Agenda Item - 2024-03-19 - Number 9.1 - Mitigation Requirements for Single-Family and Duplex Development (PP 24-0001) 9.1
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Subject: Mitigation Requirements for Single-family and Duplex Development (PP 24-0001)
Meeting Date: March 19, 2024 Staff Members: Erica Rooney, City Engineer
Jessica Numanoglu, CD Director
Report Date: March 8, 2024
Departments: Engineering and Community
Development
Action Required Advisory Board/Commission Recommendation
❑ Motion ❑ Approval
❑ Public Hearing ❑ Denial
❑ Ordinance ❑ None Forwarded
❑ Resolution ❑X Not Applicable
❑ Information Only Comments:
❑X Council Direction
❑ Consent Agenda
Staff Recommendation: N/A
Recommended Language for Motion: N/A
Project/ Issue Relates To: Council Goal to "Improve transportation connections, mobility
and safety for all travelers and all types of trips in Lake Oswego"
Issue before Council: Consider whether to direct staff to initiate the process to adopt code
amendments to require public improvements as mitigation for the impacts of new single-
family and duplex development.
❑X Council Goals/Priorities EAdopted Master Plan(s) ❑Not Applicable
ISSUE BEFORE COUNCIL
Should the City undertake a process to amend the Community Development Code to require
mitigation for new single-family and duplex dwellings through the construction of public
improvements to offset the impacts of the development on public infrastructure?
EXECUTIVE SUMMARY
In June 2023, Council adopted ministerial mitigation code amendments to require the
construction of public improvements for new triplex, quadplex and cottage cluster
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developments (Ordinance 2908). The amendments were necessary to address a consequence
of the Middle Housing code amendments, which resulted in there no longer being any code
authority to require public improvements for Middle Housing because those housing types
were reclassified from Minor to Ministerial Development. At the public hearing for Ordinance
2908, Council expressed concerns that new single-family and duplex dwellings are not also
required to construct public improvements and directed staff to pursue a project plan to
consider mitigation requirements to also apply to single-family dwellings and duplexes to
assure that all development is required to mitigate its impact on public facilities, most
specifically associated with transportation and mobility.
This report provides background on the City process to review and implement public
improvement requirements for residential development and discusses impacts and issues of
requiring mitigation for new single-family and duplex development for the Council's
consideration. Staff will present case study examples at the work session.
BACKGROUND
Adoption of Ministerial Mitigation Requirements for Middle Housing (Ord. 2908)
On June 6, 2023, the City Council approved Ordinance 2908 (LU 22-0031), adopting code
amendments to continue the prior requirement for public improvements to mitigate the
impacts of middle housing development (triplexes, quadplexes and cottage clusters). These
amendments were adopted following the City Council's adoption of Middle Housing code
amendments to comply with House Bill 2001 (2019) (LU 22-0007) and were necessary to
address two issues:
1. Under state law, middle housing must be reviewed under a ministerial' process, and at
the time, the Community Development Code (CDC) did not allow for the requirement of
public improvements under a ministerial process; and
2. To comply with the "clear and objective standards for housing" in ORS 197.307(4). The
need for clear and objective requirements to mitigate the impacts of proposed
development exists for any housing development, regardless whether the housing is
classified as minor development2 or ministerial development under the CDC.
During the review of the Ordinance 2908 code amendments, staff explained that consistent
with the prior code classification of detached single-family dwellings, accessory dwelling units,
(ADUs), and duplexes as ministerial development, and because mitigation conditions of
approval were only imposed on minor and major development, the middle housing mitigation
requirements were not proposed to be applied to development of detached single-family
1 A ministerial development is a decision made based on clear and objective standards without public notice or
opportunity for appeal.An example of a ministerial decision is the review and approval of a building permit.
2 A minor development is a decision that involves a more discretionary level of review than a ministerial decision
and is subject to public notice and opportunity for appeal. Examples of minor development decisions are the
review and approval of multi-family dwellings and land divisions.
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dwellings, ADUs, or duplexes3. The Council expressed interest in extending the mitigation
requirements to also apply to single-family dwellings and duplexes and directed staff to pursue
a project plan to consider this separate from Ordinance 2908. For more detailed background on
the Ordinance 2908 code amendments, see the public record file for LU 22-0031 (link provided
at the end of this report). [LOC 50.06.008.1.b, exception).
Existing Ministerial Mitigation Requirements
Under existing code, ministerial mitigation for residential development is required when a new
building permit increases residential density by additional dwelling units or involves the
creation of lots by land division or lot line adjustment, except that mitigation is not required for
the construction of a new detached single-family dwelling on an existing lot, an accessory
dwelling unit (ADU), a duplex, or for replacement of existing dwellings (demolition).
Ministerial mitigation that may typically be required for residential development is summarized
as follows:
• Curbs and gutters may be required to be constructed along the property frontage and
adjacent abutting streets, if curbs and gutters do not exist there already, or across the
street from the property if the City's Public Facility Master Plans direct them to be
constructed in that location. Within the "Rural Fringe"—an existing designation which
includes the City's urbanized fringe and newly-annexed areas—existing policy requires
development of asphalt pathways with drainage swales instead of curbed concrete
sidewalks; accordingly, both a pathway and swale may be required to be constructed.
• Developments contiguous to unpaved or substandard roads would generally be
required to install pavement on those roadways from the curb or edge of the street to a
set distance beyond the centerline of the road; this distance is determined based on the
classification of the unpaved or partially-unpaved street, with higher classification
streets requiring more paved area. Gravel shoulders are generally required in the Rural
Fringe area and for existing uncurbed streets, in addition to other road standards
applicable to those areas. See Table 1: Functional Classification Design Characteristics,
below, for more detailed information about the street improvements required for
different street classifications as outlined in the City's adopted Transportation Systems
Plan (TSP).
3 Single-family dwellings, duplexes and ADUs must still meet plumbing and other codes that require adequate
utilities and compliance with fire and life safety standards.
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Table 1: Functional Classification Design Characteristics
Raised
Median/ Buffer/
Functional Right- Paved Travel Left Turn Bike Swale/ Landscape Utility
Classification of-Way Width Lanes Lane Parking Lanes Ditch Strip Sidewalks Easement
1
2 x 6' 8'Ditch 00- 7478' 4x 14' 2x8'** 2x5,5' 2x8' 2x20'
Major Arterial 105' 12'* 2 x 7.5'14' -
2 x 6 8'Swale
75-80' 50-54' 2x12' 2x8'*** 2a5,5' 2 x 6' 2 x 10'
Optional Arterial 2 x 7.5'
Major Collector 75-80' 48-52 2 x 12' Optional (Optional) 2 x 6' 2 x 5,5' 2 x 6' 2 x 10'
Neighborhood Collector
w/parking one side 70' 38' 2 x 12' - 2 x 7' - - 2 x 5,5' 2 x 6' 2 x 5'
2x6' 8'Swale
60' 34' 2x12' - - 2x5,5' 2x6' 2x5'
w/bike lanes 2 x 7.5'
Local Residential Street
w/parking both sides 50' 28-32' 14-18' - 2 x 7' - - 2 x 5,5' 2 x 5' 2 x 5'
w/parking one side 50' 22' 15' - 7' - - 2 x 5 5' 2 x 5' 2 x 4'
w/no parking 50' 22' 15' - - - - 2 x 5.5' 2 x 5' 2 x 4'
narrow wino parking 50' 20' 10' - {Optional} - - 2 x 4'
Local Commercial/ 60' 44' 24' - 2 x 10' - - 2 x 5.5' 2x5' 2x4'
Industrial Street
*Optional 3"travel lane
**Optional in downtown only
***Optional in community hub
• Sidewalks/ Pathways may be required to be installed, pursuant to applicable designs
and specifications, and in accordance with projects identified in the TSP. If the street
improvements can't be constructed along the site frontage that would extend an
existing an abutting sidewalk/pathway from an adjacent property without creating any
drainage impacts or unsafe pedestrian conflicts with traffic, then right-of-way
dedication and sidewalk improvements are required to provide mitigation for any
increase in use to the transportation system. If the sidewalk/pathway is not feasible,
then a gravel shoulder may be required to provide some space for pedestrian refuge
along the edge of the street.
• Water, sanitary sewer, and storm drainage lines are required to be upsized when
needed to provide adequate capacity to the development, in accordance with the City's
accepted Public Facilities Master Plans and Engineering standards.
• Public utility easement standards are based on the requirements of the franchise
utilities (e.g., PGE, NW Natural, phone and cable providers). These facilities may require
additional easements outside of the public right-of-way, if sufficient room does not
exist, and is most common in subdivision developments. This easement area does not
include public services such as water, sewer, or storm, which are typically installed
within the public right-of-way.
• Sufficient right-of-way dedication is required if existing rights-of-way of streets
contiguous to the property are not adequate in width to meet applicable street
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standards, accommodate required drainage facilities, or to provide the necessary width
in order to allow for future infrastructure improvements.
Determining Feasibility of Requiring Public Improvements
Staff determines what infrastructure improvements are required for development on a case-by-
case basis. The code does not prescribe specific numerical limits for what must be provided to
offset different levels of added density (for instance, a maximum 200 linear feet of sidewalk for
a triplex), but instead generally requires that public improvements be installed pursuant to
applicable standards. Using sidewalks as an example, applicable standards include the sidewalk
standards in LOC 42.08.400, design overlay standards, the street design standards in the City's
TSP, Rural Fringe Guidelines in the transition neighborhoods and Public Works/Engineering
standards. The code requires that development mitigation be as necessary to comply with the
applicable public facility plan for the affected infrastructure. LOC 50.06.008.3.
The code also includes provisions that allow the City Engineer to defer, reduce or eliminate the
specific mitigation required upon a finding that:
(1) there is existing infrastructure that meets the standards;
(2) it would not be the appropriate time to construct a particular public improvement -
typically because the improvement would require a more extensive design analysis that
would include adjoining properties and drainage conveyance facilities - in which case
the City would require the recording of a covenant on the property or properties to
ensure that the improvements are constructed at the appropriate time (this could be
through the establishment of a local improvement district (LID) or other future
assessment; see discussion under the Legal Issue subsection, below); or
(3) the required public improvements exceed the "rough proportionality" threshold
that is legally permissible under the code (see discussion under the Legal Issue
subsection, below). [LOC 50.06.008.3.e].
Appeal Option for Required Public Improvements
In circumstances where applicants believe that improvements required by the City exceed what
would be "roughly proportional" to the proposed development, the code includes multiple
options for applicants to seek a remedy to design/install fewer public improvements than
required. The code includes language that allows development applicants to request a hearing,
through a minor development process, to challenge the City's determination of rough
proportionality and design/install fewer public improvements than the City's code would
otherwise require (LOC 50.06.008.7.a). To date, the City has not received any challenges to the
determination of rough proportionality.
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Existing Ministerial Mitigation Review Process
The Engineering staff reviews all land use and/or building permit applications for triplexes,
quadplexes, cottage clusters and all minor or major development applications to determine
required mitigation for each development and reviews public improvement plans for
compliance with City standards.
The applicant/owner is required to hire a licensed civil engineer and other professionals, as
applicable, to properly design the improvements in accordance with City standards and
conditions of approval. The public improvement plan process involves extensive review by
Engineering staff to confirm the plans comply with the conditions, meet City standards and are
acceptable for long-term maintenance by the City.
Once plans have been approved, the permit is issued and a private contractor begins the
construction work. City staff from the Engineering and Maintenance Departments are involved
during the construction phase to ensure the project is constructed according to the approved
plans and that the final project is acceptable.
Other activities by staff include collection of a performance and maintenance guaranty,
collecting permit fees, leading construction meetings, conducting site inspections throughout
the project, establishing a final close-out and punch list, collecting final as-builts from the
design consultant, loading as-built information into the City's GIS system, warranty reviews and
adjustments, and then final acceptance and closeout. All of this work involves many hours of
coordinated work from multiple staff members with specific skill sets throughout Public Works
(Engineering and Maintenance). In 2023, the Engineering staff logged over 4000 hours on this
type of work, which equates to 2 FTE, and does not include the time and effort by Maintenance
operations staff to support this work.
DISCUSSION
In determining whether to require mitigation for new single-family and duplex development,
the Council should consider the following issues and impacts:
1. Engineering Department Workload/Staffing Impacts:
Assuming the concept is to consider requiring the same frontage improvements described
above for the development of a new single-family (NSF) and duplex dwellings on existing lots,
this will increase the workload for Engineering staff because they do not currently review
mitigation for NSF and duplex dwellings on existing lots. Based on the number of NSF building
permits approved last year, Table 2: Number of Approved NSF Building Permits, 2019-2023
shows that roughly half of the NSF permits in each of the last five years either have constructed
or are required to construct some amount of frontage improvements associated with a land use
development and was reviewed by Engineering staff per the process outlined above. The other
half were permits for NSF dwellings that were not associated with land use development and
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therefore were not reviewed by the Engineering staff to determination mitigation
requirements.
Table 2: Number of Approved NSF Building Permits, 2019-2023
Total Permits by #of Total Permits with
Year NO Mitigation
Required*
2019 69 35
2020 62 31
2021 54 32
2022 59 38
2023 44 26
Average/year 58 32
*This represents the number of additional NSF permits that would need to be reviewed by staff each year.
If frontage improvements were to be required for every NSF building permit, the number of
applications the Engineering staff would need to review and manage the design and
construction of the individual lot improvements would approximately double. Currently, the
Public Works staff from Engineering and Maintenance dedicate two full-time-equivalent staff to
this effort on average. Two more positions would need to be added if the number of permits to
review and manage is doubled.
2. Constructability Considerations for Single Lot Frontage Improvements:
Much like happens on larger development frontage improvements, there are a myriad of design
challenges with designing and constructing improvements within pre-existing rural
infrastructure limitations. Considerations for requiring mitigation on individual lots means
analyzing a number of design aspects that need to be balanced and accommodated:
• Drainage impacts and conveyance, including potential significant impacts to adjacent
neighbors.
• Development of a required stormwater treatment facility to address runoff from new
impervious area of sidewalk and road widening. This creates more challenges on a lot-
by-lot basis. For instance, it could result in a new stormwater planter being required for
the sidewalk along the lot of only one home on a street, increasing maintenance costs
for the City with little public benefit.
• Sidewalk compliance with ADA design.
• Pedestrian safety transitioning from shoulder areas to new sidewalks.
• Overhead utility conflicts, such as utility poles, guy wires, transformers, etc.
• Parking impacts associated with installation of sidewalks.
• Tree removal to accommodate the new improvements.
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• Driveway approach transitions and associated grading and widening.
• Confirmation of sufficient right-of-way (ROW) to accommodate the improvements in
accordance with the TSP.
Mitigation is generally required for all land division applications with the types of
improvements varying anywhere from full street improvements for a new subdivision to more
modest improvements (e.g., a street light and gravel shoulder) for a 2- or 3-parcel partition. We
would expect more modest improvements would be required for NSF and duplex development
on existing lots.
In the past six years staff approved 52 partitions and four subdivision land use applications,
requiring various levels of mitigation. Table 3: Types of Mitigation Required for Land Division
Applications from 2018-2023 provides an overview of the general types of improvements that
were required for these land divisions:
Table 3:Types of Mitigation Required for Land Division Applications from 2018-2023
General Types of Mitigation Required #of
Applications
Full or Extensive Street Improvements (e.g., ROW
dedication; water and/or sewer extension;storm; 4
hydrant;street with sidewalk/pathway; and street
lights)
ROW dedication; street light; fire hydrant 1
LID Waiver; street light; reconstruct street 2
pavement
LID Waiver; ROW dedication; sewer extension; 3
street light _
ROW dedication; sidewalk/pathway; street light _ 19
LID Waiver; ROW dedication; gravel shoulders 25
No public improvements (sidewalk exists) 2
Of the 56 land divisions in Table 3, two already had existing frontage sidewalks and did not
require additional mitigation, while 23 were required to construct sidewalks as a condition of
approval. More than half of the land divisions required LID waivers because construction of
sidewalks or other public improvements was not practical (see Legal Issue subsection, below
for more info on LID waivers).
In conversation with other local municipalities such as Tigard, Tualatin, Oregon City, and
Milwaukie, they have the same practices that Lake Oswego does. Frontage improvements are
required for partitions, subdivisions, and major development. However, the cases of single-
family residential frontage improvements on local roads without improved infrastructure are
extremely rare.
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Fee in lieu of Improvements Option
One option to consider if it isn't practical to construct improvements in a piecemeal approach,
would be to implement a "fee in-lieu" program that would assess costs to these developments,
collecting the money over time, with the intent that as collected funds increased, they could
eventually be used to build a corridor-level improvement in that area. For example, the cities of
Portland and Milwaukie provide this as an option for single-family residential development on
unimproved or substandard roadways.
The City of Portland has the Local Transportation Infrastructure Charge (LTIC) that was
implemented in 2016 and is for single-family in-fill development. The charge is collected at the
time of building permit for residential development along specifically identified unimproved
local streets that lack curbs in residential zones, including some that are gravel, and some that
have only a narrow asphalt roadway without curb and sidewalk. The current fee is $600 per
lineal foot of property frontage, with maximums set based on zoning. Exemptions are available
for low-income households, affordable housing, and accessory dwelling units. There are also
maximum fee amounts set for different size lots, the highest cap being $72,000 for a 20,000
square foot lot. Based on Portland's 2022 Revenue and Expenditure Report for the LTIC
program, the average annual income is $1.1 million. They have over$15 million in identified
capital work identified in the affected areas; although the overall need for improvements is
much larger.
The City of Milwaukie's fee in-lieu program has different fees for each type of infrastructure—
transportation, water, stormwater, wastewater, and stormwater management. The City may
accept this fee in lieu of construction on any required facility improvements if any one of
several criteria are met. One of the key criteria is that "required improvement are not feasible
due to the inability to achieve proper design standards."The fees are collected and constrained
to be used to leverage future capital work within the specific neighborhood area, or within
1,000 feet of the payee location. Current 2024 rates in Milwaukie are as follows:
Transportation $340 per lineal foot of frontage
Water $375
Stormwater $265
Wastewater $250
Stormwater Mgmt. $14 per square foot
In both of the programs listed above, the lineal cost per foot was determined based on past
project costs, and they appear to have annual indexing adjustments to keep up with inflationary
costs in construction.
For purpose of determining what the financial impacts of this type of program could be if
implemented here in Lake Oswego, the following table gives some perspective of what the fee
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would look like if applied to typical lots in the First Addition (FAN) and Evergreen
neighborhoods:
Fee In- Lieu of Improvements Scenario
Lineal
frontage
Neighborhood (ft.) $350(1) $500 $600(2)
FAN,typical frontage 50 $17,500 $25,000 $30,000
FAN, corner lot 170 $59,500 $85,000 $102,000
Evergreen, typical frontage 120 $42,000 $60,000 $72,000
Evergreen, larger corner lot 190 $66,500 $95,000 $114,000
(1) Similar to Milwaukie's Rate
(2) Similar to Portland's Rate
Assuming that during an average year 32 NSF or duplex dwellings would pay into such a
program, and assuming it was approximately $30,000 per frontage (the Portland rate), the
annual income could be $960,000.
These programs require long-term investment into an administrative program that can track
the funding and disperse the funds in the future when projects are undertaken and are also
subject to the Nollan/Dolan test of nexus and rough proportionality (see discussion under Legal
Issue, below). Current pedestrian-related projects that the City of Lake Oswego is undertaking
at this time are running approximately$1 million each for projects that are about 1,500 feet in
length, with very little stormwater management because of pre-existing facilities. New projects
where a curb does not currently exist will require stormwater facilities, such as seen on D
Avenue, and adds significant costs to the per lineal foot costs. It could take a significant amount
of time to collect the necessary funds from a fee program in order to do one project. It may be
complicated to ensure that the funds stay in the general area of where they were collected,
which will increase the delay time before any improvements could occur.
3. Legal Issue: Nollan/Dolan Standards
When local government requires a development to mitigate for its specific impacts upon the
streets, sidewalks (pathways), bicycle paths, parks, water and sewer systems, street lights and
traffic control signs and devices (i.e., public facilities), there must be an essential nexus
between the "legitimate governmental interest" and the impact resulting from the
development, and the degree of public facilities mitigation required of the developer must be
roughly proportional to the extent of the development's impact upon that public facility.
Nollan v. California Coastal Comm'n, 483 US 825 (1987) and Dolan v. City of Tigard, 512 US 374
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(1995). If not, then the requirement would be a "taking without just compensation," in violation
of the Fifth Amendment of the US Constitution.
In Lake Oswego, the Nollan/Dolan standard is roughly stated in the Conditioning Authority, LOC
50.07.003.5.a.iii by the italicized text:
"The condition is reasonably related to alleviation of a need for public services or
facilities created or contributed to by the proposed development. As used in this section,
"public services or facilities" includes sewer, water, surface water management, parks,
open space, streets, sidewalks, and pathways."
A major consideration in requiring mitigation for NSF and duplex dwellings on existing lots
under the Nollan/Dolan test of nexus and rough proportionality for new exactions is whether
the mitigation is occurring on an "un-exacted"4 lot or an "exacted" lot, where prior
development is replaced with new, similar development. For example, an owner demolishes
and replaces a 1930 single-family dwelling with a new single-family dwelling. In terms of the
impact on the public facilities, the demolition and new construction of the same type of
dwelling (single-family) results in no change upon the public facilities, so there is no
transportation impact of the street system; however, at the time the original dwelling was
constructed, no exactions were made because it was constructed prior to exaction authority. As
the impacts of residential development had not previously been mitigated, this is an example of
an "unexacted" lot.
Dolan would not prevent now exacting mitigation to the extent of the permitted development—
replacement single-family dwelling—as Dolan is a limitation on the amount of the exaction
(e.g., "rough proportionality"), not upon any exaction at all. Dolan does not preclude deferred
exactions. However, the "nonconforming rights" section of the code [LOC 50.01.006.4] may
preclude deferred exactions in certain cases: development that was constructed prior to the
establishment of the exaction code authority would have nonconforming rights under LOC
50.01.006 that would preclude applying exactions to the new development permit if the
dwelling were destroyed due to an "act of God" (e.g., a fire or flood), but could be applied if an
owner intentionally demolished the dwelling for the purpose of remodeling or replacement.
Dolan also would not preclude additional exactions on "exacted lots" to the maximum amount
of "rough proportionality." In situations where exactions were applied to a development
previously (for instance, a subdivision from the 1970s that was required to dedicate ROW and
install curbs and gutters, but no sidewalks), it is possible to apply additional exactions (e.g., a
sidewalk) if the dwelling on the existing lot is replaced as long as the total (past and present)
mitigation required for that lot meets the Nollan/Dolan test of nexus and rough proportionality.
Staff would need to apply this on a case-by-case basis since the replacement of an existing
4 In legal terms,where mitigation of impacts of development are required,this is referred to as"exacting"the
mitigation.
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dwelling would not increase the impacts to the transportation system and it would be
necessary to determine the total exactions previously made.
Options When Construction of Public Improvements is not Feasible
As discussed previously, there are common situations when some or all of the mitigation that is
required of a development cannot feasibly be installed by the developer at the time of
construction. This situation is more likely to arise on a lot with a replacement single-family
dwelling because the lots tend to not be large enough to divide and so have shorter street
frontages, and the replacement of older dwellings are more likely to be in an area with no
existing sidewalks or with piecemeal segments of sidewalks.
There are two tools that the City has used when a street improvement is needed but it is not
feasible to construct at the time for a systemic reason:
• Local improvement district (LID)waivers of remonstrance: A LID can be formed to include
all of the benefited properties by the improvement, with the cost proportioned among the
properties based on the benefit received. The waiver itself does not have much "Dolan"
effect—it removes that property owner's right to object to the formation of the district for
a period of six months. LOC 40.02.050(1). Once the district is formed, the owner may
contest the calculation of the degree of benefit within the assessment process, thus
meeting the "rough proportionality" requirement. LID waivers are a very commonly
required; however, because the City does not have a policy or program to implement LIDs,
staff is not aware of any actual public improvement construction that has resulted from a
LID required by the City since at least the 1970s.
• Covenant: Rather than requiring a LID district formation and assessment, a covenant would
require the individual property owner to install the improvement when it is ready to be
constructed on a systemic basis. It is merely a delay in the timing of the installation of the
mitigation requirement that would have been otherwise installed at the time of
construction of the residence. The covenant is recorded against the property and the
owner's obligation is triggered upon notice by the City. Legally, this delayed installation of
the mitigation improvement is easy; in practice it is problematic because when ownership
changes, the obligation may not have been reflected in the sales price or the new owners
are not aware of the requirement and are resistant to comply (even though they are
recorded and appear as exceptions in their title report; apparently not all purchasers read
their title report prior to purchase). This tool has been used by the City in the past on very
few occasions, but is avoided in most circumstances because of owner objection.
In-lieu Fee as an Alternative to LIDs and Covenants
Because of the disadvantages of both the LID formation and Covenant implementation process,
a fee in-lieu (discussed previously, above) could be an alternative option the city could consider
to address the mitigation requirement. Similar to property exactions, an in-lieu fee must
comply with the Nollan/Dolan test of nexus and rough proportionality. Thus, an in-lieu fee must
be targeted to mitigate the negative impact of development upon the same interest that the
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fee will be used to mitigate. For example, an in-lieu fee used for sidewalk and street
improvements would be of the same interest to mitigate new development that generates
more vehicle or pedestrian traffic. In this example, the in-lieu fee would be calculated to equate
to (or be less than) the actual construction costs of the delayed mitigation improvement, with
the City holding the funds until the improvement is ready to be made on a systemic basis that
will include the site's frontage, and the project is initiated within a reasonable period of time
to capture the impact of the development (-10— 15 years).
In-lieu fees may not be used to fund the general public street improvement program; rather,
the funds must be used to address negative impacts to the street system that are "roughly
proportional" to the impact of the particular development and that is in the area of the
development site. Thus, an in-lieu fee program should provide for a means to determine the
actual construction cost (so that an owner would not be required to pay more than the
construction cost of the improvement) and include a tracking program to assure that the
money is used for the degree of street improvement required of that property in the same
area.
Code & Comp Plan Amendments to Require Mitigation for all NSF and Duplex Development
The actual code and Comprehensive Plan amendments that would be necessary to apply
ministerial mitigation requirements to NSF and duplex dwellings are relatively straight-forward,
but the implementation, as discussed above, would be more complex. Given the potential
impacts to neighborhoods and on the cost of constructing NSF and duplex dwellings, sufficient
public engagement will be important. Below is a draft work plan to consider the amendments if
directed by the Council.
Draft Work Plan
Spring 2024 PC Work Session #1 (Background and Work Plan)
Summer 2024 Public Engagement
September 2024 PC Work Session #2 (Direction based on public feedback)
October 2024 Council Work Session #2 (Direction based on public feedback)
Fall 2024 Draft Amendments & send DLCD and Metro Notice
December 2024 PC Public Hearing and Findings
Early 2025 City Council Public Hearing and Findings
Summer 2025 Deferred implementation to allow for hiring of new Engineering staff
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ALTERNATIVES OR ADVANTAGES AND DISADVANTAGES
For comparative purposes, it is helpful to look at the various impacts to the development and to
the City regarding the various options. The table below is a summary of the issues, and what
impact each option would have.
Retain Existing Proposal to Require Frontage Provide Fee-In-Lieu of Option to
Practice Improvements Frontage Improvements
Ease of No change Requires a 6-9-month workplan Requires a 6-9-month workplan
Implementation and public engagement, and and public engagement, and
eventual code changes eventual code changes
Cost to Developers No change or Increased cost to hire designers Increase cost to developers for
increase and contractors _ one-time payment
Effect of No change or Adds extra time to complete No change or increase
Development increase improvements prior to Final
Timelines Occupancy of home
Neighborhood No change Adds urban improvements in No change; until future projects
Character piecemeal order come through within the time
period
Implements Does not provide Adds sidewalks or pathways in Delays implementation of
Sidewalks or sidewalks or piecemeal or fragmented sidewalks or pathways until
Pathways pathways approach over a long time future, but within the time
period period, when adequate funds
are available
Stormwater Does not May cause impacts to adjacent Does not change existing
Impacts in the typically affect or properties—must ensure this stormwater situation in the area
Public ROW change the doesn't occur by proper design.
existing Requires stormwater facilities
stormwater (i.e. planters) in ROW if no
situation in the conveyance exists.
area
City Staffing No new staff Requires at least new 2 FTE Increase in staff workload in
Impacts required Engineering and Finance
City Maintenance Does not change Would require increased level of Does not change the current
Impacts current level of service to maintain the level of service until such time
service stormwater system (e.g., as a full project is implemented
planters)
FISCAL IMPACT
For Builders/Developers
Adding the requirement for frontage improvements for all NSF and duplex permits on existing
lots would have a financial impact on builders/developers, which could increase the cost of NSF
and duplex housing. If required to build the improvements, builders/developers would need to
hire engineers to develop the plans, obtain and pay for the permit from the Engineering Dept.,
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and then construct the improvements. If a fee in-lieu of option is provided, this will be an
additional cost added to the other fees already associated with development. Either option
increases the overall cost to the builder/developer.
For the City of Lake Oswego
The fiscal impacts of expanding the public improvement permitting process to include frontage
improvements for all single-family and duplex permits would require at least two more FTE in
Public Works. These staff would be managing the design plan reviewing, permitting, and
construction work the developers conduct on the frontage. This would be approximately
$400,000 more per year in the Engineering Fund, which receives its resources from the four
utility funds. The permit fees for this work are not full cost-recovery.
If the fee in-lieu is the exclusive option, it's possible that less staff would be required; however,
it will require expansion of work effort or staffing levels in Finance and Engineering to
administer and manage the funding.
Staff reports and public meeting materials for Ordinance 2908(Ministerial Mitigation for triplexes, quadplexes and
cottage clusters)can be found by visiting the project webpage. Use the link below to visit the City's"Project" page.
In the"Search" box enter LU 22-0031 then press"Enter":
https://www.ci.oswego.or.us/all-projects
Respect. Excel'erce. Trust. Service.
503-635-0215 380 A AVENUE PO BOX 369 LAKE OSWEGO,OR 97034 WWW.LAKEOSWEGO.CITY