthen the community's resilience to climate impact Council Initiatives Legislative Priorities • Integrate climate action and resilience • Support legislation that advances local strategies into City projects, such as efforts to combat climate change with capital improvement planning, housing local authority, which includes opposing policy, and City facilities and fleet preemptions and state mandates decisions • Support legislation that provides direct • Update the Urban and Community Forest funding or grant opportunities to advance Plan using the findings of the 2022 State local efforts of the Urban Forest Report ATTACHMENT 1/PAGE 2 OF 4 Page 3 of 4 Strengthen public trust in the City through continuous improvement, outstanding customer service, infrastructure investments, and fiscal stewardship Council Initiatives Legislative Priorities • Collaborate with the City of Portland to • Oppose legislation that limits or make a financially and environmentally interferes with the City's ability to collect responsible long-term investment in a local revenues sources wastewater treatment plant • Support legislative funding packages that • Lead the community visioning process for support infrastructure investments, the Lake Oswego Public Library; including highways, stormwater, implement a strategic plan based on the wastewater, and drinking water recommendations of the visioning process • Leverage Lake Oswego's position as the largest city in Clackamas County on regional bodies and with other groups such as the League of Oregon Cities and the Metropolitan Mayors Consortium • Conduct a long-term strategic review of the City's finances, including revenues, expenditures, and capital funding Invest in Lake Oswego's high-quality parks, natural areas, and recreational amenities Council Initiatives Legislative Priorities • Guide delivery of the LORAC and Golf • Encourage legislation that protects our Course Construction waterways and natural spaces, while • Develop a Funding Strategy for Rassekh encouraging investment in park Park, and construct the skate park acquisitions and improvements portion • Start the process to update the City's Parks Master Plan Improve transportation connections, mobility and safety for all travelers and all types of trips in Lake Oswego Council Initiatives Legislative Priorities • Continue construction of sidewalks and • Support legislative funding packages that pathways, focusing on safe routes to support transportation infrastructure schools investments. Transportation packages • Adopt a transportation framework plan should address multimodal needs and for Stafford/McVey promote local decision-making on needs • Support legislative direction that reexamines tolling projects and the tools available for funding infrastructure ATTACHMENT 1/PAGE 3 OF 4 Page 4 of 4 projects, as well as encourage regionwide approaches for reducing congestion Conserve the community's character, sense of place, and quality of life by planning for change and growth Council Initiatives Legislative Priorities • Continue work on key housing initiatives, • Oppose policies or processes that allow the housing production strategy, guiding private development to guide Urban the HACC/Metro project on Boones Ferry Growth Boundaries expansion, or Road, and support for other non-profit requires City service delivery outside of led housing projects City-adopted Master Plans • Conduct a comprehensive review of the • Support Oregon Mayor's Association City's development codes and processes proposal to direct funding to local to make our processes more efficient and solutions for addressing housing and homelessness predictable and less expensive to reduce • Encourage policies to include local the cost of housing and commercial funding and grant opportunities to development address housing needs • Support policies that encourage local land use decision and local authority ATTACHMENT 1/PAGE 4 OF 4 1,A E O Off CITY COUNCIL rr ., n � � o °REG0\4 Chair Dexter, Vice-Chairs Gamba and Helfrich, and Members of the Committee: On behalf of the City of Lake Oswego and the City Council, I am writing to express our concern about the possible cumulative effects on communities in Oregon regarding the numerous housing bills under consideration in the 2023 Legislative Session. Housing production is a top concern for all communities throughout Oregon, including Lake Oswego. As elected officials, we are collectively working to make our communities places people can call home and a sufficient supply of housing affordable at all income levels is a vital part of our work. However, it takes more than housing to make communities great. We are working hard to address climate change, foster economic prosperity, invest in transportation options, provide equitable and affordable public services, and provide access to nature and recreation. Oregon's revolutionary land use system is an important tool in our work because it protects farms and forests while encouraging efficient urbanization of the areas inside our urban growth boundary. While Oregon is dealing with an unprecedented housing crisis, we are concerned that the cumulative effect of the housing bills under consideration will disrupt our work to create a sustainable community and may inadvertently lead to highly inefficient urban sprawl that will not protect Oregon's agriculture, open space, and natural areas. These bills will also place a substantial new regulatory burden on local governments, without giving us the tools we need to facilitate housing construction. We share your desire to build housing. Housing production has already accelerated in our community. We urge the committee to partner with local governments to reinforce the positive trends that are already happening rather than pursue the highly regulatory approach that is contemplated by many of the bills proposed in this session. We are aware of the misconception that Lake Oswego is not committed to producing its fair share of our housing. However, our track record as a community illustrates that we are successfully increasing housing supply. Lake Oswego has increased our housing supply in the last five years by approximately 836 units (650 of which were multi-family units) and issued final occupancies for approximately 215 single- family dwelling replacements in the same period. While we are largely built out, we have focused on higher-density and mixed-use infill development to encourage housing variety and affordability. We have successfully increased our housing stock while preserving the character of our neighborhoods, maintaining community livability, balancing growth with environmental stewardship, supporting the vitality of our business community, and investing in vital infrastructure to support this housing. Respect, Excel ence. Trust. Sc: 503-635-0213 380 A AVENUE ApTp�9I I ENT a/FAUE�O�bR397034 WWW.LAKEOSWEGO.CITY Page 2 of 3 Successful project examples since 2018: Affordable Housing • Sold a City-owned property on Boones Ferry Road for the development of approximately 50 affordable housing units for those earning<30% - 80%AMI. • Allocated $800,000 in City ARPA funds for public infrastructure in support of a Habitat for Humanity development comprised of 23 affordable for-sale townhomes. • Approved 100 units of affordable multi-family housing for residents earning 60%of AMI or less at the Marylhurst University Campus site, which necessitated a code amendment to allow multi-family housing as a permitted use in the Campus Institutional zone. These homes are currently under construction. • Rezoning of public and privately-owned properties to allow multifamily development with affordable housing under a voluntary inclusionary housing policy. • Inclusion of 8 affordable housing units of the 67 units in the North Anchor Redevelopment project in our downtown. Market Rate Housing • The Windward: 200 apartments were constructed in a mixed-use development in downtown Lake Oswego in 2018. • The Springs: 105 independent senior living apartments were constructed in Lake Grove in 2019. • Mercato Grove: 206 apartments were constructed in a mixed-use development in Lake Grove in 2020. • The Francis: a 16-unit condominium building is currently under construction in downtown Lake Oswego. • 4th Street Condos: a 15-unit condominium building is currently under construction in downtown Lake Oswego. • Quarry Commons: 10-unit apartment building, including four live/work units, are currently under construction in Lake Grove. • A 158-unit apartment building is currently under construction in the Kruse Way commercial area on Meadows Road. • Kruse Way Commons: an additional 36 apartments are currently under construction in this existing apartment complex in the Kruse Way commercial area. Lake Oswego has 293 residential units under construction that include 235 multi-family units, 55 single-family homes, and 3 ADUs. An additional 99 units are currently in our permitting process. This is in addition to the other 1,051 housing units constructed in Lake Oswego between 2018 and 2022 as listed above. To encourage this development, the City has taken several actions toward expanding housing options since the adoption of the City's Housing Needs Analysis in 2013, including: • Adoption of Clear and Objective Housing Standards; • Streamlined development standards and permit process for accessory dwelling units (ADUs) (Ordinance 2784); Respect, Excel ence. Trust. Sc: 503-635-0213 380 A AVENUE APp Q9H IENTa/IZE bSWEFOobR397034 WWW.LAKEOSWEGO.CITY Page 3 of 3 • Waiver of systems development charges (SDCs) for ADUs and affordable housing developments; • Waiver of all City land use application fees for developments where the proposed dwelling units are affordable to those earning 80% or less of Area Median Income and spending not more than 30% of household income on housing; • Adoption of code amendments to permit middle housing in all zones that allow the development of detached single-family dwellings in compliance with HB 2001 (Ordinance 2982). These were policies and codes we, as a City Council, enacted to respond to the changing needs of our Lake Oswego community. We have successfully demonstrated viable local approaches and solutions that are increasing housing production. We respectfully request your leadership in forming statewide tools and solutions together to address our shared housing production goals. This could include: • Direct State funding to infrastructure projects related to housing production; • Develop grant programs and funding for local governments to successfully implement their housing production strategies, as required by House Bill 2003 and the new statewide Oregon Housing Needs Analysis program; • Invest in career pathways to trade and apprentice roles that support housing development, including Building Inspectors; • Provide model codes, technical assistance, and state resources in partnership with DLCD and LUBA to help remove barriers with local development code audits; and/or • Support local government efforts to create walkable neighborhoods and commercial centers, which are both climate-friendly and attractive for middle housing development. This can be through support for urban renewal, funding to assist communities to comply with the state's Climate Friendly and Equitable Communities rules, technical assistance, and support for TGM and other local government grants. I strongly urge the committee to work with local governments to find solutions together rather than create a multitude of unintended consequences for Oregon's land use system and the livability of our communities that do not truly address housing production and/or affordability. We respectfully request your leadership to work together for the betterment of all Oregonians. Thank you for your consideration. Sincerely, Mayor Joe Buck Respect, Excel ence. Trust. Sc: 503 635 0213 380 A AVENUE ApTp� WENT USWEURUR397034 WWW.LAKEOSWEGO.CITY 1,A E O Off CITY COUNCIL rr ., n � � o °REGDr4 May 9, 2023 House Committee on Rules: Public Hearing for HB 3414 Re: Support for HB 3414-5 amendments and opposition for-6 amendments Dear Honorable Chair Fahey and Members of the Committee: On behalf of the City of Lake Oswego and the City Council, I am testifying in support of HB 3414 -5 amendments as presented by Representative Gamba and oppose -6 amendments. Housing production is a top concern for all communities throughout Oregon, including Lake Oswego. We share your desire for increasing supply and building housing that is affordable for a range of incomes, however, HB 3414 as presented in its current form ignores years of thoughtful community planning and adds new layers of bureaucracy. It forces local governments to approve variances without any requirement for builders to demonstrate that such variances will actually increase housing production or affordability. In many communities, including Lake Oswego, HB 3414 would simply lead to the construction of larger, more expensive homes, thereby undermining efforts to provide housing at a broader range of incomes. While we agree with the good intention of the bill, the City of Lake Oswego opposes the base concepts of HB 3414 as a mechanism to increase housing production and affordability. The City of Lake Oswego's main concerns of HB 3414 are: Local governments do not need State mandated variances. This highly regulatory approach loses sight of local context and forces a one size fits all policy. Like many cities throughout the state, the City of Lake Oswego already has adopted City Code that allows for several types of variances. Our review and process for variances are clear, predictable, and processed in a timely manner without creating onerous amounts of work for our applicants. In the last 5 years, the City of Lake Oswego has received 69 applications for variances to construct residential development, all of which were approved. We pride ourselves on working with developers to achieve their goals while upholding the intent of the Code and community standards. Lake Oswego has successfully increased our housing supply in the last five years by approximately 836 units (650 of which were multi-family units) and issued final occupancies for approximately 215 single-family dwelling replacements in the same period. While we are largely built out, we have focused on higher-density and mixed-use infill development to encourage housing variety and affordability (for more details, see Attachment 1). We have successfully increased our housing stock while preserving the character of our neighborhoods, maintaining community livability, balancing growth with environmental stewardship, supporting the vitality of our business Respect, Excel ence. Trust. Sc: ATTACHMENT 3/PAGE 1 OF 2 503-635-0213 380 A AVENUE PO BOX 369 LAKE OSWEGO,OR 97034 WWW.LAKEOSWEGO.CITY Page 2 of 2 community, and investing in vital infrastructure to support this housing. We urge the Committee to focus on giving us the tools we need to facilitate housing production and affordability, not introducing new regulatory burdens or more bureaucracy. HB 3414-4 and -6 amendments contradict adopted state housing production priorities and provide developers a bypass to ignore shared priorities. Local governments will not be able to enforce housing production strategies, protection of natural resources, transportation infrastructure standards, climate-friendly regulations, or new urban growth area development and it will prevent cities from meeting recent state mandates including: • Middle housing code (HB 2001, 2019), • Housing Production Strategies (HB 2003, 2019) and the Oregon Housing Needs Analysis (OHNA) (HB 2001, 2023) • Climate Friendly and Equitable Communities (CFEC) Rules City staff should not bear the burden of providing substantial evidence in the record for the variance request. This means staff time and capacity will divert from timely approval of land use applications for housing and associated construction permits, which loses sight of the end goal of housing production. Bill language should be clear that the applicant is responsible for providing evidence that the requested variance will increase housing production or affordability as the goal of this bill, and the bill should not apply to single-family housing. Lastly, the broad variance language in HB 3414 and the -4 and -6 amendments create an increasingly ambiguous and discretionary review process for housing projects, which undermines the importance of clear and objective standards (a clear path for developers). This will shift the focus of City staff, slow the development review process, and make it difficult for cities to hit housing production targets. The City of Lake Oswego respectfully urges the committee to support -5 amendments and provide more time for thoughtful coordination with local governments to refine HB 3414. We believe the Committee should focus on localized solutions to achieve our shared goals of housing production, we support the -5 amendments as presented by Representative Gamba and oppose -6 amendments. The -5 amendments are workable improvements to HB 3414 that are tied to housing production or affordability and protect community standards, but the bill needs more refinement on how this can be achieved by cities. We look forward to working together to move policies forward that support the production of needed housing. Thank you for the opportunity to provide comment. Sincerely, - Mayor Joe Buck Respect, Excel ence. Trust. S..`• ATTACHMENT 3/PAGE 2 OF 2 503-635-0213 380 A AVENUE PO BOX 369 LAKE OSWEGO,OR 97034 WWW.LAKEOSWEGO.CITY