Agenda Item - 2024-07-16 - Number 09.1 - Housing Production Strategy Report (PP 22-0005) 9.1
,A,A E 0 COUNCIL REPORT
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OREGO\-\
Subject: Housing Production Strategy (PP 22-0005)
Meeting Date: July 16, 2024 Staff Member: Erik Olson, Long Range Planning
Manager
Report Date: July 2, 2024
Department: Community Development
Action Required Advisory Board/Commission Recommendation
❑ Motion ❑ Planning Commission Recommends Approval
❑ Public Hearing ❑ Denial
❑ Ordinance ❑ None Forwarded
❑ Resolution ❑X Not Applicable
❑ Information Only Comments: The Council recently provided direction
❑X Council Direction regarding which strategies to include in the draft
❑ Consent Agenda Housing Production Strategy (HPS) at a joint study
session with the Planning Commission on April 2,
2024.
Staff Recommendation: Include the Multiple Unit Property Tax Exemption (MUPTE) and
Homebuyer Opportunity Limited Tax Exemption (HOLTE) strategies in the City's Housing
Production Strategy (HPS) Report.
Recommended Language for Motion: N/A
Project/ Issue Relates To: Council Initiative to "Continue work on key housing initiatives,
including the housing production strategy..."
' Issue before Council (Highlight Policy Question): Developing a Housing Production Strategy
to meet the requirements of ORS 197A.100 [House Bill 2003 (2019)]
❑X Council Goals/Priorities ❑x Comprehensive Plan ❑Not Applicable
Continue work on the housing
production strategy
ISSUE BEFORE COUNCIL
Staff is seeking further direction regarding whether to include the Multiple Unit Property Tax
Exemption (MUPTE) and Homebuyer Opportunity Limited Tax Exemption (HOLTE) strategies in
the City's Housing Production Strategy (HPS) to meet the requirements of ORS 197A.100.
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EXECUTIVE SUMMARY
The City is required by ORS 197A.1001 to adopt an HPS that documents the specific tools,
actions, and policies that the City plans to take to address the housing needs identified in the
2023 Housing Needs Analysis (HNA) by December 31, 2024.
Staff has developed a Draft HPS document based on input from the Council, Planning
Commission, HPS Task Force, and members of the general public (Attachment 1). The Council
will conduct a study session on July 16 to provide direction regarding whether to include the
MUPTE and HOLTE strategies in the draft of the HPS that will go to public hearing. This will be
the last opportunity for the Council to provide feedback on the Draft HPS document prior to the
public hearing tentatively scheduled for October 15.
BACKGROUND
The Council adopted the 2023 HNA on October 17, 2023. The Council must now develop an HPS
to identify a set of actions that the City will take to facilitate housing development that will best
meet the needs of the community. Per ORS 197A.100, an HPS must document the specific tools,
actions, and policies (collectively "strategies") that the City plans to take to address the housing
needs identified in the HNA. The HPS includes the City's timeline for adopting and
implementing each strategy.
DISCUSSION
Public Engagement Update
Public engagement and outreach to identify an initial set of strategies for inclusion in the City's
HPS began in October 2023 and is still actively ongoing. So far, this has included presentations
at the Diversity, Equity and Inclusion Advisory Board, the 50+ Advisory Board, the Chamber of
Commerce Government Affairs Committee, the November 2023 Mayor's Roundtable event,
and the Fall 2023 Kruse Way Economic Forum, as well as one Council meeting, one joint
meeting with both the Planning Commission and Council, four Planning Commission meetings,
and five meetings of the HPS Task Force.
An HPS Community Forum event was held on Thursday, March 14, and the City hosted an
Online Survey that was made available to the public between March 13 and March 31, 2024.
Both the Community Forum and Online Survey included information on the recommended
strategies and opportunities for public input. See the Public Engagement Summary (Appendix B
to Attachment 1) for a summary of the results of these engagement activities.
The Council and the Planning Commission held a joint study session on April 2 to provide
further direction to staff regarding which strategies to include in the Draft HPS. The meeting
included separate straw polls for the Council and the Planning Commission to determine
1 Cited ORS Ch. 197A statutes in this report available at
https://www.oregonlegislature.gov/bills laws/ors/ors197A.html (Note:former ORS Ch. 197 sections renumbered
in 2023)
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whether each body recommended moving forward with the various strategies included in the
Initial Strategy Recommendations Memo (Attachment 3). Both the Commission and Council
recommended including all of the Recommended Strategies in the Draft HPS. Regarding the
Strategies Needing Further Discussion, though the Planning Commission additionally
recommended including the Multiple Unit Property Tax Exemption (MUPTE) in the Draft HPS,
the Council ultimately did not recommend including this strategy. Other strategies discussed at
the meeting were not recommended for inclusion in the Draft HPS. See the Public Engagement
Summary (Appendix B to Attachment 1) for more detailed straw poll results from the meeting.
Most recently, the HPS Task Force conducted its eighth and final meeting on June 21 and the
Planning Commission held a work session on June 24 to review and provide input on the draft
HPS prior to the document being finalized for the public hearing. Both the HPS Task Force and
Planning Commission continued to recommended including the MUPTE strategy in the HPS.
Additionally, in light of a recent request from Habitat for Humanity (Attachment 2), both bodies
further recommended that the HPS include the Homebuyer Opportunity Limited Tax Exemption
(HOLTE) strategy. For more, see the Homebuyer Limited Opportunity Tax Exemption (HOLTE)
section, below.
Draft Housing_Production Strategy
City staff and the consultant team have produced a Draft HPS document that outlines a range
of strategies the City plans to implement to address housing needs within the community
(Attachment 1). The Draft HPS includes information about the City's critical housing needs and
summarizes public engagement activities that informed and shaped the housing strategies
recommended for implementation. Additionally, the HPS summarizes how the strategies will
help achieve fair and equitable housing outcomes for the Lake Oswego community—especially
for low-income households, communities of color, people with disabilities, and other state and
federal protected classes. The HPS also describes how the City of Lake Oswego will monitor the
implementation and progress of the strategies recommended in the HPS.
Strategies were categorized using Near Term (1-3 years), Medium Term (within 3-5 years), and
Longer Term (>5 years) implementation time frames. Table 1, below, shows each
recommended strategy with the associated time frames, relative cost, and level of effort:
(Continued on next page)
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Table 1:Summary of Strategies and Implementation
Implementation Time
Frame
Strategy Begin Complete Cost Effort
Overall Housing Production and Supply
Near
1. Code audit and amendments Medium Term $$ • • •
Term
Remove or reduce minimum parking Near
2. Near Term $ •
requirements Term
Medium
3. Rezone land Longer Term $$ • • •
Term
Increased Housing Choices
Evaluate accessible design incentives or Medium
4. Medium Term $$ • •
mandates Term
Evaluate Multiple Unit Property Tax Medium
5. Medium Term $$ • •
Exemption Term
6. Pre-approved plan sets for ADUs Medium Medium Term $$$
Term • • •
Modify System Development Charge fee Longer • • •
7 Longer Term $$$
schedule Term
Affordable Housing for Lower-Income Households
8. Nonprofit Low-Income Housing Exemption Already Complete $ •
Near
9. Low-Income Rental Housing Tax Exemption Near Term $$ • •
Term
Public-private partnerships for affordable Near
10. housin Term Ongoing $$ • • •
g
Use Tax Increment Financing to support Near 11. affordable housing development Term Longer Term $$$$ • • •
Medium
12. Affordable housing preservation inventory Medium Term $ • •
Term
Other
Near
13. Fair Housing policy and education Medium Term $ • •
Term
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Table 2, below, outlines a proposed general implementation timeline for each strategy:
Table 2:Implementation Timeline
2024 2025 2026 2027 2028 2029 2030
1. Code audit and amendments
2.
Remove or reduce min. Parking
requirements
3. Rezone land
4.
Evaluate accessible design incentives or
mandates
5.
Evaluate Multiple Unit Property Tax
Exemption
6. Pre-approved plan sets for ADUs
7. Modify SDC fee schedule
8.
Nonprofit Low-Income Housing
11111111
Exemption
9.
Low-Income Rental Housing Tax
Exemption
10.
Public-private partnerships for affordable
housing
11. Use TIF to support affordable housing
12.
Affordable housing preservation
inventory
13. Fair Housing policy and education
All but one of the strategies included in the Draft HPS were supported by the Council, HPS Task
Force, and Planning Commission. Proposed strategy# 5— Evaluate Multiple Unit Property Tax
Exemption (MUPTE)—was supported by the Planning Commission and HPS Task Force, but not
City Council (by a vote of 3:4). Though the Council was somewhat split on the issue, a modified
version of the MUPTE strategy was included in the Draft HPS based on it receiving support from
the HPS Task Force, Planning Commission, and members of the general public.
The Draft HPS includes the following description of the MUPTE strategy (Attachment 1, p. 19-
20):
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This tax exemption can be used to encourage multi family or middle housing with
particular features or at particular price points by offering qualifying developments a
partial property tax exemption for 10 years (or longer,for housing subject to
affordability agreements). It can be offered to new development or existing housing that
is converted to meet the eligibility criteria... MUPTE is a flexible tax abatement that can
be used in various ways to encourage needed housing. The City has broad discretion as
to how to structure the program. Eligibility criteria could include requirements for
affordability, accessibility/universal design, unit size, or other desirable features... The
City must designate specific areas where the MUPTE applies, unless including
affordability as a criterion, in which case the whole city could be eligible.
City staff and the consultant team recommended including a strategy in the HPS to "evaluate"
the MUPTE program, with additional criteria that would make it available to housing with either
accessible design (see the Evaluate Accessible Design Incentives or Mandates strategy) or
moderate-income units affordable at 80-120% of Area Median Income (AMI). More specifically,
the recommendation is to further evaluate, "the various options for structuring the MUPTE
program to determine whether—and how—it should be implemented" (Attachment 1, p. 21).
This process would involve consultation with developers and housing providers to determine
their level of interest, outreach to local taxing districts, and additional conversations to
determine the desired eligibility criteria (i.e. levels of affordability and accessibility).
Homebuyer Opportunity Limited Tax Exemption (HOLTE)
The Initial Strategy Recommendations Memo includes the following description of the HOLTE
program (Attachment 3, p. 40):
The purpose of this program is to encourage homeownership among low- and moderate-
income households and to stimulate the purchase, rehabilitation, and construction of
residences in certain areas as a form of infill development... The program allows a
limited 10-year property tax exemption to owner-occupied single-unit housing that has a
market value upon completion of no more than 120%of median sales price of dwelling
units located within the city (or a lesser value adopted by the jurisdiction) ... The tax
exemption can be granted for up to 10 successive years, and only applies to the value
associated with property improvements, not the land value.
As mentioned above,jurisdictions are permitted to limit the application of the HOLTE program
to target homebuyers earning less than the specified level of 120% of city median sales prices.
From the Initial Strategy Recommendations Memo (Attachment 3, p. 40):
While not required by statute, local governments can establish income criteria for
eligible homebuyers. For example, the City of Portland limits eligible homebuyers to
those earning no more than 100%of the area median income.2
2 City of Portland, HOLTE Program. https://www.portland.gov/phb/holte/sale-requirements
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At the aforementioned joint study session on April 2, both the Council and Planning
Commission concurred with staff's initial recommendation to not include the HOLTE strategy in
the Draft HPS. As outlined in the Initial Strategy Recommendations Memo (Attachment 3), the
HOLTE program was not initially expected to have a meaningful impact on housing production
due to the land and housing costs that prevail in Lake Oswego, and staff and the consultant
team did not expect many opportunities to arise in the for-profit development market for the
purchase of homes affordable to lower-income first-time homebuyers in the city.
On May 1, 2024, the City received a letter from Habitat for Humanity that included a request to
re-consider including the HOLTE program in the HPS (Attachment 2). The letter included the
following arguments in support of implementing HOLTE in Lake Oswego:
With steep interest rates and escalating construction costs, homeownership is farther
out of reach for low- and moderate-income households and building affordable homes
for sale requires increasingly complex financing. The HOLTE program, which provides a
10-year property tax exemption on the improvements for lower-income homebuyers in
new, affordably priced homes, allows Habitat to partner with families for whom
homeownership is a truly transformational opportunity. Currently, Portland is the only
city in our program's footprint that has implemented HOLTE.
HOLTE makes homeownership work for lower-income households because a reduction in
property taxes translates into increased purchasing power. For some families who
partner with our program to buy a home, this savings is the critical difference that allows
the household to qualify for an affordable mortgage.
More specifically, Habitat for Humanity mentions that the HOLTE program could make a
meaningful impact for homeowners in their West Lake Grove development, which is currently
under construction:
... We have estimated that our homeowners in the Habitat for Humanity West Lake
Grove development in Lake Oswego will pay property taxes of$333/month for 3-
bedroom homes and$375/month for 4-bedroom homes. To set homebuyers up for
success, their total monthly payment (mortgage principal& interest, HOA fee, Proud
Ground fee, insurance, and property taxes)should be 30% of their monthly income. Every
lever that can reduce those monthly costs lowers the income threshold that families
need to meet to qualify for a mortgage.
As mentioned above, given LO's property costs, staff and the consultant team initially
concluded that the program may not be adequate to incent for-profit developers to sell homes
at reduced prices. However, staff and the consultant team would evaluate HOLTE's
effectiveness differently if the builder is a non-profit mission-driven developer focused on
affordable housing.
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This request to include the HOLTE program in the HPS was considered by the HPS Task Force at
their meeting on June 21, and by the Planning Commission at their meeting on June 24. Both
the HPS Task Force and the Planning Commission recommended including a strategy to
evaluate the implementation of HOLTE in the city's HPS, with a suggestion to include
additional income criteria that would limit the program to units made available at or below 80%
of the city median home sales price.
At their meeting on July 16, the Council will be asked to provide direction regarding whether to
include the HOLTE strategy in the HPS.
Project Schedule
A summary of the project schedule is summarized in Table 3, below.
Table 3: HPS Project Schedule
Task Milestone Date
Evaluate existing housing Housing Producer Interviews Aug—Sep 2023
strategies HPS Task Force Meeting#4 Oct 6, 2023
[Aug— Nov 2023] Council Study Session #4 Nov 7
Planning Commission (PC) Work Session #4 Nov 13
Outline housing strategy Draft Housing Strategy Alternatives Memo Nov 2023
alternatives HPS Task Force Meeting#5 Dec 8
[Nov 2023 —Jan 2024] PC Update Jan 8, 2024
Refine housing strategy HPS Task Force Meeting#6 Feb 16
recommendations HPS Task Force Meeting#7 Mar 1
[Feb—Apr 2024] Community Forum/Public Workshop Mar 14
CC-PC Joint Work Session Apr 2
Draft HPS Report Initial Draft HPS Report May 27
[May—Jul 2024] HPS Task Force Meeting#8 Jun 21
PC Work Session Jun 24
Council Study Session Jul 16
Finalize HPS for adoption Final HPS Report Aug 2
[Aug— Nov 2024] PC Public Hearing Sep 9
Council Public Hearing Oct 15/ Nov 5
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RECOMMENDATION
Direct staff to include the MUPTE and HOLTE strategies in the City's HPS Report.
ATTACHMENTS
This staff memo and all attachments referenced below can be found by visiting the Planning
Project webpage for the case file. Due to file size, attachments are available in the "Public
Records Folder" using this link:
https://www.ci.oswego.or.us/planning/pp-22-0005-housing-needs-and-production-strategies.
1. City of Lake Oswego Draft Housing Production Strategy, 06/14/2024
2. Letter from Habitat for Humanity, 05/01/2024
3. Initial Strategy Recommendations Memo, 02/08/2024
Documents from previous meetings are also available in the public records file using the link
provided above.
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ATTACHMENT 1
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PP 22-0005 - '' ATTACHMENT 1/PAGE 1 OF 103 � , � `
ACKNOWLEDGMENTS
CITY COUNCIL HOUSING PRODUCTION STRATEGY TASK FORCE
Mayor Joseph M. Buck Mayor Joseph M. Buck, City Council Liaison (non-voting)
Ali Afghan Philip Stewart, Planning Commission Liaison (non-voting)
Trudy Corrigan Douglas Corder, 50+Advisory Board Representative
Massene Mboup Kasey Adler,Transportation Advisory Board
Aaron Rapf Representative
Rachel Verdick Bruce Poinsette, Development Review Commission
Representative (builder)
John Wendland
At-large Members:
Sarah Walker(affordable housing developer)
PLANNING COMMISSION
David Tangvald (real estate broker)
Diana Moreno
Phil Bertrand (real estate broker)
Don Mitchell
Kyrsten Baumgart (resident)
Rachel Naujock
Yoko Kinoshita (resident)
Miles Rigby
Logan Bryck(resident)
Dave Schenone
Cara Kao-Young (resident)
Philip Stewart
Rebecca Lane (resident)
James Thwing
John E. Pauley(resident)
Rosalie Nowalk(resident)
CITY STAFF
Pat Ginn (resident)
Erik Olson, Long Range Planning Manager
Diana Howell (resident)
Jessica Numanoglu, Community
Development Director John Turchi (resident)
PROJECT TEAM
Matt Hastie, MIG
Kate Rogers, MIG
Andrew Parish, MIG
Katie Vickers, MIG
Brendan Buckley,Johnson Economics
PP 22-0005 ATTACHMENT 1/PAGE 2 OF 103 ego Housing Production Strategy
TABLE OF CONTENTS
EXECUTIVE SUMMARY 1
PROJECT OVERVIEW 3
Project Purpose and Background 3
Lake Oswego's Housing Needs 4
Engagement Summary 5
STRATEGIES AND ACTIONS 7
1. Code audit and amendments 11
2. Remove or reduce minimum parking requirements 13
3. Rezone land 14
4. Evaluate accessible design incentives or mandates 16
5. Multiple Unit Property Tax Exemption (MUPTE) 19
6. Pre-approved plan sets for ADUs 21
7. Modify System Development Charge (SDC) fee schedule 23
8. Nonprofit Low-Income Housing Tax Exemption 25
9. Low-Income Rental Housing Tax Exemption 27
10. Public-private partnerships for affordable housing 28
11. Use Tax Increment Financing (TIF) to support affordable housing development 30
12. Affordable housing preservation inventory 32
13. Fair Housing policy and education 33
ACHIEVING FAIR AND EQUITABLE HOUSING OUTCOMES 35
MONITORING PROGRESS AND OUTCOMES 39
LIST OF APPENDICES 41
APPENDICE;
A. Contextualized Housing Needs Assessment
B. Engagement Summary
C. Pre-HPS Survey Results
PP 22-0005 ATTACHMENT 1/PAGE 3 OF 103 ego Housing Production Strategy
XECIVE SUMMARY
I
OVERVIEW
Oregon Statewide Planning Goal 10 requires cities to plan for the housing needs of all community members.As a
city within the Portland Metro area, Lake Oswego must complete a Housing Needs Analysis (HNA) every six
years as well as a Housing Production Strategy (HPS)to implement specific actions that address the identified
needs.
Lake Oswego's Housing Production Strategy outlines a range of strategies the City plans to implement to address
housing needs within the community.The HPS prioritizes current and future housing needs identified in the HNA
and outlines actionable policies, actions, and implementation steps to encourage the production of housing.
These include things like changes to how the City zones land and regulates development of housing,financial
incentives, funding sources, partnerships, and other tools and policies.
This HPS Report includes information about the City's critical housing needs and summarizes public engagement
activities that informed and shaped the housing strategies recommended for implementation.The document
also summarizes how the HPS will help achieve fair and equitable housing outcomes for the Lake Oswego
community—especially for low-income households, communities of color, people with disabilities, and other
state and federal protected classes. Lastly,this document describes how the City of Lake Oswego will monitor
the implementation and progress of the strategies recommended in the HPS.
RECOMMENDED STRATEGIES AND ACTIONS
On the next page is a summary of the strategies and actions recommended as part of Lake Oswego's HPS.The
strategies are organized by the primary housing need that they address. However, some strategies address
housing needs across multiple categories.
PP 22-0005 ATTACHMENT 1/PAGE 4 OF 103 d Housing Production Strategy I 1
OVERALL HOUSING Increase housing production to meet the City's overall long-term
PRODUCTION AND SUPPLY housing need.
Enable and encourage production of housing that can meet a full
INCREASED HOUSING range of household needs and preferences.This includes a wider
CHOICES variety of housing types and sizes, and housing to meet particular
needs such as aging in place and accessibility.
AFFORDABLE HOUSING
FOR LOWER-INCOME Facilitate development of government-subsidized housing that
meets the needs of low-and moderate-income households.
HOUSEHOLDS
The strategy in this category(Fair Housing policy and education)
OTHER does not easily fit under the other headings, but supports equitable
implementation of all recommended housing strategies.
More details about the implementation time frames and cost/effort estimates in the table below are provided in
the Strategies and Actions section of this report.
Implementation Time Frame
Strategy Begin Complete Cost Effort
Overall Housing Production and Supply
1. Code audit and amendments Near Term Medium Term $$ • • •
2. Remove or reduce minimum parking requirements Near Term Near Term $ •
3. Rezone land Medium Term Longer Term $$ • • •
Increased Housing Choices
4. Evaluate accessible design incentives or mandates Medium Term Medium Term $$ • •
5. Evaluate Multiple Unit Property Tax Exemption Medium Term Medium Term $$ • •
6. Pre-approved plan sets for ADUs Medium Term Medium Term $$$$ • • •
7. Modify System Development Charge fee schedule Longer Term Longer Term $$$$ • • •
Affordable Housing for Lower-Income Households
8. Nonprofit Low-Income Housing Exemption Already Complete $'t$ •
9. Low-Income Rental Housing Tax Exemption Near Term Near Term $$ • •
10. Public-private partnerships for affordable housing Near Term Ongoing $$ • • •
Use Tax Increment Financing to support
11. affordable housing development Near Term Longer Term $$$$ • • •
12. Affordable housing preservation inventory Medium Term Medium Term $ • •
Other
13. Fair Housing policy and education Near Term Medium Term $ • •
ATTACHMENT 1/PAGE 5 OF 103 ego Housing Production Strategy
PRO CT OVERVIEW
PROJECT PURPOSE AND BACKGROUND
Oregon Statewide Planning Goal 10 requires cities to plan for the housing needs of all community members.As a
city within the Portland Metro area, Lake Oswego must complete a Housing Needs Analysis (HNA) every six
years as well as a Housing Production Strategy (HPS)to implement specific actions that address the identified
needs.
The Lake Oswego City Council adopted an updated HNA in October 2023.The HNA looks at the community's 20-
year housing needs and whether there is enough residential land in the city to meet those needs.
The Housing Production Strategy outlines a range of strategies the City of Lake Oswego plans to implement to
address housing needs within the community.The HPS prioritizes current and future housing needs identified in
the HNA and outlines actionable policies, actions, and implementation steps to encourage the production of
housing.These include things like changes to how the City zones land and regulates development of housing,
financial incentives,funding sources,
partnerships, and other tools and
policies.
The HPS process focuses on strategies
related to the production of new
housing, recognizing the significant
shortfall of housing produced in Oregon f .., � s '`' } ��
during the last two decades. However, it
also will be important for the City to 1111` t
work with its community partners to ��a x=
help conserve maintain and ::
rehabilitate existing housing in Lake I.
Oswego, particularly where such • s „r
housing also is affordable to people with
low and moderate incomes.
PP 22-0005 ATTACHMENT 1/PAGE 6 OF 103 J Housing Production Strategy 13
LAKE OSWEGO'S HOUSING NEEDS
The project team used the findings from the HNA, as well as additional information from the Census, other data
sources, and from stakeholders involved in housing production in the city, to put Lake Oswego's housing needs
into context with current demographic and development trends. Below are some key findings from the HNA and
Contextualized Housing Needs Assessment (Appendix A).
Current Needs
• While Lake Oswego is generally considered an affluent community, not all
households are wealthy. Over 40%of households in the city earn less than
$100k and nearly 20%of households earn less than $50k per year.
0
• Homeownership costs have increased significantly in Lake Oswego,
consistent with national trends.The median home sale price in Lake Oswego
has more than doubled over the past 10 years,from $395k in 2012 to $860k Nearly 20%of
in 2022. households earn less
# • than $50k per year
Vtit * . • There is very little existing housing available to
**TN tt z .111•t tit t t those in lower income segments.Around 2/3 of existing housing units (both rental
?r• and ownership units) are unaffordable to those earning less than $100k per year,
jl l! 11�.TMM, and over 90%of existing units are unaffordable to those earning less than $50k per
*t of �Irro 0 year.
Nearly half of renters are • Nearly half of renter households in Lake Oswego are considered housing cost
cost burdened burdened, meaning they pay more than 30%of their income for housing.
Future Needs
• Lake Oswego will need nearly 2,000 new housing units by 2043 to meet
projected demand. Housing will need to be produced across the income
spectrum to meet these needs.
• A wide range of housing types are needed to meet the range of household
sizes and incomes.The majority of new needed homes (61%) are projected
to be attached housing—this includes 27%as middle housing units 2,000 new housing
(townhomes and "plexes"with two to four units) and 34%as multi-family units needed
housing (e.g., apartments).
•More than 1/3 of new housing units over the next 20 years will be needed by
"low-income" households—those earning at or below 80%of the median family
income (MFI)for Clackamas County.
•The private market will not deliver housing that is needed by low-income
households on its own. Housing that is affordable to those earning below 80%
27% of new needed units MFI typically requires government subsidy and partnerships with affordable
are middle housing housing providers.
PP 22-0005 ATTACHMENT 1/PAGE 7 OF 103 d Housing Production Strategy 14
• There is a shortage of buildable residential land across all zone types
(low-to high-density)to meet the 20-year housing need in Lake Oswego Shortage of
(a deficit of 86 total acres). /�� residential
land
Key Housing Gaps
The following housing types have been identified by stakeholders involved in
local housing production as key gaps in Lake Oswego's housing market.The HPS will work toward meeting these
housing needs and filling these gaps.
• Affordable housing for low-and moderate-income households.
• Greater housing choices within neighborhoods, including middle housing (e.g., townhomes, duplexes,
cottage clusters).
• Opportunities for aging in place—More than 20%of the population is over 65.
• Options for more attainable homeownership (e.g., condos and middle housing).
• Apartments with family-size units (2-3 bedrooms)—Nearly 1/3 of current households in the city have
children.
• Multi-family housing outside the Town Center.
ENGAGEMENT SUMMARY
The City of Lake Oswego is committed to reaching a broad range of community members to consider all
perspectives related to housing within the city.The City values openness and transparency, recognizing that
successful public engagement leads to better local decisions and outcomes.
The public engagement for the Lake Oswego HPS allowed community members, stakeholders, and interested
parties to share their perspectives and input.This project was developed through a collaborative process among
the community, City staff and decisionmakers, stakeholders, and consultants to ensure that multiple points of
view were considered and understood. Below is a summary of engagement activities and outcomes for the HPS.
More detail is provided in Appendix B.
Public engagement was split into three phases:
Phase 1: HNA Phase 2: HPS Phase 3: HPS
(Dec 2022 Oct Development
(Oct 2023 -Jul Adoption
2023) 2024) (Aug- Nov 2024)
PP 22-0005 ATTACHMENT 1/PAGE 8 OF 103 d Housing Production Strategy 15
OUTREACH METHODS INCLUDED:
Housing Production Strategy Task Force.This advisory group included a variety of housing
��- stakeholders, producers, and consumers.This included realtors, housing development
1-1 industry members, homeowners, renters, and representatives of the City's Planning
Commission, City Council, 50+Advisory Board, and Transportation Advisory Board, among
others.
The Task Force was instrumental in shaping the City's approach to the HPS and the
strategies ultimately selected.They reviewed materials created by the project team at
each step of the process and provided important information and feedback.This was
especially beneficial in informing decisions by the Planning Commission and City Council.
O O Stakeholder Interviews.The project team interviewed stakeholders involved in various
IJJ aspects of housing production, including affordable housing producers as well as
developers or designers of market-rate multifamily, middle housing, and single-family
housing.
The feedback received from housing stakeholders influenced the strategies included in the
HPS. For example,the code topics addressed in the Code Audit and Amendments strategy
were refined to address the barriers identified by housing developers and producers.Also,
incentives and other strategies that support affordable housing development (tax
abatements,TIF funding, partnerships) were shaped by these interviews.
o Virtual Forums and Surveys.The City hosted two virtual community forums-on April 6,
— 0 2023 to discuss housing needs as part of the HNA, and on March 14, 2024 to review the
r-i strategies being considered for the HPS.The HPS forum used live polling to get feedback in
I I real-time to supplement the discussion.The City also hosted two online surveys/online
open houses that corresponded with the virtual forums.
The HPS community forum and online survey were used to gauge community support for
various strategies under consideration for the HPS.
7_\1.i Presentations to Boards and Commissions. City staff presented to the following groups:
Diversity, Equity and Inclusion Advisory Board; 50+Advisory Board; November 2023
Mayor's Roundtable event; and Fall 2023 Kruse Way Economic Forum
O O O City Council and Planning Commission meetings.The project team held work sessions
-5 with the City Council and Planning Commission at key points in the project.Adoption
hearings with both bodies were held in fall 2024.
Planning Commission and City Council provided important direction to the project team at
key points in the HPS development. Work sessions with both bodies were used to review,
refine, and prioritize specific strategies included in the HPS. Ultimately,the Planning
Commission and City Council provided direction on which strategies to include in the draft
HPS and approved the final HPS via adoption hearings.
PP 22-0005 ATTACHMENT 1/PAGE 9 OF 103
TRAtEGIES AND ACTIONS
The Housing Production Strategy identifies strategies and actions that the City of Lake Oswego and community
partners can take to promote housing development that meets the needs of the community. All strategies
recommended in this report were supported by the HPS Task Force, City Council, and Planning Commission.
The strategies are organized by the primary housing need that they address. However, some strategies address
housing needs across multiple categories.
OVERALL HOUSING Increase housing production to meet the City's overall long-term
PRODUCTION AND SUPPLY housing need.
Enable and encourage production of housing that can meet a full
INCREASED HOUSING range of household needs and preferences.This includes a wider
CHOICES variety of housing types and sizes, and housing to meet particular
needs such as aging in place and accessibility.
AFFORDABLE HOUSING
FOR LOWER-INCOME Facilitate development of government-subsidized housing that
meets the needs of low-and moderate-income households.
HOUSEHOLDS
The strategy in this category(Fair Housing policy and education)
OTHER does not easily fit under the other headings, but supports
equitable implementation of all recommended housing strategies.
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PP 22-0005 ATTACHMENT 1/PAGE 10 OF 103, Housing Production Strategy 17
The HPS report summarizes key information for each of the recommended strategies and identifies steps
needed for implementation.The summary of each housing strategy includes the following information:
Description What is the strategy? How can the strategy work to address identified housing needs in
Lake Oswego?What are potential outcomes?
Considerations What potential options,funding needs, challenges, etc. are applicable to the strategy?
Are there potential trade-offs or negative externalities to consider? How feasible is this
strategy, given other considerations?
Recommendation Identifies specific actions recommended for implementation. (Not applicable to all
strategies).
Anticipated What is the anticipated impact of the strategy?The following types of impacts are
Impact considered:
• Housing need addressed—Housing need identified in the HNA that is addressed by
the strategy
• Populations served by the strategy
• Income levels addressed by the strategy
• Benefits and burdens that "priority populations" may receive from the strategy.
"Priority populations" include low-income households, people of color, people with
disabilities, seniors, and other state or federal protected classes.
• Housing tenure(either owner or renter)
• Magnitude of the action for producing new housing:
Low impact=The strategy is unlikely to meet the relevant housing need. A low
impact strategy does not mean an action is unimportant. Some actions are
necessary or beneficial, but not sufficient on their own to produce new housing.
Moderate impact=The strategy either may have a moderate impact on meeting
the relevant housing need or be designed to target that need.
High impact=The strategy may directly benefit a certain housing need and is
likely to be most effective at meeting that need relative to other strategies.
Time Frame Implementation:When does the City expect to begin implementation, and when will the
action to be adopted and implemented? Strategies are identified as Near Term (1-3
years), Medium Term (within 3-5 years), and Longer Term (>5 years) actions.
Impact:Over what time period will the impact occur?
Implementation What actions will the City and other stakeholders need to take to implement the
Actions strategy?
Lead & Partners Who will be responsible for implementing the strategy?What partnerships might be
necessary or beneficial to the strategy?
PP 22-0005 ATTACHMENT 1/PAGE 11 OF 103
SUMMARY OF STRATEGIES AND IMPLEMENTATION
Strategies are identified as Near Term (1-3 years), Key
Medium Term (within 3-5 years), and Longer Term Cost Effort
(>5 years) implementation time frames. A matrix $ Minimal Investment • O 0 Minimal Effort
shows each strategy with the time frames, relative $$ Moderate Investment • • 0 Moderate Effort
cost, and level of effort. $$$ Significant Investment • • • Significant Effort
$$$$ Major Investment
A general implementation timeline follows on the
next page.
Implementation Time Frame
Strategy Begin Complete Cost Effort
Overall Housing Production and Supply
1. Code audit and amendments Near Term Medium Term $$ • • •
2. Remove or reduce minimum parking requirements Near Term Near Term $ •
3. Rezone land Medium Term Longer Term $$ • • •
Increased Housing Choices
4. Evaluate accessible design incentives or mandates Medium Term Medium Term $$` • •
5. Evaluate Multiple Unit Property Tax Exemption Medium Term Medium Term $$$$ • •
6. Pre-approved plan sets for ADUs Medium Term Medium Term $$$$ • • •
7. Modify System Development Charge fee schedule Longer Term Longer Term $$$$ • • •
Affordable Housing for Lower-Income Households .
8. Nonprofit Low-Income Housing Exemption Already Complete $SSS •
9. Low-Income Rental Housing Tax Exemption Near Term Near Term $$ • •
10. Public-private partnerships for affordable housing Near Term Ongoing $$ • • •
Use Tax Increment Financing to support • • •
11. affordable housing development Near Term Longer Term $$$$
12. Affordable housing preservation inventory Medium Term Medium Term $ • •
Other
13. Fair Housing policy and education Near Term Medium Term $ • •
PP 22-0005 ATTACHMENT 1/PAGE 12 OF 103, Housing Production Strategy 19
IMPLEMENTATION TIMELINE
2024 2025 2026 2027 2028 2029 2030
1. Code audit and amendments
2. Remove or reduce min. Parking requirements
3. Rezone land
4. Evaluate accessible design incentives or mandates
5. Evaluate Multiple Unit Property Tax Exemption
6. Pre-approved plan sets for ADUs
7. Modify SDC fee schedule*
8. Nonprofit Low-Income Housing Exemption I
9. Low-Income Rental Housing Tax Exemption
10. Public-private partnerships for affordable housing
11. Use TIF to support affordable housing
12. Affordable housing preservation inventory
13. Fair Housing policy and education
*Note: The SDC strategy is split into two time frames (2025 and 2029-2030) to reflect the near-term action of
updating SDC rates for cottage clusters and the longer-term action of updating the City's SDC methodology
more broadly. See the discussion on page 23 for details.
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PP 22-0005 ATTACHMENT 1/PAGE 13 OF 103 Housing Production Strategy 110
STRATEGIES TO BOOST OVERALL HOUSING PRODUCTION AND SUPPLY
The following strategies are intended to increase housing production in Lake Oswego.The HNA indicates that
nearly 2,000 new housing units will be needed by 2043.This includes approximately 950 units for higher-income
households and over 1,000 units for middle-and lower-income households. Increasing housing production will
not only help meet these needs, it can also slow increasing housing costs by helping balance housing supply and
demand.
1. Code audit and amendments
Description Undertake a comprehensive audit of the Community Development Code (CDC)to
identify barriers to housing production and implement code amendments to address
those barriers.
The CDC audit and amendments are recommended to address:
• Barriers to accessory dwelling units (ADUs) and middle housing;
• Ways to facilitate smaller units;
• Procedural requirements that add cost and delay to land use approvals;
• Open space requirements in high-density zones;
• Barriers to residential development within mixed-use districts;
• The impact of neighborhood overlays or other regulatory provisions; and
• Other identified Code barriers.
The CDC amendments could also incorporate recent changes to state law related to
affordable housing and lower-cost housing choices.These statutory provisions apply
whether or not the City adopts them locally, but amending the Code could facilitate
easier interpretation by staff and applicants. Recent changes to Oregon Revised Statutes
(ORS) include:
• ORS 197A.445(2) (Senate Bill 8, 2021): Allows affordable housing with density
and height bonuses.
• ORS 197A.445(3) (House Bill 2984, 2023): Allows conversion of commercial
buildings into housing.
• ORS 197A.430 (House Bill 3395, Sections 16-19, 2023): Allows single room
occupancies in all residential zones.
Considerations • This strategy could help reduce or eliminate some of the major code and procedural
barriers identified by housing stakeholders.
• The strategy could be shaped to prioritize housing types identified as most needed in
the city, based on the City's recently adopted HNA and stakeholder input, such as:
o Middle housing (e.g.,townhomes, duplexes, and cottage clusters)
o Apartments with family-size units (2-3 bedrooms)
o Multi-family housing (of any size)
o Smaller homes
PP 22-0005 ATTACHMENT 1/PAGE 14 OF 103
• Simply removing code barriers will not lead to housing development.This strategy
should be paired with others that directly influence housing production.
• There may be neighborhood resistance to this strategy, particularly for any code
amendments intended to modify existing neighborhood overlays or neighborhood
planning efforts. Extensive community engagement would be necessary.
Anticipated • Housing need addressed:General need for increased housing production and
Impact increased housing choices.This strategy could also specifically address the needs for
multi-family housing, middle housing, and smaller units such as ADUs.
• Population served: Low to higher-income households
• Income level:All income levels
• Benefits and Burdens:This strategy is broad, and therefore difficult to evaluate in
terms of benefits and burdens for priority populations. However, it does give the
opportunity to target efforts in beneficial areas such as reducing barriers to
affordable development or housing that is more attainable to low-and moderate-
income households (e.g., multi-family and middle housing); facilitating smaller
housing options such as ADUs, which could benefit seniors; and other areas aimed at
helping priority populations. In addition, increasing overall housing supply can help
keep housing costs down by balancing supply and demand, which benefits all
residents, including priority populations.
However, because the strategy is intended to increase housing production overall, it
has the potential to primarily benefit upper income households. Implementation
should include a focus on meeting the needs of housing types that benefit low-and
moderate-income households, seniors, and other priority populations.
• Housing tenure: For rent or sale
• Magnitude: Moderate—This strategy could have a moderate impact on new housing
production given the limited remaining inventory of buildable residential lands.The
low inventory and relatively high land prices in Lake Oswego incentivize making more
intensive use of remaining sites, if the code permits it.
Time Frame Implementation: Begin in Near Term; Complete in Medium Term.
Impact:The action can begin to have impact after it is implemented in the CDC.
However,the impact on housing development is expected to be longer-term.
Implementation • Identify priorities for the code audit,focusing on high-priority housing needs.
Actions • Potentially seek a technical assistance grant from DLCD or other sources to support a
code audit project.
• Conduct a comprehensive CDC audit, potentially with support from a consultant.
• Work with developers/housing stakeholders and residents to vet potential CDC
amendments.
• Work with Lake Oswego's Planning Commission and City Council to adopt code
amendments.
• City Council Action: Legislative CDC text amendments.
PP 22-0005 ATTACHMENT 1/PAGE 15 OF 103
Lead & Partners Lead: Lake Oswego Community Development
Partners: Developer and housing stakeholders
2. Remove or reduce minimum parking requirements
Description As required by the State of Oregon's Climate-Friendly and Equitable
Communities (CFEC) program, the City is currently undertaking Citywide Parking
Reform efforts to develop regulations that comply with the CFEC rules.This
includes requirements to remove parking mandates in certain areas (near
transit, Downtown, and in the Lake Grove Village Center).The City is also
required to take additional steps to reduce parking requirements. For example,
the City could consider removing parking mandates citywide as a part of this
work.
While the CFEC-related parking reform efforts were not initiated as part of the
HPS, reducing parking mandates benefits housing production in several ways. It
provides the opportunity to reduce the amount of lot area used for pavement
and storage of vehicles and provides more space for housing and open space. It
also offers greater flexibility to site housing and reduces costs associated with
providing parking.The City is choosing to recognize the value of this work in
facilitating housing development by including in the HPS.
More information about the Citywide Parking Reform project is available here:
www.ci.oswego.or.us/planning/pp-22-0001-citywide-parking-reform.
Considerations • Parking mandates are often cited as a major barrier for market-rate multi-
dwelling and regulated affordable housing.
• Developers often choose to provide parking, even if not required.
Lenders/investors may require some parking to ensure marketability of
units.
• There could be community opposition to removing all parking mandates, due
to the potential for higher usage of on-street parking and the potential for
parking overflow from commercial areas to residential neighborhoods.
Anticipated • Housing Need Addressed: General need for increased housing production.
Impact This strategy would especially benefit production of multi-family and
government-subsidized affordable housing.
• Population served: Especially beneficial to low-to moderate- income
households
• Income level:All income levels—especially 30-120%AMI
• Benefits and Burdens:This strategy has the potential to benefit low-income
households and people of color by removing parking mandates as a barrier
to development of affordable housing.
Access to convenient parking has been raised as an important need for
people with disabilities; therefore, removing parking mandates could
potentially burden those populations if parking is not provided.The City
could consider encouraging property owners to provide parking for people
PP 22-0005 ATTACHMENT 1/PAGE 16 OF 103 Housing Production Strategy 113
with disabilities and set policy on when on-street parking designated for
people with disabilities is appropriate. On the other hand, some people with
disabilities are unable to drive and could benefit from removing additional
costs associated with parking.
• Housing tenure: For rent or sale
• Magnitude: High—This action is likely to have the most impact on market-
rate multi-family and regulated affordable housing. Parking mandates are
often cited as a major barrier for those types of development. Reduced
parking often allows for greater density(i.e., additional housing) on a site,
improving the financial feasibility via replacing the sunk cost of building and
maintaining the parking area, with additional revenue-generating space.
Reduced parking also allows developers to be more creative with site
planning and design features in general, often improving the aesthetics and
functionality of a property as well.
Time Frame Implementation: Begin and Complete in Near Term
Impact:The action will begin to have impact as soon as the parking mandates
are removed. Impacts to housing production are expected to be longer term.
Implementation • Conduct outreach and education related to parking mandates.
Actions • Work with Lake Oswego's Planning Commission and City Council to adopt
code amendments.
• City Council Action:Adopt Development Code text amendments.
Lead & Partners Lead: Lake Oswego Community Development
Partners: N/A
3. Rezone land
Description This strategy involves rezoning commercial, mixed-use, or other non-residentially
zoned properties for residential uses, especially multi-family housing. It could also
involve updating zoning districts to allow housing where not currently allowed or
rezoning lower-density areas to allow higher-density housing.
The HNA identified a need for additional residential land across all zone types to meet
the 20-year housing need in Lake Oswego (a deficit of 86 total acres). As such, there
may be a need to add to the city's capacity of residential land to meet the housing
need. Rezoning is one way to help address this issue.
Recommendation Prioritize rezoning in areas with the greatest potential for higher density multifamily
housing—including areas where nonresidential uses are underutilized. Potential zoning
districts to consider for this strategy include the Mixed Commerce District(MC) and
Industrial District (I).
Considerations • If nonresidential land is considered for rezoning, it would be important to ensure
there is still adequate land available for employment and commercial/industrial
PP 22-0005 ATTACHMENT 1/PAGE 17 OF 103
needs in the city. Lake Oswego's Economic Opportunities Assessment identifies the
city's future employment land needs.
• In considering the most appropriate locations for City-initiated rezoning of land,
the following criteria or factors should be considered:
o Proximity to existing residential and higher-density areas.
o Proximity to services (e.g.,transit, schools, parks, etc.).
o Size and ownership—larger properties will be more attractive for
development.
• There may be neighborhood resistance to rezoning, especially"upzoning" single-
family residential areas.This strategy would need significant community
engagement.
Anticipated • Housing need addressed: Rezoning would address the shortage of land for
Impact housing, and the overall need for housing production in the city. Depending on
how it is implemented, this strategy could also address the shortage of higher-
density land by rezoning lower-density land.
• Population served: Low to higher income households
• Income level:All income levels
• Benefits and Burdens: Rezoning can increase the availability of land zoned for
residential development. Additional capacity for more housing development can
include opportunities for multi-family housing that is generally more affordable to
low-and moderate-income households.
A potential burden from this strategy is the possibility of lower-income households
being displaced if rezoning leads to increased development pressures or increased
property values. Rezoning commercial areas, or impacts of increased property
values, can also lead to commercial displacement of small businesses. Rising
commercial rents or pressures to redevelop for residential uses may have a larger
impact on small-scale entrepreneurs and immigrant or minority-owned businesses.
The characteristics of areas being considered for rezoning should be carefully
considered as part of implementation to avoid displacement impacts.
• Housing tenure: For rent or sale
• Magnitude: Moderate to High—The impact of rezoning might be relatively high
given the limited supply and high demand for buildable residential land in the
community.The effectiveness of rezoning will depend on the physical and
infrastructure characteristics of the rezoned land for residential use.The density of
housing under the new zone will also depend on the physical constraints (e.g.,
steep slopes)that might limit the buildable portion of a site.
Time Frame Implementation: Begin in Medium Term; Complete in Longer Term
Impact: Land inside city limits will become available for development immediately
after rezoning. Land outside city limits can also be developed, but will need to
overcome the additional hurdle of annexation.The impact on housing development is
expected to be long-term.
Implementation • Use the criteria listed above to identify potential areas for rezoning. Prioritize sites
Actions with the best potential for housing production and access to services.
PP 22-0005 ATTACHMENT 1/PAGE 18 OF 103
• Consider the demographic characteristics of potential rezoning areas to avoid
potential displacement impacts.
• Engage with property owners as well as the broader community in targeted areas.
• Work with Lake Oswego's Planning Commission and City Council to adopt Zoning
and Comprehensive Plan Map amendments.
• City Council action: Legislative Zoning and Comprehensive Plan Map amendments
and CDC and Comprehensive Plan text amendments.
Lead & Partners Lead: Lake Oswego Community Development
Partners: Property owners
STRATEGIES TO INCREASE HOUSING CHOICES
The following strategies are intended to meet a full range of household needs and preferences.This includes a
wider variety of housing types and sizes, and housing to meet particular needs such as aging place and
accessibility.
4. Evaluate accessible design incentives or mandates
Description This strategy involves evaluating incentives or mandates to increase
development of housing that is accessible for seniors and people with disabilities
or mobility challenges.
Potential incentives could include:
• Bonuses for height, density, lot size, or floor area ratio.
• Tax abatements, e.g., MUPTE (see Strategy 5).
Potential mandates could include:
• Requiring visitability in single-family and middle housing development—
this would ensure that anyone using a wheelchair can visit the subject
homes.Visitability is most relevant for buildings with fewer than four units,
townhouses, and detached homes that aren't subject to ADA requirements.
• Requiring housing that receives public funding to provide more accessible
units or more universal design features than required under federal
standards.This could mean applying the standards to a higher percentage of
units than would otherwise be required (above 5%) and/or requiring units to
meet higher Universal Design or Lifelong Housing Certification standards.
• Requiring elevators in some or all multi-story buildings. Currently,the
Building Code only requires elevators to reach common spaces (such as
exercise rooms) or units that are federally required to be accessible.
Requiring elevators in one or more multi-family buildings would provide
access to all levels of that building. It would also make all units "covered"
units under the Fair Housing Act, meaning all units would need to have
baseline accessibility features.
PP 22-0005 ATTACHMENT 1/PAGE 19 OF 103 Housing Production Strategy 116
Accessibility Standards:
A small number of units in multifamily buildings are already required to have
accessibility features under federal law and Oregon's state building code.This
strategy would go beyond those minimums by either requiring or incentivizing
additional units that provide accessibility features, or targeting housing not
subject to these requirements (e.g., single-family homes and middle housing).'
Potential accessibility standards include:
• Building Code Standards. Oregon's building code provides specifications for
"Accessible Units" (with features such as wider than Type B doorways and
fully accessible bathroom and kitchen facilities), "Type A units" (less
accessible than "Accessible Units" and adaptable for additional accessibility),
and "Type B" units (fewer accessibility features than Type A). Relying on
these existing statewide code standards would be a relatively
straightforward approach.
• Universal Design is a building concept that incorporates design layouts and
characteristics into residences to make them usable by the greatest number
of people and respond to the changing needs of the resident. Universal
Design incorporates standards for features such as hallways, doorways,
bathrooms, and kitchens that make these features usable for people with
disabilities or adaptable for that purpose.'
• Visitability is a design approach for new housing that allows anyone who
uses a wheelchair or other mobility device to visit the home. A visitable
home typically includes:
o A zero-step entrance;
o Wide interior doors; and
o A half bathroom on the main floor.
Considerations • This strategy would help address housing disparities for people with
disabilities and provide more options for aging in place.
• Strategies to promote accessible housing received support from the Middle
Housing Code Advisory Committee as part of the House Bill 2001 code
updates.
• Accessibility features can add to the cost of construction for a development,
which can make affordable housing projects less financially feasible.
Elevators, in particular, add significant cost to a project.
• While mandates may provide more accessible units,they could prevent
some affordable housing projects from being developed.
1 Multi-family developments are subject to the Fair Housing Act; for buildings with an elevator, all units must be
Type B units, per the building code; for those without an elevator, all ground floor units must be Type B.At least
2% but not less than one dwelling unit in a multi-family site with more than 20 units must be Type A units.
Housing projects receiving public funding are subject to federal laws (Section 504 of the Rehabilitation Act of
1973 and/or Title II of the ADA), which require 5%of units to be mobility-accessible. Sources: Portland Code
Guide, Accessible Design. https://www.portlandoregon.gov/bds/article/514247; Disability Law Handbook,
Southwest ADA Center. http://www.southwestada.org/html/publications/dlh/housing.html.
2 Universal Design Standards, West Virginia Housing Development Fund. https://tinyurl.com/yx63h792
PP 22-0005 ATTACHMENT 1/PAGE 20 OF 103 Housing Production Strategy 1 17
• Incentives must be calibrated effectively to be attractive to both a nonprofit
and for-profit developer.The benefit of using the incentive should outweigh
the costs associated with implementing accessible design features.
• A more general strategy to utilize zoning bonuses was not recommended for
inclusion in the HPS due to concerns expressed during project outreach that
additional floor area, height, or lot coverage could conflict with existing
neighborhood character. Zoning bonuses to incent accessible units may be
met with similar opposition.
Anticipated • Housing Need Addressed: Housing for people with physical disabilities and
Impact mobility challenges.The HNA indicates that an estimated 8%of the
population of Lake Oswego, or 3,140 people, report having some form of
disability, including 2.9%with an ambulatory disability. However,the
number of people that would benefit from physical accessibility in housing—
especially amongst the senior population—likely exceeds these numbers.
Also, housing stakeholders identified this as a notable gap in the local
housing market.
• Population served:Seniors; people with disabilities
• Income level:All income levels
• Benefits and Burdens:This strategy is anticipated to benefit seniors and
people with disabilities by increasing the stock of accessible housing units in
the city. However, a potential trade-off of mandating accessibility features—
especially for subsidized housing—is that it would reduce the total number
of units that could be provided in a building(because bathrooms and other
areas would need to be larger). While this may provide more accessible
units, it could make some affordable housing projects less feasible.This
could be a potential burden on low-income households by limiting the
opportunity for production of housing they can afford. Incentive-based
strategies would not carry the same burden.This will be an important
consideration for implementation.
• Housing tenure: For rent or sale
• Magnitude: Moderate—Depending on how the strategy is structured, it
could lead to production of a significant number of new units with
accessibility features. However,the strategy could also have the effect of
deterring housing production if requirements are too onerous. To improve
feasibility, requirements may be applied to some but not all of the units in
new multi-family development. New elevator requirements may significantly
deter new development, due to high cost.
Time Frame Implementation: Begin and Complete in Medium Term
Impact:The action can begin to have impact after it is implemented in the CDC
or adopted as a financial incentive.The impact on housing production is
expected to be longer-term.
Implementation • Potentially seek a technical assistance grant from AARP or other sources to
Actions support implementation efforts.
• Code bonus.
PP 22-0005 ATTACHMENT 1/PAGE 21 OF 103
o Evaluate a potential new height/FAR bonus with input from housing
stakeholders and community members to determine whether—and
how—it should be implemented.
o A potential accessibility bonus should be carefully considered in
conjunction with any other potential incentives for accessible housing
(see Strategy 5).
o Consult with developers and housing providers to determine their level
of interest.
o Work with Lake Oswego's Planning Commission and City Council to
consider potential code approaches, and if directed,to adopt code
amendments.
o City Council Action (if directed): Legislative CDC text amendments.
• Code requirement.
o Evaluate potential new accessibility requirements,working closely with
non-profit and market-rate housing developers to understand how their
projects might be impacted.
o Conduct a pro forma analysis to evaluate potential impacts to project
costs.
o Implement via CDC updates, if directed.
• Financial incentive.
o Evaluate an incentive program (e.g., MUPTE, Strategy 5) to increase the
number of dwelling units designed accessibly.
o Work with developers to gather feedback on program parameters and
interest.
o Implement incentive program through Council action, if directed.
Lead & Partners Lead: Lake Oswego Community Development
Partners: Home Building Association of Greater Portland; Fair Housing Council of
Oregon;AARP; non-profit and for-profit housing developers.
5. Multiple Unit Property Tax Exemption (MUPTE)
Description This tax exemption can be used to encourage multi-family or middle housing
with particular features or at particular price points by offering qualifying
developments a partial property tax exemption for 10 years (or longer,for
housing subject to affordability agreements). It can be offered to new
development or existing housing that is converted to meet the eligibility criteria.
MUPTE is a flexible tax abatement that can be used in various ways to encourage
needed housing.The City has broad discretion as to how to structure the
program. Eligibility criteria could include requirements for affordability,
accessibility/universal design, unit size, or other desirable features.
PP 22-0005 ATTACHMENT 1/PAGE 22 OF 103 Housing Production Strategy 119
The City must designate specific areas where the MUPTE applies, unless
including affordability as a criterion, in which case the whole city could be
eligible.
(Authorized by ORS 307.600-637)
Recommendation Evaluate adoption of the MUPTE program with criteria that would make it
available to housing with either accessible design (see Strategy 4) or moderate-
income units affordable at 80-120%AMI.
Considerations Applicable to all tax exemption programs:
• Tax exemptions apply only to the tax levy of a governing body that adopts
the exemptions. In order for the full property tax to be exempted,the City
must seek approval from partner jurisdictions that, together with the City,
make up at least 51%of the overall tax levy. Lake Oswego would need to
secure agreement from either the School District or County or both.
• The City and participating taxing districts will lose property tax income for
the duration of any tax exemption, reducing revenue for City services and
revenue for participating taxing districts. Such taxing districts may express
resistance to new tax abatement or exemption programs that involve
reduced revenue, particularly for programs intended to produce market-rate
housing.
Applicable to the MUPTE under consideration:
• The City should consider what income criteria would best fill the gaps in the
local housing market. If the program targets rent levels for households
earning up to 120%AMI, developers may be able to charge market-rate
rents, which may not be more affordable than they would otherwise charge.
A lower income target such as 100%AMI may be more effective at achieving
lower-cost units.The local rental market and household income levels
should be carefully evaluated as part of the City's analysis of this program.
Anticipated • Housing Need Addressed:This strategy has the potential to increase
Impact development of multi-family housing in targeted areas of the city.
Stakeholders in the HPS process identified a particular need for more multi-
family housing outside the Town Center.Targeting the program to accessible
units would help meet the needs of seniors and people with disabilities (see
Strategy 4 for estimates of total need).Targeting the program to households
earning 80-120%AMI would help meet the needs of moderate-income
households.The HNA indicates that 16%of new needed housing units over
the next 20 years will be needed by those earning 80-120%AMI.
• Population served: Moderate-income households, seniors, and people with
disabilities.
• Income level: Depends on how the program is structured.
• Benefits and Burdens:This strategy has the potential to benefit various
priority populations by encouraging housing needed by those communities
(accessible units, moderate-cost units, etc.).The City could also target a
MUPTE program to specific geographies to target housing development in
PP 22-0005 ATTACHMENT 1/PAGE 23 OF 103
neighborhoods where it is most needed. A challenge for the City will be to
determine how best to balance those various needs to determine what
housing types or features are most appropriate to include as criteria for the
MUPTE abatement.This should be considered in the broader context of the
HPS to ensure that the City's actions benefit all priority populations in
equitable ways.
No burdens on priority populations are anticipated for this strategy,
provided it is implemented in the ways described above.
• Housing tenure:Typically for-rent.
• Magnitude: Moderate—This strategy could encourage production of more
multi-family units that meet housing needs not currently being met by the
private market.As noted above,to make this program effective at
encouraging lower-cost units,the City should carefully consider what income
criteria would best fill the gaps in the local housing market.
Time Frame Implementation: Begin and Complete in Medium Term
Impact:The MUPTE can be used once it is adopted, and for as long as the City
offers the exemption.The impact on housing supply is expected to be longer-
term.
Implementation • Further evaluate the various options for structuring the MUPTE program to
Actions determine whether—and how—it should be implemented.
• Consult with developers and housing providers to determine their level of
interest.
• Determine desired eligibility criteria (e.g., affordability, accessibility, etc.).
• Seek input from overlapping taxing districts on their willingness to support
the exemption.
• City Council Action: Adopt tax exemption program by resolution or
ordinance.
Lead & Partners Lead: Lake Oswego Community Development
Partners: Lake Oswego Finance Department; overlapping taxing jurisdictions
6. Pre-approved plan sets for ADUs
Description Pre-approved (or permit-ready) plan sets have been reviewed in advance for
conformance with zoning and building codes. Permit-ready plan sets can reduce
housing development costs by reducing design and permit process times and
fees.This strategy could be used to encourage more development of accessory
dwelling units (ADUs).
Permit-ready plans can reduce costs in three main ways:
• Streamlining permit processes—Permitting times are frequently cited by
market-rate builders as a major barrier to housing production, as delays
in permitting often translate into increased costs.
PP 22-0005 ATTACHMENT 1/PAGE 24 OF 103 Housing Production Strategy 121
• Reducing permit fees—The Building Department may decrease permit
review charges for applicants because of the simplified review.
• Reducing design fees—The builder would pay less in professional
services to architects, etc.
ADUs are a type of housing located on the same lot (and sometimes in the same
structure) as a primary dwelling unit.They are generally smaller in size
compared to the primary home and come in a number of different
configurations. In Lake Oswego,there may be one ADU per primary home.ADUs
offer opportunities for multigenerational living,with family members living on
the same site but in a separate dwelling. ADUs can also be rented out, allowing
the homeowners to supplement their income.
Considerations • This strategy potentially lowers site and building design costs, which could
lead to an increase in new ADU units and increase rental stock.
• There are upfront costs associated with developing the pre-approved plans,
including paying design fees for architects that develop the base plans, and
dedicating staff time for working with the architects and reviewing the plans.
• The City could partner with a university, design institution, or develop a
competition to produce plans. For example, the City of Eugene has
partnered with several design firms to offer low-cost ADU plans, each of
which is available for only$500. Eugene also offers a free ADU plan
developed in-house.3
• ADUs are a good candidate for this type of program due to their small size
and relative simplicity.Also, homeowners wanting to build an ADU may be
especially interested in pre-made designs, as compared to experienced
homebuilders.
Anticipated • Housing Need Addressed: Increased housing choices within existing
Impact neighborhoods. Increased rental opportunities. Options for
multigenerational housing. Opportunities for aging in place. Many of these
were mentioned by stakeholders in the HPS process as a gap in the local
market.
• Population served: Moderate to higher-income households; seniors; people
with disabilities; multigenerational households; renters
• Income level: Likely 80%AMI and above
• Benefits and Burdens:ADUs are a popular choice for elders who wish to live
on the same property as their children/grandchildren (ADUs are sometimes
referred to as "granny flats"). As such,this strategy can offer benefits to
seniors and multigenerational households. Because ADUs are often single-
level, small homes,they may also benefit people with disabilities—with the
potential added benefit of enabling family to live nearby for assistance and
support.
No burdens on priority populations are anticipated.
3 City of Eugene. Pre-Approved Accessory Dwelling Unit Program. https://www.eugene-or.gov/4707/Pre-
Approved-Accessory-Dwelling-Unit-Pro
PP 22-0005 ATTACHMENT 1/PAGE 25 OF 103
• Housing tenure: For rent
• Magnitude: Moderate—This strategy would likely lead to more
development of ADUs in the city. Pre-approved plans can lower the logistical
barriers for prospective ADU builders, and can be paired with a faster,
cheaper permitting process.This could increase the number of available
rental properties and increase housing choices in existing developed
neighborhoods. However,the strategy would have a limited impact on
overall housing supply.
Time Frame Implementation: Begin in Medium Term; Complete in Longer Term. Could
potentially be implemented sooner if the City can use pre-approved plans that
are already developed—e.g., for another jurisdiction.
Impact:The action is expected to have impact over the longer term.
Implementation • Develop ADU plans in collaboration with one of the partners listed below.
Actions • Work with the Building Department to ensure plans meet all City Code
standards, approve the plans, and adopt reduced fees for the plans.
• Work with the Building Department to implement a streamlined review
process.
Lead & Partners Lead: Lake Oswego Community Development(including Building Department)
Partners: Universities, design institutions, and/or design firms
7. Modify System Development Charge (SDC) fee schedule
Description SDCs are one-time charges assessed on new development to pay for the costs of
expanding public facilities to serve new development.The City of Lake Oswego
charges SDCs for water, sewer, parks, and transportation (affordable housing
meeting certain criteria is eligible for an exemption to SDCs).The Lake Oswego
School District also charges a construction excise tax(effectively an SDC) for new
construction in the city(except for affordable housing).
This strategy involves updating the City's SDC fee schedule so it is tied more
directly to dwelling size. Currently,the City charges the same rates for all single-
family homes regardless of size. Each unit of a duplex is also charged the same
single-family fee. Multi-family housing (3 or more units) is charged a lesser fee
per unit.'While cottage clusters are currently charged the single-family rate for
each unit,the City is planning to update the SDC fee schedule in the near term so
that cottage clusters are charged a lower rate per unit.
Scaling SDC fees to dwelling size would better match a development's charges to
its actual cost or impact on the system. Smaller housing units, including some
middle housing types,typically have less impact on water, sewer, or
transportation facilities, given the reduced average size and occupancy of these
units.This is not fully reflected in Lake Oswego's current SDC schedule, although
the current schedule does include lower fees for multi-family housing units.
' Lake Oswego Master Fees and Charges, 2024. https://www.ci.oswego.or.us/finance/master-fees-and-charges
PP 22-0005 ATTACHMENT 1/PAGE 26 OF 103 Housing Production Strategy 123
The City could consider charging fees on a per-square-foot basis, rather than
per-unit.'
Considerations • This strategy would reduce barriers to construction of more affordable,
smaller-scale homes, including small single-family homes and middle
housing.
• The City sets its SDC fee schedule based on projected needs for system
construction and improvements. Modifying the SDC methodology would
likely increase fees for larger homes to make up for the reduced fees for
smaller units.
• As part of the current Parks Plan 2040 update project (completion expected
in 2025),the City will consider modifying its Parks SDCs to be scaled by
housing unit size.That could provide a jumping off point and a model for a
larger discussion about SDC schedules and potential future refinements to
SDCs for other services.
Anticipated • Housing need addressed:This strategy will facilitate development of
Impact smaller, more attainable housing units that may be affordable to moderate-
income and smaller households.The HNA indicates that 16%of new needed
housing units over the next 20 years will be needed by those earning 80-
120%AMI.
• Population served: Moderate to higher income households; first-time
homebuyers; single or two-person households; seniors
• Income level: 80%AMI and above
• Benefits and Burdens:This strategy can increase production of smaller and
lower-cost units which may benefit lower-income households, but is more
likely to benefit moderate-or higher-income households. Smaller unit sizes
may be of particular benefit to seniors due to lower maintenance and lower
housing costs.
No burdens on priority populations are anticipated. However, reducing SDCs
for smaller units would likely need to be offset by increased SDCs for larger
units,the cost of which would be passed onto homebuyers. It is anticipated
that homebuyers that can afford larger units would be less impacted by the
increased cost than moderate to lower income homebuyers.
• Housing tenure: For rent or sale
• Magnitude: Low to Moderate—Given current SDC incentives already
available,this tool may have a low to moderate impact in incentivizing
additional housing units. It may incentivize some projects to produce a
greater number of marginally smaller units,thus increasing density and unit
production somewhat.
' For example,the City of Newport, Oregon charges SDCs on a per-square-foot basis for single-unit dwellings.
https://newportoregon.gov/dept/cdd/documents/FYE24SDCRates.pdf.The City of Albany, Oregon scales its
sewer and streets SDCs for single-unit dwellings by dwelling size, with thresholds at 1,000 sq ft, 1,250 sq ft, and
3,000 sq ft. https://albanyoregon.gov/images/stories/cd/devicenter/fee guide city of albany oregon.pdf.
PP 22-0005 ATTACHMENT 1/PAGE 27 OF 103 Housing Production Strategy 124
Time Frame Implementation: Cottage cluster SDCs: Complete in Near Term. Overall SDC
methodology: Begin and Complete in Longer Term.
Impact:The process of modifying a city's SDC methodology can be lengthy, as it
is necessary to analyze projected needs for system construction and
improvements and ensure that SDC revenues will be adequate to meet projected
needs. Once a new SDC schedule is implemented, the impact to housing
development is expected to be longer-term.
Implementation • Adopt SDC rates adjustments for cottage clusters, working with City Council
Actions and other City departments.
• Work with City Council, other departments (Public Works, Finance, Parks,
etc.), and development stakeholders on policy discussions around modifying
the SDCs.
• Potentially work with a consultant to develop an updated SDC methodology.
• City Council action:Adopt modified SDC schedule by resolution or ordinance.
Lead & Partners Lead: Lake Oswego Engineering
Partners: Development stakeholders
STRATEGIES TO SUPPORT AFFORDABLE HOUSING FOR LOWER-INCOME
HOUSEHOLDS
The strategies below are intended to facilitate development of regulated affordable housing (i.e.,government-
subsidized housing)that meets the needs of low-and moderate-income households.The HPS indicates that over
a quarter of new housing units needed by 2043 will be needed by lower-income households earning 80%or less
of the area median income.
8. Nonprofit Low-Income Housing Tax Exemption
Description This tax exemption benefits low-income residents by alleviating the property tax
burden on those organizations that provide this housing opportunity. In
particular,this strategy reduces ongoing operations costs and supports long-
term stability for affordable housing developments.
Eligible properties must be offered to low-income persons (at or below 60%AMI
for the initial year, and at or below 80%AMI for subsequent years), or held for
the purpose of developing low-income rental housing.The housing may be for
rent or for purchase, and could be new development or existing housing
acquired by a nonprofit for the purpose of converting it to income-restricted
affordable housing.Jurisdictions may adopt additional eligibility criteria for the
exemption, provided they don't conflict with state statutes.
Applicants must renew their tax exemption applications annually. As long as the
housing remains affordable to low-income residents,there is no time limit to the
tax exemption.
(Authorized by ORS 307.540-548)
PP 22-0005 ATTACHMENT 1/PAGE 28 OF 103 Housing Production Strategy 125
Lake Oswego City Council chose to fast-track adoption of this strategy to make it
available to affordable housing projects being developed in 2024 (including the
Mercy Greenbrae development at Marylhurst Commons).The tax exemption
was approved by City Council as Ordinance 2945 in May 2024.6
Considerations • By reducing operating income, property tax abatement programs can be a
powerful tool to increase the feasibility of low-income housing, and perhaps
increase the number of units that are feasible in planned projects. Many
affordable housing developers cite abatements such as the Nonprofit
Housing exemption as an essential tool in helping make projects financially
feasible.
• See Strategy 5, MUPTE,for considerations related to all tax exemption
programs.
Anticipated • Housing need addressed: Government-subsidized affordable housing for
Impact low-income households.
• Population served: Low-income households
• Income level:0-60%AMI (for residents' initial year of tenancy; after the first
year, up to 80%AMI)
• Benefits and Burdens:This strategy would primarily benefit low-income
households by increasing the City's capacity to support production of
subsidized affordable housing.
No burdens on priority populations are anticipated.
• Housing tenure: For rent
• Magnitude: High—This abatement can have a large impact on making low-
income affordable housing more feasible to develop.The open-ended
nature of the abatement(as long as the project maintains affordability) can
offer very significant savings to the property manager over time and increase
the viability of offering affordable rents indefinitely.The property tax level in
Lake Oswego is roughly$20,000 per$1M in valuation per year.A mid-to
large apartment complex could expect a valuation of many millions of
dollars, amounting to potentially hundreds of thousands in taxes per year.
An abatement of these taxes is a strong incentive and improves feasibility
considerably.
Time Frame Implementation:Already Complete
Impact:The tax exemption can be used once it is adopted, and for as long as the
City offers the exemption.The impact on supply of affordable housing is
expected to be longer-term.
Implementation City Council action: Adopt tax exemption program by ordinance. (Already
Actions completed.)
Lead & Partners Lead: Lake Oswego Community Development
Partners: Lake Oswego Finance Department; overlapping taxing jurisdictions
6 https://www.ci.oswego.or.us/planning/pp-24-0003-nonprofit-corporation-low-income-housing-tax-exemption
PP 22-0005 ATTACHMENT 1/PAGE 29 OF 103
9. Low-Income Rental Housing Tax Exemption
Description This is a 20-year tax exemption for any entity that provides income-restricted rental
housing, including nonprofits and for-profit developers. Eligible properties must be
offered for rent to low-income persons or held for the purpose of developing low-
income rental housing.Jurisdictions may adopt additional eligibility criteria for the
exemption, provided they don't conflict with state statutes. (Authorized by ORS
307.515-537)
Comparison of low-income housing tax exemption programs:
While these two exemption programs appear similar,they do have some key
distinctions.
Nonprofit Low-Income Low-Income Rental
Housing Housing
Housing Type Rental housing Rental housing
Income Levels Up to 60%AMI Up to 60%AMI
Eligible Developers Nonprofits only Nonprofit or for-profit
New vs.Acquired New construction or New construction only
Housing acquisition of existing
housing
Annual Renewal Yes No
Required?
Time Limit No limit 20 years
Recommendation Consider supplementing the adopted Nonprofit Low-Income Housing Tax Exemption
with this additional exemption program to offer more options and flexibility.
Considerations • Key advantages of this abatement are that it is available to more than just non-
profits and it does not require annual renewal.This can significantly reduce an
organization's administrative burden in implementing the exemption.
• However, this abatement has less flexibility compared to the Nonprofit Exemption
because it cannot be used for acquisition of existing housing and is limited to 20
years.
• See Strategy 5, MUPTE,for considerations related to all tax exemption programs.
Anticipated • Housing need addressed: Government-subsidized affordable housing for low-
Impact income households.
• Population served: Low-income households
• Income level: 0-60%AMI (for residents' initial year of tenancy; after the first year,
up to 80%AMI)
• Benefits and Burdens:This strategy would primarily benefit low-income
households by increasing the City's capacity to support production of subsidized
affordable housing.
No burdens on priority populations are anticipated.
PP 22-0005 ATTACHMENT 1/PAGE 30 OF 103 Housing Production Strategy 127
• Housing tenure: For rent
• Magnitude: High—Like the Nonprofit Exemption,this abatement can have a large
impact on new affordable housing production. As noted above, an abatement of
property taxes is a strong incentive and improves feasibility considerably.This
abatement is available to for-profit developers and therefore may generate more
new housing than the Non-Profit Exemption. While not open-ended, a 20-year
exemption matches the period in which a property would otherwise undergo
significant depreciation. However, at the end of the 20-year period,this housing
often reverts to market-rate status.
Time Frame Implementation: Begin and Complete in Near Term
Impact:The tax exemption can be used once it is adopted, and for as long as the City
offers the exemption.The impact on supply of affordable housing is expected to be
longer-term.
Implementation • Work with other taxing jurisdictions to gain approval.
Actions • Develop application standards and guidelines.
• City Council action: Adopt tax exemption policy by resolution or ordinance.
Lead & Partners Lead: Lake Oswego Community Development
Partners: Lake Oswego Finance Department; overlapping taxing jurisdictions
10. Public-private partnerships for affordable housing
Description Public-private partnerships (PPPs) are arrangements between public and private
entities to develop housing, especially affordable housing. PPPs have the capacity to
bring resources to the table that would otherwise not be available if each institution
were to provide housing on its own.
The City could partner with organizations to support their affordable housing efforts
in a variety of ways:
• Acquire land and/or donate city-owned land;
• Provide grants or low-interest loans for specific development or rehabilitation
projects;
• Provide direct funding; and/or
• Leverage federal, state, and regional resources.
Additionally,the City can pursue specific types of PPPs such as:
• Partnering to convert underutilized non-residential properties into housing.
The City could work with landowners to evaluate opportunities for adapting
vacant/underused buildings for new housing or mixed-use development.
• Utilizing surplus land owned by faith-based organizations for affordable
housing.The City could work with faith organizations to utilize their excess
land for affordable housing.
Recommendations The following specific partnership actions are recommended for implementation:
PP 22-0005 ATTACHMENT 1/PAGE 31 OF 103
• Consider donating surplus city-owned land for affordable housing as it becomes
available.
• Work with faith organizations to utilize excess or underutilized land for affordable
housing.Assist with favorable zoning, permitting, and financial incentives.
• Continue to leverage federal, state, and regional resources—such as the Metro
Affordable Housing Bond—to fund affordable housing in Lake Oswego.
• If a new TIF district is established (Strategy 11), use TIF funds to support
affordable housing partnerships.This could include addressing infrastructure
deficiencies or contributing funding to affordable housing more directly.
Considerations • The City is pursuing this strategy with several ongoing projects.This includes
partnering with the Sisters of Holy Names of Jesus and Mary and Mercy Housing
NW in facilitating the Mercy Greenbrae at Marylhurst Commons affordable
housing development.
• PPPs are often opportunity-driven and may be spearheaded by the City or by
private developers or partner agencies.
• Cities are often asked to provide land,financial assistance, and/or technical
assistance, with potentially moderate costs. More significant financial assistance
would depend on a new funding source.
Anticipated Impact • Housing Need Addressed: Government-subsidized affordable housing for low-
income households.
• Population served: Low-income households
• Income level: 0-80%AM I
• Benefits and Burdens:This strategy is intended to benefit low-income
households by increasing the City's involvement in development of affordable
housing.
No burdens on priority populations are anticipated for this strategy.
• Housing tenure: For rent or sale
• Magnitude: High—Partnerships with private developers or non-profit housing
agencies are very often a key component of a City contributing to new housing
production. Few City governments directly build housing.The incentives and
funding offered are aimed at these partners, who undertake the projects often
with a development agreement to ensure the public goals are met.The
magnitude of impact is high, and in a sense these partnerships are necessary for
most successful City-based housing initiatives.
Time Frame Implementation: Begin in Near Term; Ongoing implementation
Impact:Timing of impact depends on the nature of the public/private partnership.
Given availability of funds, impact to housing production would be expected to occur
over the longer term.
Implementation • Work with nonprofit, faith-based, or other organizations to discuss opportunities
Actions in Lake Oswego.
• Take action on partnership models and programs that best benefit the
organization and the City's financial and/or administrative capacity.
PP 22-0005 ATTACHMENT 1/PAGE 32 OF 103
• Partnership activities depend on the project, organization, and available
resources.
Lead & Partners Lead: Lake Oswego Community Development
Partners: Possibilities include landowners and organizations with excess land, as well
as nonprofit affordable housing providers.
11. Use Tax Increment Financing (TIF) to support affordable housing
development
Description This strategy involves using TIF funds to support affordable housing development.This
could involve creating one or more new TIF districts and incorporating affordable
housing into new TIF district plans. For example,the City could create a TIF set-aside
for affordable housing development programs within the district.
TIF is a funding mechanism in which future tax revenues in targeted development or
redevelopment areas (TIF districts/ urban renewal areas) are diverted to finance
infrastructure improvements and/or development.
At the time of adoption,the tax revenue flowing to each taxing jurisdiction from the
TIF district is frozen at its current level. Any growth in tax revenues in future years, due
to annual tax increase plus new development, is the "tax increment"that goes to the
district itself to fund projects in that area.TIF is a good tool to use in areas where new
development or redevelopment is anticipated.
While many different types of projects are eligible for TIF funds, for the most part,TIF
funds are used to pay for physical improvements in the district itself.These projects
can include participating in public/private partnerships with developers—including for
affordable, workforce, or market-rate housing—or can be used to complete off-site
public improvements that benefit and encourage new development in the area, or to
acquire key sites.TIF funds also can be used to purchase land.
TIF can be a direct source of funding for projects that meet public goals such as
providing affordable housing, increased density, or mixed-use buildings that might not
otherwise be feasible. In return for some public funding through TIF, private sector or
non-profit developers agree to provide these benefits. Urban Renewal can also be
used to purchase and reserve a key building site in the district to ensure that the
development that takes place there meets public goals.The site can be offered to a
development partner at reduced cost to provide the incentive.
Recommendation Incorporate affordable housing into the Urban Renewal Plan for the Foothills
Neighborhood.The Lake Oswego Redevelopment Agency (LORA) is currently planning
to update the Foothills Refinement Plan, after which a new urban renewal district will
be established.The City must include affordable housing as an approved "project" in
the Urban Renewal Plan in order for it to be eligible for TIF funding.
Considerations • TIF results in foregone tax revenue for the City and any other overlapping taxing
districts for several decades, although it can (and should) grow the tax base in the
long-term by supporting development that would not otherwise have occurred.
PP 22-0005 ATTACHMENT 1/PAGE 33 OF 103
• Once a new TIF district is established, it will likely be several years before there
will be sufficient revenue in the district to make significant investment in housing.
• Coordination and agreement with other taxing districts is also important.
Anticipated • Housing Need Addressed: Government-subsidized affordable housing.
Impact • Population served: Low-income households
• Income level: 0-80%AM I
• Benefits and Burdens:This strategy would primarily benefit low-income
households by increasing the City's capacity to support production of subsidized
affordable housing.
An intended outcome of urban renewal is increased property values and
redevelopment within the district. If not balanced by adequate investment in
housing production, urban renewal can lead to displacement of existing residents
facing increased property taxes and development pressures.This can be a burden
on existing low-income residents and should be considered carefully when
designating new TIF districts.
• Housing tenure: For rent or sale
• Magnitude: High—An extended TIF district or new programs focused on housing
have the potential to have a large impact on specific new projects with LORA
partners.The impact of an expanded TIF program on housing production will
depend on the revenue-generating potential of the district in question and the
prioritization of housing projects among the broader range of projects eligible for
urban renewal funding (e.g.,general infrastructure projects, beautification,
economic development, etc.). If housing is prioritized for funding, and
development opportunities are available within the district, it can directly bring
about housing production.
Time Frame Implementation: Begin in Near Term; Complete in Longer Term
Impact:Analysis and planning for a new TIF district can take several years. Once a TIF
district is established, it is expected to take several more years before adequate
revenues are accrued to begin spending the urban renewal funds.The impact on
housing production is expected over the medium or longer term.
Implementation • Incorporate affordable housing policies in the update to the Foothills Refinement
Actions Plan.
• Incorporate affordable housing into the Foothills Urban Renewal Plan. Include
affordable housing as an approved "project" in the plan and consider a dedicated
set-aside to use TIF funds for affordable housing.
• City Council to adopt URA boundaries and plan via ordinance.
• Use TIF funds to support partnerships with affordable housing producers (Strategy
10).
Lead & Partners Lead: Lake Oswego Redevelopment Agency
Partners: Community Development Department, Development stakeholders
PP 22-0005 ATTACHMENT 1/PAGE 34 OF 103
12. Affordable housing preservation inventory
Description This strategy involves preparing an inventory of subsidized and naturally
occurring affordable housing to support proactive policies intended to preserve
the affordable housing stock.The inventory would be used to target potential
properties for implementation of an affordable housing preservation strategy.
Considerations • This strategy could help offset some of the need for costly new construction.
• The strategy would be a good starting point if the City were to consider
future strategies to preserve affordable housing. Understanding the city's
stock of affordable housing could influence decision-making and
prioritization for a preservation strategy.
• The strategy would require staff time and resources to implement.
Anticipated • Housing Need Addressed: Housing for low-income residents.
Impact • Population served: Low-income households
• Income level:0-80%AMI
• Benefits and Burdens:This strategy is expected to benefit low-income
residents by evaluating the city's stock of naturally occurring affordable
housing, in support of a low-cost housing preservation strategy.
No burdens on priority populations are anticipated.
• Housing tenure: For sale or rent
• Magnitude: Low—This strategy will not contribute to new housing
production, but it will contribute to the preservation of existing affordable
housing, and aids in tracking performance metrics.
Time Frame Implementation: Begin and Complete in Medium Term
Impact:This strategy can provide information and influence decision-making
about housing preservation in the shorter term. However, impacts to the city's
housing inventory are expected to be longer term.
Implementation • Use Census data as a starting point.
Actions • Work with property owners to document housing costs.
• Update inventory on a regular basis.
Lead & Partners Lead: Lake Oswego Community Development
Partners: Property owners
PP 22-0005 ATTACHMENT 1/PAGE 35 OF 103 Housing Production Strategy 132
OTHER
The strategy in this category does not fit easily under the other headings, but supports equitable
implementation of all recommended housing strategies.
13. Fair Housing policy and education
Description This strategy involves amending the Comprehensive Plan to explicitly make
Affirmatively Furthering Fair Housing a Housing Policy. Fair Housing laws protect
individuals in "protected classes" from housing discrimination. Protected classes
in Oregon include race, color, national origin, religion, disability, sex (includes
pregnancy), sexual orientation, gender identity, age, and marital status.The City
could add additional protected classes, such as ancestry, ethnicity, or
occupation.
The City could also pursue the following types of actions to affirmatively further
fair housing and work to reverse historical patterns of discrimination and
exclusion in Lake Oswego:
• Create an Analysis of Impediments to Fair Housing.
• Conduct fair housing training for Council, Planning Commission, and other
relevant policymakers.
• Provide residents, property owners, property managers, realtors, lenders,
and others involved with real estate transactions with access to fair housing
information and referrals.
• Ensure that City staff know how to identify potential fair housing violations
and make referrals to the Fair Housing Council of Oregon and state and local
enforcement agencies.
In addition, other strategies identified in this list can also generally serve the
purpose of affirmatively furthering fair housing to the extent they expand
housing opportunities or choices for people in protected classes.
Considerations • This strategy would not necessarily contribute to housing production except
when it is implemented through other strategies described in this document
that result in housing production. However, in all cases it would
demonstrate the City's commitment to working towards fair housing
outcomes.
• Training and education would require staff time and resources to implement.
Anticipated • Housing Need Addressed:This strategy would not directly address identified
Impact housing needs in most cases, but it would help prevent housing
discrimination against protected classes.
• Population served: Protected classes
• Income level: All income levels
• Benefits and Burdens:This strategy is intended to benefit priority
populations by formalizing the City's commitment to fair housing goals,
better understanding fair housing issues in the community, and by educating
PP 22-0005 ATTACHMENT 1/PAGE 36 OF 103
City staff, housing stakeholders, and community members about fair housing
laws and residents' rights.
No burdens on priority populations are anticipated.
• Housing tenure: For sale or rent
• Magnitude: Low—Fair housing policy and education will not directly
contribute to housing production, but it could provide additional protections
against housing discrimination. It could also bolster the City's focus on
prioritizing housing equity and affordability in its housing programs and
investments.
Time Frame Implementation: Near Term (Fair Housing Policy); Medium Term (other actions)
Impact: Impact on community understanding of fair housing can be in the short
term. Impact on fair housing outcomes is expected to be longer term.
Implementation • Policy adoption requires Legislative Comprehensive Plan text amendment.
Actions • Partner with organizations such as the Fair Housing Council of Oregon on
training.
• Develop informational materials.
• Provide training to current staff and new hires.
Lead & Partners Lead: Lake Oswego Community Development
Partners: Fair Housing Council of Oregon
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Rendering of proposed Hacienda CDC affordable housing development in Lake Oswego
PP 22-0005 ATTACHMENT 1/PAGE 37 OF 103 Housing Production Strategy 134
A CHI FAIR AND
QUI1IBLE HOUSING
1 UTCOMES
This section summarizes how the housing strategies detailed in this report will help achieve fair and equitable
housing outcomes.As required by OAR 660-008, all the strategies have been evaluated for achieving the
different outcomes identified below. In addition,the City of Lake Oswego is already carrying out a range of
housing measures that support fair and equitable outcomes, as summarized in the Contextualized Housing
Needs Assessment(Appendix A).Those existing measures are also identified below.
Affordable Homeownership and Affordable Rental Housing
Many of the strategies included in the HPS support production of affordable rental housing and the opportunity
for wealth creation via homeownership—especially for low-and moderate-income households that have been
disproportionately impacted by past housing policies.As described in the Contextualized Housing Needs
Assessment (Appendix A), many racial and ethnic minorities statewide are less likely to own the homes they
occupy—meaning that they tend to occupy rental units.These communities face systemic obstacles to home
ownership, including lower generational wealth, less access to capital and financing, and a history of
discrimination in lending and geography (e.g., redlining).The legacy of these barriers continues to hamper home
ownership for many minority households. Prioritizing affordable home ownership can begin to address these
patterns of exclusion.Also, by benefiting low-income households more broadly,these strategies are anticipated
to benefit populations with lower median household incomes — including certain racial and ethnic groups.
Strategies that address these needs include:
5. Multiple Unit Property Tax Exemption—Provided the City includes income as an eligibility criterion.
8. Nonprofit Low-Income Housing Tax Exemption
9. Low-Income Housing Tax Exemption
10. Public-private partnerships for affordable housing
11. Use Tax Increment Financing(TIF) to support affordable housing development
12. Affordable housing preservation inventory
Existing Measures:
• Height/density bonus for affordable developments: Such bonuses are allowed within limited areas.
PP 22-0005 ATTACHMENT 1/PAGE 38 OF 103 Housing Production Strategy 135
• Mandatory affordable housing in limited areas.
• Expedited permitting for affordable housing.
• Waived SDC fees for affordable housing.
• Surplus City-owned land/land banking for affordable housing.
• Utilizing surplus or underutilized land owned by faith-based organization for housing.
By implementing these affordable housing strategies, Lake Oswego can work to ensure equitable outcomes for
people with lower incomes.To further prioritize benefits for communities of color, the City can:
✓ Partner with culturally specific organizations or other organizations that often work with certain groups
(e.g., faith-based organizations).
✓ Target programs to certain city areas with higher proportions of people of color(e.g.,tax abatements
within certain neighborhoods).
✓ Use equitable engagement strategies to reach diverse communities.
Gentrification, Displacement, and Housing Stability
Many of the actions included in this HPS increase housing stability for residents and mitigate the impacts of
gentrification and displacement.The strategies listed above promote the development of affordable rental and
ownership housing and when targeted to areas that are experiencing—or may experience—gentrification, can
help to counteract displacement. Strategy 1, Code Audit and Amendments, can also help by identifying the
housing types most needed, removing code and procedural barriers, and incorporating new state laws intended
to enable local housing development.
Strategies that work toward preservation of existing low-cost housing, such as Strategy 12 Affordable Housing
Preservation Inventory, can also help prevent displacement. However,the City would also need to focus other
efforts—such as public-private partnerships—towards preservation of existing housing.
It should be noted that some strategies have the potential to increase risks of displacement by enabling denser
or more intensive development in existing residential areas,which could increase redevelopment pressures and
in turn may drive up the value and cost of existing housing to some degree.This could include Strategy 1 Code
Audit and Amendments, Strategy 3 Rezone Land, and Strategy 11 Tax Increment Financing.These strategies can
benefit lower-income populations by supporting development of affordable housing, or more attainable housing
types, in areas of higher opportunity and access to services. However, as part of implementing strategies that
rezone properties or increase allowed development intensity,the City will need to assess potential displacement
risks and ensure that these strategies are paired with the anti-displacement strategies listed above, which
should be specifically targeted at the residents affected by zoning or code changes or increased investments.
Housing Choice
The following strategies will facilitate access to housing choice for communities of color, low-income
communities, people with disabilities, and other state and federal protected classes:
1. Code audit and amendments—Remove barriers to development of needed housing types, such as
multifamily housing, smaller units,ADUs, and middle housing.
2. Remove or reduce minimum parking requirements—Reduce parking mandates as a barrier to housing
development, especially multifamily housing.
PP 22-0005 ATTACHMENT 1/PAGE 39 OF 103
4. Evaluate accessible design incentives or mandates—Use requirements or incentives to encourage
housing that is accessible to people with disabilities.
5. Multiple Unit Property Tax Exemption (MUPTE)—Target tax abatements to encourage accessible units
and/or moderate-cost units.
6. Pre-approved plan sets forADUs—Facilitate ADU development through faster and less costly permitting.
7. Modify System Development(SDC)fee schedule—Encourage smaller housing units by scaling SDCs by
unit size.
Existing measures:
• Increased code flexibility for accessory dwelling units.
• Short-term rental regulations.
• Waived SDC fees for ADUs.
• Lot coverage bonus for housing within limited areas.
A potential trade-off of potential accessibility mandates in Strategy 4—especially for subsidized housing—is that
it could limit the number of units produced or prevent some projects from being developed.This is an important
consideration for implementation. Strategy 5, MUPTE, could help offset these concerns by offering a tax
incentive for projects that include accessible units.
The strategies listed above that promote more attainable homeownership opportunities (smaller units, middle
housing, condos) have the potential to benefit communities that have been disproportionately impacted by past
housing policies, especially communities of color.These strategies encourage a broader range of housing choices
that are more attainable for moderate-income households than typical single-detached housing.
Location of Housing
The strategies listed below can encourage housing in compact, mixed-use neighborhoods, helping to reduce
greenhouse gas emissions and increasing opportunities to live in neighborhoods near needed services and
amenities.
1. Code audit and amendments—Remove barriers to multifamily housing and residential development
within mixed-use districts.
2. Remove or reduce minimum parking requirements—Reduce parking mandates as a barrier to denser
housing.
3. Rezone land—Rezone land in areas that are near existing higher-density or commercial areas, or other
amenities, such as parks and schools, and that have good access to transit and services.
5. Multiple Unit Property Exemption (MUPTE)—Incentivize multi-unit housing in targeted areas.
11. Use T1F to support affordable housing—Support housing development in a new urban renewal district
for the Foothills Neighborhood,just east of Downtown Lake Oswego.
Existing Measures:
• Increased density near transit stations.
• Use of urban renewal funds to support housing near Downtown.
• Conversion of underperforming commercial assets in Downtown.
PP 22-0005 ATTACHMENT 1/PAGE 40 OF 103
These strategies can increase allowances for higher density housing in residential and mixed-use areas that are
located near transit and that are within walking distance of a variety of businesses, services, public facilities, and
other amenities.This is a particular benefit to low-income households and people with disabilities,who are less
likely to own a car and may rely on transit and other modes to get around.The MUPTE program (Strategy 5) can
also be targeted to amenity-and service-rich parts of the city where residents would most benefit from
proximity.
Housing Options for Residents Experiencing Homelessness
The HPS does not include strategies that are specifically aimed at addressing homelessness or reducing the risk
of households becoming homeless. However, several of the HPS strategies that support affordable housing
development could be targeted to benefit extremely low-income households. For example, Strategy 10, Public-
private partnerships for affordable housing, could be targeted to housing that benefits those with incomes
below 30%AMI.This could be supported by regional or state funding sources. Also, the Nonprofit Low-Income
Housing Tax Exemption recently approved by City Council would benefit deeply affordable housing. In addition,
the City could work with Metro and Clackamas County to target some of the regional supportive housing
services funding (via Ballot Measure 26-210)to support services and housing within Lake Oswego.
Fair Housing
This section identifies how the City will use the HPS to affirmatively further fair housing for all state and federal
protected classes.This includes addressing disproportionate housing needs, patterns of integration and
segregation, and disparities in access to housing opportunity. Lake Oswego is committed to furthering fair
housing outcomes by including a fair housing strategy in the HPS (Strategy 13). Adopting a comprehensive plan
policy to Affirmatively Further Fair Housing would demonstrate the City's commitment to working towards fair
housing outcomes in the city and could also bolster the City's focus on prioritizing housing equity and
affordability in its housing programs and investments. Other actions identified in Strategy 13, including fair
housing training for City staff and policymakers and providing information to those involved with real estate
transactions, would also help ensure fair housing outcomes for the local housing market.
In addition, strategies that encourage affordable rental and homeownership housing, increase housing stability,
and increase housing choice are all part of supporting Fair Housing(see above).
PP 22-0005 ATTACHMENT 1/PAGE 41 OF 103
MONLTORING PROGRESS
AND OUTCOMES
The City of Lake Oswego is required to monitor the implementation and progress of the strategies
recommended in the HPS and to report on progress to DLCD three (3)years after adoption.That progress report
must include:
• A summary of the actions already taken by the city to implement the strategies adopted in the HPS
Report. If the city has not implemented housing strategies per the schedule adopted in the HPS report,
the city must provide an explanation of the circumstances or factors that posed a barrier to
implementation and a plan for addressing the identified need that the strategy addressed;
• A reflection of the relative efficacy of implemented housing strategies adopted in the HPS; and
• A reflection of the efficiency of the actions taken in response to the Fair and Equitable Housing
Outcomes described previously in this report.
In addition,the City will provide a yearly summary as part of the overall report that details the above listed
items.This is expected to be a simplified version of the required three-year report that includes a more limited
set of key metrics.
PROPOSED MEASURES
Lake Oswego proposes the following measures to monitor the progress and impact of the HPS implementation:
Permitted/Constructed Housing Units
• Monitor and track housing development applications and building permits by housing type,
location/zone, density/lot size, and number of bedrooms. Use this information to estimate the
potential change in the mix and range of different types of housing developed over time.
• Specific tracked housing types should include single-detached,townhouse, duplex,triplex, quadplex,
cottage cluster, multi-dwelling, manufactured housing, accessory dwelling units, and mixed-use
residential developments/units.
• Track the number of new regulated affordable housing units and loss of regulated affordable
housing units.
o If affordable housing developments take advantage of any regulatory or financial incentives,
those should be noted.
PP 22-0005 ATTACHMENT 1/PAGE 42 OF 103 Housing Production Strategy 139
• Track the number of regulated affordable housing units that Lake Oswego contributed funding to,
including the sources of funding or tax exemption.
• Track the number of accessible housing units constructed and/or rehabilitated to enhance
accessibility. Note when those units are built pursuant to adopted City requirements or incentives.
• If MUPTE is adopted,track:
o Number of projects and units that qualify for the program.
o How many units are affordable (if this is a criterion that the City adopts) and at what level.
o Market rents (if possible), and any other features/ public benefits they provide as part of
qualifying for the abatement (e.g., accessibility features).
• Identify successful partnership projects that resulted in housing production or housing stability for
identified groups in the HPS; include number of units built, preserved, or rehabilitated and the
number of people served by the partnership(s).
Economic and Demographic Data
• Track changes in the characteristics of Lake Oswego's population including changes in:
o Median household income
o Percent of population of color
o Percent of renters
o Percent of renter and owner households that are cost burdened and severely cost burdened
• Monitor changes in housing prices, median rents and median sales prices
Programs and Adoption Actions
Document the following:
• Successful adoption of Code Amendments related to the strategies identified in the HPS.
• City Council Ordinances related to the HPS strategies (e.g.,tax abatement, etc.).
• Achievement of annual city work plan items related to strategies in the HPS.
Outreach
Summarize the following:
• Documented coordination with property owners in efforts to produce needed housing identified in
the HPS.
• Documented consultation with non-profit and market-rate housing developers, and other
community stakeholders to seek input on how implemented HPS strategies are working.
• Summary of continued housing engagement efforts and resulting actions.
The ability to report the progress described above will depend on the City's ability to obtain and evaluate readily
available data and information. Availability or lack thereof may necessitate refinements to monitoring
approaches.
PP 22-0005 ATTACHMENT 1/PAGE 43 OF 103 Housing Production Strategy 140
LIST OF APPENDICES
Appendix A: Contextualized Housing Needs Memorandum
Appendix B: Engagement Summary
Appendix C: Pre-HPS Survey Results
PP 22-0005 ATTACHMENT 1/PAGE 44 OF 103 Housing Production Strategy 141
APPENDIX A:
CONTEXTUALIZED HOUSING
NEEDS ASSESSMENT
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LAKE OSWEGO CONTEXTUALIZED
HOUSING NEEDS ASSESSMENT
December 27, 2023
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PP 22022-0005 ii+REI IIE1f 1nA8E 10 8F 183
12/27/2023
CONTENTS
Executive Summary 1
I. Introduction 6
II. Market Conditions 7
Housing Tenure 7
Market Conditions (For-Sale Housing) 7
Market Conditions (Rental Housing) 9
III. Socio-Economic and Demographic Trends Affecting Housing Needs 12
Family Households 14
Group Quarters Population 14
Age 14
Diversity Trends 16
People with a Disability 18
Income Trends 20
Poverty 21
People Experiencing Homelessness 22
Households Needing Publicly Assisted Housing 23
Agricultural Workers 23
Veterans 23
IV. Barriers to Development of Needed Housing 25
V. Adopted Measures 27
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12/27/2023
EXECUTIVE SUMMARY
The City of Lake Oswego completed its most recent Housing Needs Analysis (HNA) in the fall of 2023.The
analysis included an inventory of buildable land for residential uses and a projection of future housing
need, consistent with state and regional requirements.The HNA found that, despite a very low assumed
growth rate over the 20-year planning horizon, the City of Lake Oswego has a need for nearly 2,000 new
housing units, including over 1,100 multi-family and middle housing units. According to the HNA, about
half of those units are needed to meet upper income ranges (greater than 120%of the Area Median
Income, or AMI), while the remaining half are needed to meet very low to middle income household
needs.
To advance the City's planning efforts to encourage and allow for development of needed housing,the
City is in the process of creating a Housing Production Strategy(HPS), the purpose of which is to identify
a set of actions that the City of Lake Oswego will take to facilitate housing development that meets the
needs of the community.The HPS focuses on how to fill the gap between the City's housing need and
supply, particularly housing available to low-and moderate-income households—and particularly low-
cost rental housing.
A key step in this process is developing a Contextualized Housing Needs Assessment (CHNA) per OAR
660-008-0050(1).This assessment is intended to build on previous work conducted for the HNA to
describe demographic, housing, and market conditions; housing affordability issues; barriers to meeting
identified housing needs, including the needs of traditionally underserved and disadvantaged
populations; and existing or previous programs implemented to address housing needs.
Data sources for this report include the US decennial census and 5-year American Communities Survey
(ACS)tables, CoStar, Regional Multiple Listing Service (RMLS), and Johnson Economics. Key takeaways
from this report follow.
Summary of Market Conditions
• For-Sale Housing. The median sale price was$860,000, while The average (mean) sale price was
$1,075,000 during the last 12 months.The median square footage was 2,300 sq.ft. Attached
units and condominiums currently make up a significant share of home sales (28%).The median
home sale price in Lake Oswego has more than doubled over the past 10 years,from $395k in
2012 to $860k in 2022. Median price growth has averaged 8% per year over the past decade but
has recently experienced the strongest one-year growth in 2020 (14%) and 2021 (19%).
• Rental Housing.The average effective rent in Lake Oswego is$2,038/mo. In the last decade,
rent growth has been 52%or 4.3% per year. By comparison, inflation has been 31%or 2.7% per
year for the same period. Rents peaked in 2022 and have moderated slightly since.
• Housing Affordability. 75%of recent sales in Lake Oswego were priced at least$600,000.
Homes in this range would be mostly affordable to households earning at least$175,000 per
year.This is well above the median household income of$123,000. In addition, nearly half of
renter households in Lake Oswego are considered housing cost burdened (i.e., pay more than
30%of their income for housing).
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12/27/2023
• Publicly Assisted Housing.The state tracks three current subsidized affordable housing
properties in Lake Oswego, with a total of 76 units in 2023.The majority (75) of these units are
offered for elderly residents.The Marylhurst Commons will offer an additional 100 affordable
units for families when it is constructed. Upon completion in 2024, the total 176 subsidized units
in Lake Oswego will represent 1% of the local housing stock.The Housing Authority of Clackamas
County administers over 1,600 Section 8 housing choice, some of which are used in Lake
Oswego. No agricultural worker housing exists currently in Lake Oswego.
Figure EX-1.Lake Oswego Home Sales(12 months,Ju1y2022 to July2023)
Home Sales by Unit Type Home Sales by Price Level
$900,000+ 319
$800,000-$899,000 66
20% $700,000-$799,000 67
$600,000-$699,000 56
8%
$500,000-$599,000 ■ 39
0%0 72% $400,000-$499,000 . 31
$300,000-$399,000 . 47
$200,000-$299,000 ■ 43
$100,000-$199,000 13
Detached Home Manuf. Home <$100,000 0
Attached Home Condo
0 100 200 300 400
Source: RMLS,Johnson Economics
Socio-Economic Information
• Racial Diversity. Lake Oswego is roughly 80%white, 8%Asian, and 9%two or more races.The
City is more diverse today than ten years ago when approximately 90%of the population was
white.
• Disability.There are roughly 3,140 individuals in Lake Oswego with one or more disabilities.
• Veterans.Veterans are 6% of the adult population. 63%are 65 and older. Veterans have lower
than average poverty levels, and 21% have some sort of disability.
Lake OswegoS Contextualized Housing Needs Assessment I ee GEE 49 pE 1 3 2
PP 22-PP0�2-0005 ATTACHMENT 11/PAGE 49 8F 183
12/27/2023
Figure EX 6.Population by Race
Share of Population by Race
100-0 Lake Oswego (2010)
as
SO4 ■Lake Oswego (2424)
60% CIackamas Co.
40° Oregon
20%
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SOURCE: US Census,Johnson Economics LLC; Census Tables: P1, P2 (2010, 2020)
Figure EX 7.Population with Disabilities
Share of Population
Population with a disability 7.8%
Hearing difficulty 2.4%
Vision difficulty 1.7%
Cognitive difficulty 2.7%
Ambulatory difficulty 2.9%
Self-care difficulty 1.1%
Independent living difficulty 2.3%
0% 2% 4% 6% 8% 10%
SOURCE: US Census,Johnson Economics LLC; Census Tables: DP02, (2020 ACS 5-year)
Lake OswegoS Contextualized Housing Needs Assessment I ee GEE 5 pE 1 3 3
PP 22-PP0�2-0005 ATTACHMENT 11/PAGE 58 8F 183
12/27/2023
Existing Adopted Housing Measures
The City of Lake Oswego already implements a variety of measures intended to enable or facilitate the
production of needed housing. In combination with the other findings in the Contextualized Housing
Needs report,this list will help the City and community understand where there are gaps in the City's
approach toward meeting its housing needs. Below is a brief summary of the key housing measures
adopted by the City, organized into the categories defined by DLCD.
Zoning Strategies
• Height/density bonus for affordable developments in the West Lake Grove Design District (WLG-
OC) and R-DD zones.
• Increased code flexibility for accessory dwelling units (ADUs) as to occupancy and size limits.
• Regulates short-term rentals to help preserve long-term rental opportunities regulations
• Requires affordable housing in limited areas of the city.
• Allows increased density near transit stations.
• Lot coverage bonus for housing within the Lake Grove Village Center Overlay(LGVCO).
Reducing Regulatory Impediments
• Removed parking mandates near transit.
• Expedites permitting for affordable housing.
Financial Incentives
• Waives system development charges (SDCs) and development review fees for affordable
housing and ADUs.
Financial Resources
• Uses urban renewal funds to support housing (recently with the North Anchor development).
Land Acquisition, Lease,and Partnerships
• Donates surplus City-owned land for affordable housing.
• Engages in public-private partnerships with non-profit organizations to produce affordable
housing units.
• Enables conversion of underperforming commercial assets into housing (recently with the North
Anchor site).
• Utilizing surplus land owned by faith-based organization for housing(recently with the
Marylhurst University Campus).
Barriers to Development of Needed Housing
Numerous factors contribute to the availability of housing in Lake Oswego—market factors, physical
conditions, regulations, public investments, etc. Some of these factors can serve as barriers to the
production of housing that is most needed in the city.To understand the major barriers to developing
needed housing in Lake Oswego,the project team interviewed a number of stakeholders involved in
housing production in the city. Following are some of the key housing needs that the stakeholders
identified as gaps in the market:
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12/27/2023
• Affordable housing for low-and moderate-income households
• Middle housing (e.g.,townhomes, duplexes, and cottage clusters)
• Housing options for seniors and opportunities for aging in place
• Options for more attainable homeownership (e.g., condos and middle housing)
• Apartments with family-size units (2-3 bedrooms)
• Multi-family housing outside the Town Center
Stakeholders identified the following barriers to meeting these housing needs, and to housing
production more generally:
• The high cost of land in Lake Oswego translates to high rental and sale prices, and makes deed-
restricted affordable housing especially challenging to pencil out.
• There are few large, developable sites within the City and urban service boundary to support
multi-family housing and other development types that typically rely on larger parcels of land.
• The City's Development Code can pose barriers to housing development. Stakeholders
identified issues such as highly-prescriptive Overlay and Design District standards,tree
protection/planting standards, and open space standards as particular challenges for housing.
• The City's development review and permitting processes can be lengthy and contribute to
housing costs.
• Neighbor opposition to affordable or higher-density housing can drag out the process and add
to costs.
A focus of the Housing Production Strategy will be to identify tools and strategies to remove or reduce
these barriers or help housing producers overcome them.
Lake OswegoS Contextualized Housing Needs Assessment I ee GEE 52 pE 1 3 5
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12/27/2023
INTRODUCTION
The City of Lake Oswego completed its most recent Housing Needs Analysis (HNA) in the fall of 2023.The
analysis included an inventory of buildable land for residential uses and a projection of future housing
need, consistent with state and regional requirements.The HNA found that, despite a very low assumed
growth rate over the 20-year planning horizon, the City of Lake Oswego has a need for nearly 2,000 new
housing units, including over 1,100 multi-family and middle housing units.According to the HNA, about
half of those units are needed to meet upper income ranges (greater than 120%of the Area Median
Income, or AMI), while the remaining half are needed to meet very low to middle income household
needs.
To advance the City's planning efforts to encourage and allow for development of needed housing,the
City is in the process of creating a Housing Production Strategy(HPS), the purpose of which is to identify
a set of actions that the City of Lake Oswego will take to facilitate housing development that meets the
needs of the community.The HPS focuses on how to fill the gap between the City's housing need and
supply, particularly housing available to low-and moderate-income households—and particularly low-
cost rental housing.
To provide context to Lake Oswego's housing needs, the memorandum uses data from the 2023 Housing
Needs Analysis, US Census, and other available sources describe in greater detail the context of socio-
economic, demographic trends, and market conditions.This memorandum also incorporates information
obtained though stakeholder engagement meetings with affordable housing producers and consumers,
landowners, and representatives of underrepresented communities, including people experiencing
homelessness, low-income households, renters, and non-profit and governmental organizations serving
those in need of housing.
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PP 22-PP0�2-0005 ATTACHMENT 11/PAGE 53 8F 183
12/27/2023
MARKET CONDITIONS
The information on housing market conditions provides a look into the way the housing market is or is
not meeting the needs of the residents of Lake Oswego.
Housing Tenure
Lake Oswego has a greater share of homeowner households than renter households.The 2021 ACS
estimates that 71%of occupied units were owner occupied, and only 29% renter occupied.The
ownership rate is little changed since 2000.The estimated ownership rate is higher across Clackamas
County(73%) and lower statewide (63%).
Market Conditions (For-Sale Housing)
This section presents home sales data from the Regional Multiple Listing Service (RMLS)for the prior 12
months (July 2022 to July 2023).There were 671 home sales in Lake Oswego over this period, or an
average of 56 sales/month. Currently, RMLS tracks 181 active listings, or over three months of for-sale
inventory at the average rate of the prior 12 months (see Figure 1). Of these listings:
• The median sale price was $860,000.
• The average (mean) sale price was$1,075,000.
• The average price per square foot was$430/square foot
• The median square footage was 2,300 square feet
• Attached units and condominiums make up a significant share of home sales (28%).
• 48%of sales were priced above$900,000.
• 34%of sales were priced between $500,000 and $899,000.
• Only 18%of sales were priced at less than $500,000.
• Only 7%of sales were priced below$300,000.
As shown in Figure 2,the median home sale price in Lake Oswego has more than doubled over the past
10 years,from $395k in 2012 to$860k in 2022. Median price growth has averaged 8% per year over the
past decade but has recently experienced the strongest one-year growth in 2020 (14%) and 2021 (19%).
Mobility patterns and work-from-home trends during the COVID pandemic were the likely contributors
to this trend, as remote workers from more expensive markets such as California and Seattle were able
to relocate to attractive Oregon communities. Competition for limited housing inventory during those
years also contributed to rising prices.The price increases moderated in 2022, growing by only 2%from
2021.
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Figure 1.Lake Oswego Home Sales(12 Months)
Home Sales by Unit Type Home Sales by Price Level
$900,000+ 319
$800,000-$899,000 66
20% $700,000-$799,000 67
$600,000-$699,000 56
8% $500,000-$599,000 ■ 39
0
0 72% $400,000-$499,000 . 31
$300,000-$399,000 . 47
$200,000-$299,000 ■ 43
$100,000-$199,000 3
Detached Home Manuf. Home <$100,000 0
Attached Home Condo
0 100 200 300 400
Sources: RMLS,JOHNSON ECONOMICS
Figure 2.Median Home Sale Price(2010-2022)
Median Sale Price
$900,000
$soo,000
$700,000
$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
$0
do titi titi ti'' N. N. do ti� tiw do �° titi titi
,10 ,�o do ,yo ,yo ,y ,Vo ,�o 'V do ,yo '10 ,yo
Sources: RMLS,JOHNSON ECONOMICS
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Affordability: As indicated, roughly 75%of recent sales in Lake Oswego were priced at least$600,000.
Homes in this range would be mostly affordable to households earning at least$175,000 per year, which
is well above the median household income of$123,000. Roughly 66%of households earn less than
$175,000 per year, meaning that the bulk of housing supply on the current for-sale market (75%) is likely
too expensive for most of these households.
Market Conditions (Rental Housing)
Lake Oswego has experienced an uneven vacancy rate over the last two decades, according to data from
CoStar.The following figure shows that rental vacancy in the area fell in the prior decade to a low
vacancy of under 4%. By 2017, when new apartment inventory was built in Lake Oswego, vacancy
climbed temporarily and has been moderating ever since (see Figure 3).
Average rents have climbed steadily since 2011 (Figure 4 and Figure 5).The average rent in Lake Oswego
has nearly doubled over that period, increasing to roughly$2.20/square foot, or an average of
$2,050/month according to data from CoStar. Rents peaked in mid-2022 at an average monthly rate of
$2,200/month and an average $2.35/square foot.
Figure 6 presents the average annual rent growth since 2001. Rent growth has remained mostly positive
since the prior recession.After rents fell at the outset of the COVID pandemic, it reversed by 2010 and
growth was positive until the most recent quarters. Since the second quarter of 2023, average rents have
fallen an estimated 5%on a year-over-year basis.
Figure 3.Rental Vacancy In Lake Oswego(2000-2023)
Vacancy Rate
12%
10%
8%
6%
4%
2%
0%
ti ti ti ti ti 1' ti 1' 3 ti ti •O
N. �o- �a �a oo- Ao- �a 0a N. , ") �o- °o- ,AO 0 Do- tio- �a o-
o° ° o° o° o° o° o° o° oti oti oti oti oti oti oti oti oti oti�a�
ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti A, ti
,yo
Source:CoStar,Johnson Economics
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Figure 4.Average Rent/Square Foot,Lake Oswego(2000-2023)
Effective Rent Per SF
$2.50
$2.00
$1.50 —
$1.00 —
$0.50
$0.00
62 6? 62 6? 62 6') 62 6') 62 �') 62 6'�') dry' 62 6? 62 6? 62 6? O�i Ory' O2 6? •<�
00 °ti oti o� o° o� o° 01 ow o° do titi titi ti� ti° ti`' ti° tit ti° ti° yo yti titi �o-
0 0 0 0 0 0 0 0 0
ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti a
,yo
Source:CoStar,Johnson Economics
Figure 5.Average Monthly Rent,Lake Oswego(2000-2023)
Effective Rent Per Unit
$2,500
$EE
$500
$0
ati61' a"2a°` o-ti61' 6? d? o-ti61' 62a°` o-ti61' 62o-°` ati61' •s°
oti oti o'' o° o° o\ tib ti titi titi So-
,yo
Source:CoStar,Johnson Economics
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Figure 6.Annual Rent Growth Rate,Lake Oswego(2000-2023)
Effective Rent % Growth/Yr
16%
12%
8%
4%
0%
-4% —
-8%
0.0) 00, a'' o-') o-. o-0) o-50'5O' o-') o-. o-� o-50'50' o-) o-. o-� o-50'50' �°
otio� o,, o0, o`' °o016b ti,oo �° titititi �0, ti`' do �� ON'
o �° �ti �ti �o
yo yo yo ,yo ,yo ,yo ,yo yo yo ,yo yo ,yo ,yo yo yo yo yo o ON', yo yo ti'
Source:CoStar,Johnson Economics
Affordability: Figure 7 shows the percentage of household income spent on gross rent'for rental
households. Roughly half of renter households in Lake Oswego spend more than 30%of their income on
rent—meaning that they are housing cost burdened. Further, an estimated 29%of renter households are
spending 50%or more of their income on housing and are considered severely housing cost burdened.
Figure 7.Percentage of Household Income Spent on Gross Rent,Lake Oswego Renter Households
35%
30% 29%
25%
25% 22%
0
v 20%
15% 14%
46 10% 7%
5% 3%
0%
o\o �oo\a ti�\o ��\o �oo\° ore
t- ,o �o o �o �
°o
%of Income to Gross Rent
Sources: US Census,JOHNSON ECONOMICS
Census Table: B25070(2021 ACS 5-yr Estimates)
1 The Census defines Gross Rent as"the contract rent plus the estimated average monthly cost of utilities(electricity,gas,and water and sewer)
and fuels(oil,coal,kerosene,wood,etc.)if these are paid by the renter(or paid for the renter by someone else)."Housing costs for homeowners
include mortgage,property taxes,insurance,utilities and condo or HOA dues.
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SOCIO-ECONOMIC AND DEMOGRAPHIC TRENDS
AFFECTING HOUSING NEEDS
The following table (Figure 8) presents a profile of City of Lake Oswego demographics from the 2000 and
2010 Census. It also reflects the estimated population of this area as of 2023 from PSU estimates,
forecasted forward to 2023 using the estimated growth rate between 2010 and 2022.
• Lake Oswego is a City of over 41,500 people located in Clackamas County in the southern-central
area of the Portland metropolitan region.
• Based on estimated population, Lake Oswego is the 13th largest city in the state by population,
similar in size to Oregon City regionally, or Keizer and Grants Pass statewide. Lake Oswego has
about 1.5 times the population of neighboring West Linn or Tualatin, and about 75%of the
population of Tigard.
• Lake Oswego has experienced modest growth, growing roughly 18%since 2000, or less than 1%
per year. In contrast, Clackamas County and the state experienced population growth of 26%
and 25% respectively during the same period. (US Census and PSU Population Research Center)
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Figure 8.Lake Oswego Population,Households,and Income
POPULATION, HOUSEHOLDS, FAMILIES,AND YEAR-ROUND HOUSING UNITS
2000 2010 Growth 2023 Growth
(Census) (Census) 00-10 (PSU) 10-23
Population' 35,278 36,619 4% 41,550 13%
Households2 14,824 15,893 7% 17,481 10%
Fa mil i es3 9,775 10,079 3% 11,842 17%
Housing Units4 15,668 16,995 8% 18,345 8%
Group Quarters Populations 163 222 36% 329 48%
Household Size(non-group) 2.37 2.29 -3% 2.36 3%
Avg.Family Size 2.93 2.88 -2% 2.97 3%
PER CAPITA AND MEDIAN HOUSEHOLD INCOME
2000 2010 Growth 2023 Growth
(Census) (Census) 00-10 (Proj.) 10-23
Per Capita ($) $42,166 $53,652 27% $74,600 39%
Median HH($) $71,597 $84,186 18% $123,300 46%
SOURCE:Census,Metro Consolidated Forecast,PSU Population Research Center,and Johnson Economics
Census Tables: DP-1(2000,2010);DP-3(2000);51901;519301
1 From Census,PSU Population Research Center,growth rate 2010-2022 extended to 2023
2 2023 Households=(2023 population-Group Quarters Population)/2023 HH Size
3 Ratio of 2023 Families to total HH is based on 2021 ACS 5-year Estimates
4 2023 housing units are the'20 Census total plus new units permitted from'20 through'22(source: Census,City)
5 2023 Group Quarters Population based on 5-year ACSestimates 2017-2021
Lake Oswego was home to an estimated 17,500 households in 2023, an increase of over 2,650
households since 2000.The percentage of families has increased slightly from 66%of all households in
2000 to 68% in 2023.The city has a similar share of family households to Clackamas County (69%) but
higher than the state (63%). Average household size is estimated to have remained fairly stable during
this period.
Lake Oswego's estimated average household size is 2.4 persons.This is lower than the Clackamas County
average of 2.6 and similar to the statewide average of 2.44. Figure 9 shows the rental/ownership split by
household size in Lake Oswego.
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Figure 9.Household Size in Lake Oswego
7-or-more �� Renter
6 person 1% Owner
2%
5-person 3%
N 4%
v 4-person 11 ° a 181
x° 3-person 11/ °
19/
2-person 35% °
38/
1-person 40%
20%
0% 5% 10% 15% 20% 25% 30% 35% 40%
Share of Households
Family Households
As of the 2021 ACS, 68%of Lake Oswego households were family households, up from 63.4%of
households in 2010.The total number of family households in Lake Oswego is estimated to have grown
by over 2,060 since 2000.The Census defines family households as two or more persons, related by
marriage, birth or adoption and living together. In 2023,family households in Lake Oswego have an
estimated average size of 2.97 people.
Group Quarters Population
As of the 2020 Census,the City of Lake Oswego had an estimated group quarters population of 0.8%of
the total population, or 329 persons. Group quarters include such shared housing situations as nursing
homes, prisons, dorms, group residences, military housing, or shelters. For the purposes of this analysis,
these residents are removed from the estimated population total, before determining the number of
other types of housing that are needed for non-group households. In Lake Oswego, nearly 90%of the
group quarters population is found in assisted living facilities.
Age
Figure 10 shows the share of the population falling in different age cohorts between the 2000 Census
and the most recent 5-year American Community Survey estimates.There is a general trend for middle
age and young cohorts to fall as share of total population, while older cohorts have grown in share.This
is in keeping with the national trend caused by the aging of the Baby Boom generation. Overall, Lake
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Oswego has an older population than the county, with a similar share of children, but a smaller share of
those aged 25 to 44 years.The cohorts which grew the most in share during this period were those aged
55 to 74 years. Still, an estimated 79%of the population is under 65 years of age. In the 2021 ACS,the
local median age was an estimated 46 years, compared to 40 years in Oregon, and 39 years nationally.
Figure 10.Age Cohort Trends,2000-2021
25%
Lake Oswego(2000)
o N Lake Oswego(2021)
csi
20% o 0
—1 ti * * Clack.Co.(2021)
15% ti . o v
m
I
N c o
N r
o rl o `""� o
O o r O
10% Ol
so o 0
V u1
5% v
o N N
c-I
0%
a
J
aes ,co ,�o �o �o �o ,co �o 9)
SOURCE:US Census,JOHNSON ECONOMICS LLC;Census Tables:QT-P1(2000);S0101(2021 ACS 5-yr Estimates)
The cohorts which grew the most in share during this period were those aged 55 to 74 years. Still, an
estimated 79%of the population is under 65 years of age. In the 2021 ACS, the local median age was an
estimated 46 years, compared to 40 years in Oregon, and 39 years nationally.
Figure 11 presents the share of households with children, and the share of population over 65 years for
comparison. Compared to state and national averages, Lake Oswego has a similar share of households
with children. However, at 21%,the share of population over 65 is higher than the state and national
figures.
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Figure 11.Share of Households with Children/Population over 65 Years(Lake Oswego)
Share of Households with Children Share of Population Over 65 Years
40% 40%
31% 31%
30% 28% 30%
21%
20% 20% 18% a
16/0
10% 10%
0% 0%
Lake Oswego Oregon USA Lake Oswego Oregon USA
SOURCE:US Census,JOHNSON ECONOMICS LLC;Census Tables:B11005;S0101(2021 ACS 5-yr Estimates)
Diversity Trends
Figure 12 presents the distribution of Lake Oswego's population by race and Hispanic ethnicity.The
community grew more diverse between the 2010 and 2020 Census,with the population's white (non-
Hispanic)share falling from 90%to 80%.The Asian population makes up 8%of the population, and the
Hispanic or Latino population makes up 5%of residents. 9%of residents identify as two or more races.
Figure 12.Racial and Ethnic Diversity,2010-2020(Lake Oswego)
100% o Share of Population by Race
o Lake Oswego(2010)
oo
80% •Lake Oswego(2020)
60% •Clackamas Co.
40% Oregon
20% c °
o 000 o Lil
o o
0% ME _■
lllll,= J
N C -O N C N 2 o
m c > rO C 0 O c
'.‹-C
f6 z Q CO c
C roce
°1 J °1
Uro Q U m N N O 'FL', i
O U
H
O p Ii
E 1—
cn 2
SOURCE:US Census,JOHNSON ECONOMICS LLC;Census Tables:P1,P2(2010,2020)
In comparison, the share of the population identifying as white is also 80% in Clackamas County, and
75%statewide.The share of Lake Oswego's population identifying as Hispanic or Latino is 5%of the
population, indicating over 2,100 people as of the 2020 Census.This is lower than the 14%share
statewide.
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Figure 13.Average Number of Persons per Household by Racial and Ethnic Category(Oregon)
Average Household Size by Race& Ethnicity(Oregon)
All Households 2.5
White alone 2.4
Black or African American alone 2.5
American Indian and Alaska Native alone 2.8
Asian alone 2.8
Native Hawaiian and Pacific Islander 3.5
Hispanic or Latino 3.7
Some Other Race alone 4.0
Two or more races: 2.7
0.0 1.0 2.0 3.0 4.0 5.0
Avg.Number of Persons per Household
SOURCE:US Census,JOHNSON ECONOMICS LLC;Census Tables:P17A-H,(State of Oregon,2020)
*This data is presented on a statewide basis using the most recent Census data available(2010). The data for the Lake Oswego
or Clackamas County geographies feature unusually large margins of error due to the small sample size.
As shown in Figure 13, minority households tend to have a larger average household size than the
average of all households. (This figure presents statewide data due to the high margin of error for local
data in this data set.) Households identifying as "white alone" have the lowest average household size
(2.4 persons), while all other racial and ethnic categories have a larger estimated average household size.
Some of the non-white categories, such as black households and those of two or more races, are still
similar in average size (2.5 and 2.7 persons, respectively).Those with the largest estimated households
are Latinos, Pacific Islanders, and those identifying as "some other race."
Larger average household size indicates a need for units with more bedrooms on average among many
minority households. Each household has its own housing needs in terms of the number of bedrooms
and other factors, based on the specific makeup of each family. Based on voluntary guidelines provided
by HUD for public housing programs, households of between 2 persons generally need a one-bedroom
unit, households with 3 persons might need two bedrooms, and those with 4 persons might need three
bedrooms. Larger households may need four or more bedrooms, which are typically found in single
detached homes.
Based on statewide data, many racial and ethnic minorities are currently less likely to own the homes
they occupy(Figure 14)—meaning that they tend to occupy rental units.These communities face
systemic obstacles to home ownership, including lower generational wealth, less access to capital and
financing, and a history of discrimination in lending and geography(e.g., redlining). While the country
and state try to address explicit discrimination through the law, the legacy of these barriers continues to
hamper home ownership for many minority households. Going forward, many communities would
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benefit from more entry-level homebuying opportunities for these households, as well as additional
rental housing for those who are still unready or unable to buy a home.
Figure 14.Home Ownership Rate by Racial and Ethnic Category(Oregon)
Owner-Occupied Households by Race& Ethnicity(Oregon)
All Households 63%
White alone 65%
Black or African American alone 36%
American Indian and Alaska Native alone 48%
Asian alone 63%
Native Hawaiian and Pacific Islander 32%
Hispanic or Latino 45%
Some Other Race alone 43%
Two or more races: 50%
0% 20% 40% 60% 80% 100%
Ownership Rate
SOURCE:US Census,JOHNSON ECONOMICS LLC;Census Tables:B25003A-H,(State of Oregon,2021 ACS 5-year)
*This data is presented on a statewide basis using the most recent Census data available(2020). The data for the Lake Oswego
or Clackamas County geographies feature larger margins of error due to small sample size in some of the racial categories.
Populations from some racial and ethnic minority groups also have lower average incomes and are more
likely to have income below the official poverty level when compared to the total population. Such
income levels are correlated with a greater share of renter households and impact the types of housing
these populations consume, as discussed in further detail below.
People with a Disability
An estimated 8%of the population of Lake Oswego, or 3,140 people, report having some form of
disability.This is lower than the statewide rate of 14%and the Clackamas County rate of 12%of people
with a disability. (The Census reports these statistics for the "non-institutionalized population.")
Figure 15 presents Census estimates of the types of disability reported among Lake Oswego residents.
Any type of disability impacts the type of housing that may be appropriate for a resident, but those with
the greatest impact on needed unit type are generally an ambulatory, self-care, or independent living
disability.Those with an ambulatory disability often need units with expanded access for a wheelchair,
walker, or scooter.Those with self-care or independent living disabilities may require additional safety
precautions around the home to protect a resident who cannot always be directly monitored.
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Figure 15.Lake Oswego Share of the Population with Disability,By Type
Share of Population
Population with a disability 7.8%
Hearing difficulty 2.4%
Vision difficulty 1.7%
Cognitive difficulty 2.7%
Ambulatory difficulty 2.9%
Self-care difficulty 1.1%
Independent living difficulty 2.3%
0% 2% 4% 6% 8% 10%
SOURCE:US Census,JOHNSON ECONOMICS LLC;Census Tables:DP02,(2020 ACS 5-year)
Figure 16.Lake Oswego Population with a Disability,byAge
Share of Population with Disability by Age
Total population 7.8%
Under 18 years . 2.0%
18 to 64 years 5.8%
65 years and over 19.5%
0% 5% 10% 15% 20% 25%
SOURCE:US Census,JOHNSON ECONOMICS LLC;Census Tables:DP02,(2020 ACS 5-year)
Older residents are more likely to report a disability, including nearly 20%of those over 65 years. Of
those aged 18 to 64 years, 6%of the local population reports a disability, and 2%of children. Because
Census data tends to undercount the homeless and other vulnerable populations,there are likely more
disabled residents in Lake Oswego than reflected in these data.
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Income Trends
As shown in Figure 17, Lake Oswego's estimated median household income was$123,000 in 2023.This is
nearly 40% higher than the Clackamas County median of$88,500, and 75% higher than the statewide
median of$70,000. Lake Oswego's per capita income is roughly$75,000. Median income has grown an
estimated 46% between 2010 and 2023, in real dollars. Inflation was an estimated 34%over this period,
so the local median income has well exceeded inflation.This is not the case in many regions and
nationally,where income growth has not kept pace with inflation.
Figure 17.Income Trends,2000-2023(Lake Oswego)
PER CAPITA AND MEDIAN HOUSEHOLD INCOME
2000 2010 Growth 2023 Growth
(Census) (Census) 00-10 (Proj.) 10-23
Per Capita ($) $42,166 $53,652 27% $74,600 39%
Median HH($) $71,597 $84,186 18% $123,300 46%
SOURCE:Census,Metro Consolidated Forecast,PSU Population Research Center,and Johnson Economics
Census Tables: DP-1(2000,2010);DP-3(2000);S1901;S19301
Figure 18.Household Income Cohorts,2021(Lake Oswego)
Household Income Groups
$200,000 or more 27%
$150,000 to$199,999 12%
$100,000 to$149,999 20%
$75,000 to$99,999 11%
$50,000 to$74,999 11%
$35,000 to$49,999 6%
$25,000 to$34,999 4%
$15,000 to$24,999 4%
$10,000 to$14,999 2%
Less than$10,000 3%
0% 5% 10% 15% 20% 25% 30%
SOURCE: US Census,Census Tables:S1901(2021 ACS 5-yr Est.)
Figure 18 presents the estimated distribution of households by income as of 2021.The largest income
cohorts are those households earning between $100k and $200k per year(32%), followed by households
earning over$200k(27%). Approximately 41%of households earn less than $100,000. Roughly 19%of
households earn less than $50k per year.
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Poverty
According to the US Census,the official poverty rate in Lake Oswego is an estimated 4%over the most
recent period reported (2021 5-year estimates).z This is roughly 1,700 individuals in Lake Oswego. In
comparison, the official poverty rate in Clackamas County is 9%, and at the state level is 17%. As shown
in Figure 19, in the 2017-21 period:
• The Lake Oswego poverty rate is low among all groups, but highest among those 65 years and
older at 5%.The rate is 4%among those 18 to 64 years of age.The estimated rate is lowest for
children at 3%.
• For those without a high school diploma,the poverty rate is 11%.
• Among those who are employed the poverty rate is 2%,while it is 7%for those who are
unemployed.
• Information on affordable housing is presented in Section II F of this report.
Figure 19.Poverty Status by Category(Lake Oswego)
Poverty Level of Subgroups
Under 18 years 3%
18 to 64 years 4%
65 years and over 5%
Employed 2%
Unemployed 7%
Less than high school 11%
High school 10%
Some college, associate's 7%
Bachelor's degree or higher 3%
0% 5% 10% 15% 20%
SOURCE: US Census;Census Tables: S1701(2021 ACS 5-yr Est.)
2 Census Tables:S1701(2018 ACS 5-yr Estimates);Methodology
The Census Bureau uses a set of income thresholds that vary by family size and composition to determine who is in poverty.There are 48 separate
income thresholds set based on the possible combinations of household composition.
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People Experiencing Homelessness
The Census makes a multi-faceted effort to include the unhoused population in the total Decennial
Census count, by attempting to enumerate these individuals at service providers, and in transitory
locations such as RV parks or campgrounds, as of the official Census data (4/1/20). However, it is difficult
to make an accurate count of this population, and it is generally presumed that the unhoused are
undercounted in the Census.
The most recent(January 2023) Point-in-Time count of people experiencing homelessness and
households experiencing homelessness in Clackamas County'found 410 unhoused individuals on the
streets, in shelters, or other temporary and/or precarious housing.This is a 31%decrease from the 597
individuals counted in 2022, which was likewise a decline from the prior count.The estimated 410
unhoused individuals represent 0.1%of the county's total estimated population in 2023.
A detailed breakdown of the data from the 2023 count is not yet available. The following are some
demographic indicators from the 2022 count:
• An estimated 45%of individuals were in some sort of temporary shelter, while 55%were
unsheltered.
• Of those indicating a gender, 60%of those counted identified as men,40%women.
• Five percent of those counted were Hispanic or Latino compared to 9.5% in the general population.
• Approximately 51%,were counted as "chronically homeless".4
While the Point-in-Time count is one of the few systematized efforts to count people experiencing
homelessness across the country in a regular, structured way, it is widely thought to undercount the
population of unhoused individuals and households. People who are doubled up, couch surfing, or
experiencing domestic violence may not always be accurately counted. In addition to the impossibility of
finding all unsheltered individuals experiencing homelessness,the count is conducted in late January,
when homeless counts are likely near their lowest of the year due to inclement weather. It also relies on
self-reporting.
Data on unhoused school-aged children is tracked in keeping with the McKinney-Vento Act.The
Department of Education reports that in the 2021/22 school year, there were 41 enrolled students
experiencing homelessness in Lake Oswego School District, and an estimated 304 children between the
ages of 5 and 17 living in poverty.
The persistence of people experiencing homelessness speaks to the need for continuing to build a full
spectrum of services and housing types to shelter this population, from temporary shelter to subsidized
affordable housing.An analysis of the ability of current and projected housing supply to meet the needs
of low-income people and the potential shortfall is included in the following sections of this report.
3 Figures are for the entire County
4 HUD defines "chronically homeless" as an individual with a disability as defined by the McKinney-Vento Assistance Act, who has been in
uninhabitable conditions for more than 12 mo.or on four separate occasions in the last three years;or has been in institutional care for less than
90 days;or a family with an adult head of household who meets this definition.
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Households Needing Publicly Assisted Housing
Oregon Housing and Community Services (OHCS)tracks three currently operating subsidized affordable
housing properties in Lake Oswego,with a total of 76 units.These are properties that are funded
through HUD programs,tax credits and other programs which guarantee subsidized rents for qualified
households.All of these units, save one, are offered for elderly residents.
The Marylhurst Commons, currently under development, is planned to offer 100 affordable units for
families when constructed. Upon completion in 2024,the total 176 subsidized units in Lake Oswego will
represent 1%of the local housing stock. An additional 8 units of 80%AMI housing are also in the pipeline
as part of the North Anchor project.
The Housing Authority of Clackamas County administers over 1,600 Section 8 housing choice vouchers
that allow low-income participants to find rental units anywhere in the county. Under this program,the
renters can find participating landlords and the voucher helps to subsidize the cost of a market-rate
rental unit.The unit does not have to be in a property dedicated to subsidized affordable housing but
can be in any rental property.
The high share of renters still paying over 30%of their income towards housing costs indicates that there
is an ongoing need for rental units at the lowest price points.
Agricultural Workers
Lake Oswego is not currently home to properties dedicated to agricultural workers.This population may
also be served by other available affordable units.
Veterans
This group is called out as a population with specific needs and which is often under-represented in
planning for future needed housing. In general,veterans often may have physical or mental health
disabilities resulting from injuries or stress experienced during their service.They also frequently have
fixed, lower incomes and need access to services provided by the US Veterans Administration or other
service providers.As a result,they share many of the same unmet needs described here for people with
disabilities, low-income households, and in some cases senior residents.
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Figure 20. Veterans in Lake Oswego
Individuals
Share of Adult
Population
Total Veterans 1,801 5.7%
Period of Service Share of Veterans
Gulf War(9/2001 or later)veterans 344 19.1%
Gulf War(1990 to 8/2001)veterans 335 18.6%
Vietnam era veterans 634 35.2%
Korean War veterans 140 7.8%
World War II veterans 83 4.6%
Other 265 14.7%
Veteran Age Share of Veterans
18 to 34 years 107 5.9%
35 to 54 years 335 18.6%
55 to 64 years 232 12.9%
65 to 74 years 474 26.3%
75 years and over 653 36.3%
Veteran Poverty Status 61 3.4%
Veterans with a Disability 375 20.9%
Source:Table S2101,ACS 2021 5-Year,Johnson Economics
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BARRIERS TO DEVELOPMENT OF NEEDED HOUSING
Numerous factors contribute to the availability and/or lack of needed housing in Lake Oswego—market
factors, physical conditions, regulations, public investments, etc. Some of these factors can serve as
barriers to the production of housing that is most needed in the city.To understand the major barriers to
developing needed housing in Lake Oswego,the project team interviewed a number of stakeholders
involved in housing production in the city.These interviews were conducted in September and October
2023 and included market-rate developers and architects with experience in single-family, middle
housing, and multi-family housing production; nonprofit housing providers, including Habitat for
Humanity and Mercy Housing Northwest; and City staff involved in Planning and Redevelopment.
Following are some of the key housing needs that the stakeholders identified as gaps in the market:
• Affordable housing for low-and moderate-income households
• Middle housing (e.g.,townhomes, duplexes, and cottage clusters)
• Housing options for seniors and opportunities for aging in place
• Options for more attainable homeownership (e.g., condos and middle housing)
• Apartments with family-size units (2-3 bedrooms)
• Multi-family housing outside the Town Center
In terms of barriers to meeting these needs, and to housing production more generally, some of the
major themes are summarized below.
• High cost of land in Lake Oswego.The city has very high land values,which translates to high
rental and sale prices, and makes deed-restricted affordable housing especially challenging to
pencil out.
• Few large, developable sites.There is limited land within the City and urban service boundary
to support multi-family housing and other development types that typically rely on larger
parcels of land.The Buildable Lands Inventory prepared as part of the Housing Needs Analysis
also supports this notion—finding a deficit of buildable land to meet future housing needs,
including lands zoned for high-density housing.
• Code barriers.Stakeholders identified a range of barriers to housing development in the Lake
Oswego Community Development Code. Stakeholders expressed that the City's code is
especially challenging to work with compared to some other jurisdictions. The following specific
code barriers were identified:
o Overlay and Design District standards are highly prescriptive,which can add to the cost
of development and limit flexibility. Stakeholders pointed to detailed architectural
standards as being a particular challenge—e.g., requirements for specific siding
materials adding to construction costs.
o Tree protection and tree planting and landscaping standards are also very prescriptive
and can be difficult to meet on constrained sites.
o Open space standards for multi-family housing are considered by stakeholders to be
excessive, limit the available space on a site for housing units, and don't necessarily lead
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to great outcomes.They note that open spaces can be smaller and more concentrated
while still providing appealing amenities for residents.
o Setbacks and other standards limit middle housing infill opportunities. Stakeholders
shared that siting standards can make it difficult for middle housing such as duplexes
and townhomes to fit on existing lots.
• Process barriers. Stakeholders also noted that Lake Oswego's development review and
permitting processes can be lengthy and contribute to housing costs.A few stakeholders noted
that this limits the number of developers that are interested in building in the city. In particular:
o The design review process in Design Districts adds time and cost.
o Building permit review can also be slow.
o Due to prescriptive standards, applicants often need to apply for multiple variances,
which lengthens the process and adds uncertainty.
o Public improvements (e.g., road improvements and utilities) can be very costly.
• Neighbor opposition. A few stakeholders also noted that neighbor opposition to affordable or
higher-density housing can drag out the process and add to costs.
• Market trends.At the time of this analysis,there are some headwinds to development of new
housing regionally and nationwide.These include inflation in the cost of building inputs such as
labor, materials, and land. Increasing interest rates in recent years that haven't been offset by a
proportionate fall in property prices are another major impediment.
A focus of the Housing Production Strategy will be to identify tools and strategies to remove or reduce
these barriers or help housing producers overcome them.
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ADOPTED MEASURES
The City of Lake Oswego already implements a variety of measures intended to enable or facilitate the
production of needed housing.The City submitted a "Pre-HPS Survey"to DLCD in 2022, as required by
former subsection 2 of ORS 456.586, which includes an exhaustive list of the housing measures the City
has adopted and implemented. In combination with the other findings in the Contextualized Housing
Needs report,this list will help the City and community understand where there are gaps in the City's
approach toward meeting its housing needs.
Below is a summary of the key housing measures adopted by the City, organized into the categories
defined by DLCD.The full list of adopted measures will be included as an appendix to the HPS Report.
Zoning Strategies
• Height/density bonus for affordable developments—The City allows a limited height or density
bonus for affordable developments in the West Lake Grove Design District(WLG-OC) and R-DD
zones.
• Increased code flexibility for accessory dwelling units—The City removed occupancy
requirements for ADUs and expanded maximum ADU size to 1,000 sq.ft.for internal remodels
of primary dwellings.
• Short-term rental regulations—The City requires that short-term rental is a home occupation
where a resident lives on the lot. Short-term rentals are not permitted in ADUs where the ADU
received a system development charge (SDC)waiver.
• Mandatory affordable housing—City requires affordable housing(affordable to those earning
80%or less of AMI) on a portion of the Marylhurst Special District and a portion of the West
Lake Grove Design District(WLG-OC zone)where multifamily use is allowed.
• Increased density near transit stations—The mixed-use zoning that is in place near transit—
Metro 'town centers'—allows residential use and does not limit density. These areas have
developed/redeveloped with high-density(50-100 units per acre) development in recent years.
• Lot coverage bonus for housing—The City allows a limited lot coverage bonus within the Lake
Grove Village Center Overlay (LGVCO) for developments where housing is provided.
Reducing Regulatory Impediments
• Removed parking mandates near transit— In compliance with the state's Climate-Friendly and
Equitable Communities rules, the City does not apply minimum parking requirements within
1/2-mile of priority transit, which includes the entire Downtown Town Center, and will remove
minimum parking requirements in the City's other climate-friendly area (Lake Grove Village
Center)to comply with CFEC rules.
• Expedites permitting for affordable housing—The City has a practice of expediting the
permitting process for deed-restricted affordable units.
Financial Incentives
• Waives fees for affordable housing and ADUs—The City has adopted regulations to waive SDCs
and development review fees for income restricted affordable housing(80%or less of AMI) and
for accessory dwelling units.The City has exempted $388,073 in SDCs for ADUs since 2019.
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Financial Resources
• Uses urban renewal funds to support housing—The Lake Oswego Redevelopment Agency
underwrote some of the costs in the North Anchor development downtown to ensure the
provision of deed-restricted affordable housing units using funds from the City's urban renewal
program.
Land Acquisition, Lease, and Partnerships
• Surplus City-owned land/ land banking for affordable housing—The City does this with vacant
or underutilized sites, most recently the 1.4-acre construction staging property for the Boones
Ferry Road Improvement Project. The site will be used to create 50 deed-restricted affordable
housing units, using Metro Affordable Housing Bond funds.
• Public-private partnerships—The City has worked with organizations such as Habitat for
Humanity and Mercy Housing Northwest to produce affordable housing units.
• Conversion of underperforming commercial assets—The Lake Oswego Redevelopment Agency
acquired the North Anchor site to convert this commercial property into a mixed-use
development with affordable and market-rate housing.
• Utilizing surplus land owned by faith-based organization for housing—The City worked
collaboratively with the Sisters of Holy Names of Jesus and Mary (Sisters)when they were
considering reuse of the former Marylhurst University Campus. Ultimately, the Sisters entered
into an agreement with Mercy Housing NW for construction of 100 units of affordable family
housing.
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APPENDIX B : PUBLIC
ENGAGEMENT SUMMARY
Lake Oswego Housing Production Strategy I June 14, 2024 (DRAFT)
Introduction
This memorandum summarizes public engagement activities that informed Lake Owego's Housing
Production Strategy(HPS).The summary includes the following:
• Summary of engagement during both Housing Needs Analysis and Housing Production
Strategy phases
• What activities took place
• Who participated (which stakeholders and other groups)
• Summary of community and stakeholder input
• How community and stakeholder input influenced the HPS
• Recommendations for future engagement—evaluation of how to improve housing
engagement practices going forward
Housing Needs Analysis Engagement
Winter 2022—Fall 2023
The first phase of this project was the Housing Needs Analysis (HNA), which included preparation of a
Housing Capacity Analysis (HCA) and Buildable Lands Inventory (BLI).The City provided multiple avenues
for engagement activities and events during this phase, as described below.
HNA Public Engagement Opportunities
• Online Open House/Virtual Neighborhood Forum.The City created an Online Open House to
(1) provide a summary of the project's draft findings to date, and (2) ask for feedback on those
materials, as well as participants' opinions and priorities related to housing in Lake Oswego.The
Online Open House was made available for public input from March 31 through April 24, 2023.1
• Neighborhood Forum.The City of Lake Oswego held a virtual neighborhood forum on April 6,
2023 at 5pm.2
• Housing Production Strategy Task Force.The City appointed a Task Force that included a variety
of housing stakeholders, including realtors, housing development industry members,
homeowners, renters, and representatives of the City's Planning Commission, City Council, 50+
For detailed survey results,see
https://www.ci.oswego.or.us/WebLink/DocView.aspx?id=8&page=&repo=CityOfLakeOswego.
2 For a meeting summary,see
https://www.ci.oswego.or.us/WebLink/DocView.aspx?id=36&page=&repo=CityOfLakeOswego.
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Advisory Board, and Transportation Advisory Board, among others.The Task Force discussed the
following topics at their first three meetings:
o December 16, 2022—Project overview and work plan.
o March 24, 2023—Reviewed initial housing needs and BLI findings.
o June 23, 2023—Reviewed summary of engagement; reviewed updates to the BLI and
HCA; introduced the HPS.
• Planning Commission.The Lake Oswego Planning Commission discussed the HNA at work
sessions on January 23 and April 10, 2023.The Planning Commission recommended approval of
the HNA at a public hearing on August 28, 2023.
• City Council.The Lake Oswego City Council discussed the HNA at study sessions on February 21
and April 18, 2023.The City Council recommended approval of the HNA at a public hearing on
October 3, and approved the findings on October 17, 2023.The HNA was adopted via Ordinance
2934,which became effective on November 16, 2023.
HNA Key Themes and Topics of Discussion
Feedback from the HNA activities was incorporated into the HNA documents and also informed the later
HPS work—especially the City's focus on affordable housing strategies. Key themes related to housing
needs and housing production are summarized below.
AFFORDABLE HOUSING
As with many other communities, housing affordability is a key concern in Lake Oswego. "Housing
Affordability" and "Availability of housing for lower incomes" were the two greatest needs identified in
the Online Open House survey. In a separate survey question, "Housing specifically for people with lower
incomes" was the second highest choice for desired housing types. Other opinions heard include:
• Some of the more affordable housing today are older homes that might be considered
redevelopable by the analysis—redevelopment would likely result in more expensive homes in
those locations in comparison to some of the existing homes in those areas.
• The income breakdowns shown in the draft HNA seemed too focused on higher incomes,with
roughly half of new housing units being affordable to those below the highest income brackets.
• Providing large amounts of new affordable housing is not an appropriate role for the City.
• The market will set housing prices and the government should get out of the way.
When asked whether the City should play a strong role in supporting the development of housing for
lower income residents, survey respondents generally said yes.The community provided a variety of
opinions on the topic of what that role should entail, including:
• Multi-unit housing should be concentrated in specific areas, away from single-unit housing and
existing neighborhoods.
• Middle housing and multi-unit housing should be integrated into all neighborhoods.
• Entry-level homeownership units are needed.
• Rent control/tax on house flippers/inclusionary zoning is needed.
• Workforce housing is critical. A diverse community is a strong community.
• Government intervention only makes things worse.
• Consider tree canopy.
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• Preserving neighborhood character should be the top priority.
• Large single detached homes are being built;this is problematic.
• There are disparate impacts of development and construction across the city.
• The City has taken strides toward more affordable housing recently—keep it up.
AGING IN PLACE
"Availability of housing that supports aging in place" was identified as a key need for Lake Oswego in the
online survey.This generally means housing that has accessibility features for individuals with impaired
mobility, and that is located adjacent to amenities that support a high quality of life and/or provide
needed services.The affordability of housing is also a consideration, as older people who may be on
fixed incomes may find it more difficult to afford to live in the community.
MIDDLE HOUSING
Cottage homes, also known as "cottage cluster" housing, were the most frequently chosen housing type
that respondents would like to see more of in Lake Oswego.
Housing Production Strategy Engagement
Fall 2023—Fall 2024
In fall 2023,the City of Lake Oswego shifted its focus to the HPS process. Similar to the HNA phase,the
City provided multiple avenues for engagement activities and events for the HPS, as described below.
HPS Public Engagement Opportunities
• Housing Production Strategy Task Force.The HPS Task Force met five more times between fall
2023 and summer 2024.The Task Force was instrumental in shaping the strategies and
approaches that are included in the HPS.The Task Force discussed the following topics at these
five meetings:
o October 6, 2023—Reviewed findings from the Contextualized Housing Needs
Assessment and stakeholder interviews; reviewed existing housing measures and
provided input on an initial list of potential housing strategies.
o December 5, 2023—Engaged in group discussions focused on identifying housing
production strategies that could best address high-priority housing needs.
o February 16 and March 1, 2024—Discussed initial recommendations for strategies to
include in the HPS.At the March 1 meeting,the Task Force voted on which strategies to
recommend to the Planning Commission and City Council for inclusion.
o June 21, 2024—Reviewed the Draft HPS Report.
• Stakeholder Interviews.The project team interviewed stakeholders involved in various aspects
of housing production in September and October 2023. See below for the list of stakeholders
and key themes from those interviews.
• Community Forum. On March 14, 2024 at 5 PM,the City hosted a virtual community forum
using the Zoom videoconference platform to review the strategies being considered for the HPS.
A total of 15 attendees participated in the forum.The forum used live polling in Zoom to get
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feedback in real-time to supplement the discussion to indicate their level of support. See below
for a summary of polling results.'
• Online Survey.The City hosted an online survey from March 13—31, 2024 as a companion to
the virtual Community Forum. A total of 134 participants completed the survey.The survey
asked participants to indicate their level of support for various housing strategies being
considered for the HPS. Respondents provided general support for all strategies that ended up in
the final HPS. See below for a summary of survey results.4
• Presentations to Boards and Commissions. City staff presented to the following groups:
Diversity, Equity and Inclusion Advisory Board; 50+Advisory Board; Chamber of Commerce
Government Affairs Committee; November 2023 Mayor's Roundtable event; Fall 2023 Kruse Way
Economic Forum.
• Planning Commission.The Lake Oswego Planning Commission discussed the HPS at work
sessions on November 13, 2023 and June 24, 2024, as well as a joint study session with the City
Council on April 2, 2024. See below for a summary of results from straw polls taken at the April 2
joint study session.The Planning Commission recommended approval of the HPS at a public
hearing on September 9, 2024.
• City Council. In addition to the joint study session noted above,the Lake Oswego City Council
discussed the HPS at study sessions on November 7, 2023 and July 16, 2024.The City Council
held public hearings for adoption of the HPS on October 15 and November 5, 2024.The HPS was
adopted via Ordinance
Stakeholder Interviews
Stakeholders interviewed in fall 2023 included the following:
• Market-rate developers and architects—These included local professionals involved in
development of multifamily housing, middle housing, and single-family housing.
o Koble Creative
o Shorenstein Properties
o Keith Abel Design LLC
o Blue Palouse Properties
• Non-profit housing providers—These providers represented both the development community
and the lower-income households that may be served by their housing projects.
o Habitat for Humanity
o Mercy Housing Northwest
• City of Lake Oswego staff
o Community Development Director
o Long Range Planning Manager
o Redevelopment Manager
3 For detailed polling results,see
https://www.ci.oswego.or.us/WebLink/DocView.aspx?id=17&page=&repo=CityOfLakeOswego.
For detailed survey results,see
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The project team asked stakeholders about the city's greatest housing needs, barriers to development of
needed housing, gaps in affordable housing, and tools and strategies that would be effective in
producing needed housing. Key themes from the stakeholder's responses are summarized below.
KEY HOUSING NEEDS AND GAPS IN THE MARKET
• Affordable housing for low-and moderate-income households
• Middle housing (e.g., townhomes, duplexes, cottage clusters)
• Opportunities for aging in place
• Options for more attainable homeownership
(e.g., condos and middle housing)
• Apartments with family-size units (2-3 bedrooms)
• Multi-family housing outside the Town Center
MAJOR HOUSING BARRIERS IN LAKE OSWEGO
• High cost of land in Lake Oswego
• Few large sites to support multi-family housing
• Neighbor opposition to affordable or higher-density housing can drag out the process, adding to
costs
• Code barriers:
o Design overlay standards are highly prescriptive—can add to cost, limit flexibility
o Tree protection/tree planting and landscaping standards
o Open space standards for multi-family housing
o Setbacks and other standards limit middle housing feasibility
• Process barriers:
o Design review process in design districts adds time and cost
o Building permit review can also be slow
o Often need multiple variances, lengthens process and adds uncertainty
• Public improvements (roads, utilities) can be very costly
POTENTIALLY EFFECTIVE STRATEGIES
• Density bonuses for providing public benefits, such as affordable housing or developing near
transit
• Code amendments to remove code barriers
• More flexibility for middle housing
• Streamline permitting
• Simplify design standards and guidelines
• Pre-approved plans
• Property tax abatements for affordable housing
• SDC waivers
• Tax Increment Financing to support affordable housing
• Land banking
• Partnerships with nonprofits and faith organizations
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STAKEHOLDER IMPACT
The feedback received from stakeholders greatly influenced the strategies included in the Housing
Production Strategy. For example,the code topics addressed in the Code Audit and Amendments
strategy were refined to address the barriers identified by housing developers and producers.Also,
incentives and other strategies that support affordable housing development (tax abatements,TIF
funding, partnerships) were shaped by these interviews.
Results of Survey and Polling
In March and April 2024,the City used various survey and polling tools to seek input on the strategies
under consideration for the HPS.This included the online survey, Zoom polling at the virtual Community
Forum, and straw polls taken at the March 1 HPS Task Force meeting and April 2 joint study session with
the Planning Commission and City Council. Input from these groups was based on information provided
in the Initial Strategy Recommendations Memo, and the results of the polls informed the strategies that
were eventually recommended for inclusion in the Draft HPS. A general summary of the results and
detailed online survey results are both included, below.
Strate Survey+ Task City PC Notes/ Follow-up
gy Forum Force Council Actions
Pro-Housing Policies [GENERAL] Support Support - - -
Recommended Strategies
Code Audit and Amendments (Z01) Support Support YES (7:0) YES (3:2) Include all strategies
in Draft HPS.
Property tax exemptions for housing Mild Support
affordable to low-income households Support Two Planning
Commissioners
Public-private partnerships for Support Support expressed concerns
affordable housing (F04) about the pre-
Fair Housing Policy and Education (B14) Support Support approved plan sets
Rezone Land (Z02) Mild Support for ADUs strategy
Support
Evaluate accessible design incentives or Strong I Support
mandates (A23) Support
Use Tax Increment Financing (TIF)to Split Support
support affordable housing
development (D10)
Affordable Housing Preservation Support Support
Inventory(F19)
Modify System Development (SDC)fee Support Support
schedule (CO2)
Pre-Approved Plan Sets for ADUs (A21) Support Support
Remove or Reduce Minimum Parking - -
Requirements (B01)
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Strategies Needing Further Discussion
Zoning Incentives for Affordable Housing Mild Mild NO (1:6) NO (1:4) Do not include in
(A03) Oppose Support Draft HPS.
There was no interest
expressed by the PC
or CC in combining
this with the code
audit strategy; only
strategy opposed by
public.
Construction Excise Tax(CET) (D09) Mild Support NO (0:5) NO (0:7) Do not include in
Support Draft HPS.
Vertical Housing Development Zone Tax Mild Oppose NO (0:7) NO (1:4) Do not include in
Abatement (E03) Support Draft HPS.
Multiple Unit Property Tax Exemption Mild Mild NO (3:4) YES (4:1) Include in Draft HPS,
(MUPTE) (E04) Support Support with criteria that
would only make it
available to housing
with either (1)
accessible design or
(2) units affordable at
80-120%AMI.
Pre-Approved Plan Sets for Middle Mild Mild NO (0:7) NO (0:5) Do not include in
Housing Typologies (A20) Support Support Draft HPS.
HPS Task Force only
recommended this if
paired with an
affordability
requirement.
Contingent Strategies
Housing Trust Funds (D03) - - - - Do not include in
Draft HPS.
Low-Interest Loans/Revolving Loan Fund PC/CC did not
(D13)
express interest in
Community Land Trusts (F03)
these strategies.
Preserving Low-Cost Rental Housing to
Mitigate Displacement (F05)
Not Recommended
Homebuyer Opportunity Limited Tax - - - - Do not include in
Exemption (HOLTE) Draft HPS. PC/CC
were fine with
excluding this from
the Draft HPS.
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HOUSING STRATEGY SURVEY RESULTS
This section provides a summary of results from an online survey hosted by the City of Lake Oswego as
part of its Housing Production Strategy(HPS).The online survey was available from March 13—31, 2024
and asked participants to indicate their level of support for various housing strategies being considered
for the HPS.A total of 134 participants completed the survey, and additional participants responded to
portions of the survey.
Respondents provided a general level of support for all strategies that were included in the draft HPS.
1. Strategy: Update the Community Development Code to remove barriers to
housing production
Conduct a comprehensive review and update of the rules that guide housing development (the
Community Development Code),to identify and remove or revise regulations that may constrain housing
production.This strategy would focus on addressing requirements that overly limit flexibility, add to
housing costs, and/or delay project approvals. Potential focus areas include: removing barriers to
accessory dwelling units, middle housing, and multi-family housing; incentivizing smaller units;
streamlining requirements in design overlay districts; and facilitating housing development in mixed-use
areas.
Housing Need Addressed: General need for increased housing production and housing choices.
Magnitude: MODERATE—Could have a moderate, indirect impact on new housing production.
Value Percent Responses
Strongly Oppose 20.3% 29
Oppose 14.0% 20
Neutral(neither support nor oppose) 14.7% 21
Support 26.6% 38
Strongly Support 24.5% 35
Totals:143
2. Strategy: Property tax exemptions for housing affordable to low-income
households
This strategy exempts property taxes from housing developments that are affordable to low-income
households (those earning less than 60%to 80%of the median family income for the area). By reducing
operating income, property tax exemptions can be a powerful tool to increase the feasibility of
producing low-income housing, and perhaps increase the number of lower cost units that are feasible
within a development.
Housing Need Addressed: Government-subsidized affordable housing for low-income households.
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Magnitude: HIGH—Can have a large impact on making low-income affordable housing more feasible to
develop.
Value Percent Responses
Strongly Oppose 21.7% 31
Oppose 16.8% 24
Neutral{neither support nor oppose} 14.7% 21
ime
Support 23.8% 34
Strongly Support 23.1% 33
Totals:143
3. Strategy: Public-private partnerships for affordable housing
Public-private partnerships are arrangements between public and private entities(such as nonprofit or
for-profit housing developers)to build housing, especially housing affordable to people with lower
incomes or specific needs. Public-private partnerships can bring resources to the table that would
otherwise not be available if each organization were to provide housing on its own.
The City could partner with organizations to support their affordable housing efforts in a variety of ways:
• Acquire land and/or donate city-owned land;
• Provide grants or loans for development or rehabilitation projects;
• Provide direct funding; and/or
• Leverage federal, state, and regional resources.
The City is already pursuing this strategy with several ongoing projects, including partnering with Habitat
for Humanity on a project and also with the Sisters of Holy Names of Jesus and Mary and Mercy Housing
NW in facilitating the Mercy Greenbrae affordable housing development at Marylhurst Commons.
Housing Need Addressed: Government-subsidized affordable housing for low-income households.
Magnitude: HIGH—Partnerships are very often a key component of a city contributing to new housing
production.
Value Percent Responses
Strongly Oppose 15,0% 21
imt
Oppose 11,4% 16
Neutral{neither support nor oppose} 12,9% 18
Support 30.0% 42
Strongly Support 30,7% 43
Totals:140
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4. Strategy: Fair Housing Policy and Education
Amend the Lake Oswego Comprehensive Plan—which guides the long-term development and growth of
the city—to explicitly make Affirmatively Furthering Fair Housing an official City policy. Federal Fair
Housing laws protect individuals in "protected classes"from housing discrimination—in Oregon,
protected classes include race, color, national origin, religion, disability, sex(includes pregnancy), sexual
orientation, gender identity, age, and marital status. Adding this as a policy would demonstrate Lake
Oswego's commitment to reversing discrimination, exclusion, and concentrations of wealth in the city.
The strategy also involves other actions to educate staff and decision makers about fair housing issues,
and to provide fair housing information to residents, property owners, realtors, lenders, and others
involved in real estate transactions.
Housing Need Addressed:This strategy would not directly address identified housing needs in most
cases, but it would help prevent housing discrimination against protected classes.
Magnitude: LOW—Will not directly contribute to housing production but could bolster the City's focus
on equity and affordability in its housing programs and investments.
Value Percent Responses
Strongly Oppose 16.9% 23
Oppose 9,6% 13
Neutral(neither support nor oppose} 17.6% 24
Support 32.4% 44
Strongly Support 23.5% 32
Totals:136
5. Strategy: Rezone selected areas to support residential development
This strategy involves rezoning commercial or other non-residentially zoned properties to allow for
housing development in those areas, especially multi-family housing. It could also involve rezoning
lower-density areas to allow for higher-density housing. Areas to rezone typically would include land that
is close to existing high-density areas and/or existing services, and larger parcels of land.This strategy
addresses the fact that the city faces a shortage of residential land across all zone types to meet long-
term housing needs.
Housing Need Addressed:General need for increased housing production. Could also address the
shortage of higher-density land by rezoning lower-density land.
Magnitude: MODERATE TO HIGH—Might be relatively high given the limited supply and high demand for
buildable residential land in the community.
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Value Percent Responses
Strongly Oppose 23.1% 31
Oppose 16.4% 22
Neutral(neither support nor oppose} 12.7% 17
Support 24.6% 33
Strongly Support 23.1% 31
Totals:134
6. Strategy: Evaluate accessible design incentives or mandates
This strategy aims to increase development of housing that is accessible for seniors and people with
disabilities or mobility challenges through either incentives or requirements to develop this type of
housing. Potential incentives include height or density bonuses and reduced property taxes. Potential
mandates include requiring a certain number of units in a multi-unit development to have enhanced
accessibility.The City would need to further evaluate the feasibility and trade-offs associated with these
programs before implementing a particular action.
Housing Need Addressed: Housing for people with physical disabilities and mobility challenges, including
seniors.
Magnitude: MODERATE—Depending on how the strategy is structured, it could lead to production of a
significant number of new units with accessibility features.
Value Percent Responses
Strongly Oppose 9.6% 13
Oppose 3.7% 5
•
Neutral(neither support nor oppose} 18.5% 25
Support 42.2% 57
Strongly Support 25.9% 35
Totals:135
7. Strategy: Use Tax Increment Financing to support affordable housing
development
Tax increment financing, or TIF, is a way for the City to pay for projects or improvements within a certain
area (an "urban renewal area" or"TIF district"), like building roads, parks, or housing.These projects
make land in the area more valuable, and the City uses the extra revenue it gets from the higher
property taxes to reinvest in development or redevelopment within the area.TIF can be a direct source
of funding for projects that meet public goals such as affordable housing or mixed-use buildings that
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might not otherwise be feasible.The City has been considering expanding the use of urban renewal and
TIF in Lake Oswego—particularly in the Foothills neighborhood—and could make affordable housing a
priority in those efforts.
Housing Need Addressed: Government-subsidized affordable housing for low-income households.
Magnitude: HIGH—TIF funds would enable the City to acquire land, partner with housing providers,
contribute to public improvements, and take other actions that could have a big impact on development
of affordable housing in targeted areas.
Value Percent Responses
Strongly Oppose 25.4% 34
Oppose 17.2% 23
Neutral{neither support nor oppose) 14.2% 19
Support 25.4% 34
Strongly Support 17.9% 24
11
Totals:134
8. Strategy: Affordable Housing Preservation Inventory
Prepare an inventory of subsidized and other already existing affordable housing to support proactive
policies intended to preserve existing affordable housing.The inventory would be used to target
potential properties for implementation of an affordable housing preservation strategy.
Housing Need Addressed: Housing for low-income residents.
Magnitude: LOW—Will not contribute to new housing production but will contribute to the preservation
of existing affordable housing.
Value Percent Responses
Strongly Oppose 11.2% 15
Oppose 6.7% 9
Neutral{neither support nor oppose) 23,1% 31
Support 38.8% 52
Strongly Support 20.1°A, 27
Totals:134
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9. Strategy: Modify System Development Charge (SDC) fees so they area scaled
by unit size
SDCs are one-time charges on new development that help pay for the costs of expanding public facilities
to serve new development.The City of Lake Oswego charges SDCs for water, sewer, parks, and
transportation improvements.This strategy involves updating the way the SDCs are structured so they
are tied more directly to the size of a home.This also better matches the fees to the development's
impact on the system, since smaller housing units typically have fewer occupants and therefore less
impact on water, sewer, or transportation facilities.
Housing need addressed:Would facilitate development of smaller, more attainable housing units that
may be affordable to moderate-income and smaller households.
Magnitude: LOW TO MODERATE—This tool may enable some projects to produce a greater number of
smaller units,thus increasing production of more units and expand housing choices somewhat.
Value Percent Responses
Strongly Oppose 11.4% 15
Oppose 6.1% 8
Neutral{neither support nor oppose) 18.2% 24
arm
Support 35.6% 47
Strongly Support 28.8% 38
Totals:132
10. Strategy: Create pre-approved plan sets for accessory dwelling units (ADUs)
Pre-approved plan sets are building plans that have been reviewed in advance for conformance with
zoning and building codes.The City could make such pre-approved plans available for ADUs, which are
small homes located on the same property as a single-family home. ADUs offer opportunities for family
members to live on the same site but in a separate dwelling, or can be rented out, allowing the
homeowners to supplement their income. Pre-approved plan sets can make ADUs easier to build and
reduce costs through reduced design fees and faster permit timelines.The plan sets could also be
designed to be accessible (consistent with the accessibility strategy discussed earlier).
Housing Need Addressed: Increased housing choices within existing neighborhoods. Increased rental
opportunities. Options for multigenerational housing. Opportunities for aging in place.
Magnitude: MODERATE—Would likely lead to more development of ADUs in the city, which could
increase the number of available rental properties and increase housing choices in developed
neighborhoods.
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Value Percent Responses
Strongly Oppose 15,3% 20
!MI
Oppose 9.2% 12
NeutraL{neither support nor oppose) 17.6% 23
Support 32.8% 43
Strongly Support 25.296 33
TotaLs:131
11. Strategy: Zoning bonuses for affordable housing
This strategy involves allowing additional building height, density, or floor area, or relaxing other zoning
standards for affordable housing.These types of bonuses allow affordable developers to make more
efficient use of land,fit more units into a development, and make their projects more financially viable.
The City already allows a limited height or density bonus for affordable developments in certain zones
and could consider enhancing or expanding this program or adopting a new bonus, such as reduced
open space for affordable housing.
Housing Need Addressed: Government-subsidized affordable housing for low-income households.
Magnitude: LOW TO MODERATE—Might lead to a small increase in the number or percentage of
affordable housing units.
Value Percent Responses
Strongly Oppose 26.0% 34
Oppose 20.6% 27
NeutraL{neither support nor oppose) 22.1% 29
Support 19.896 26
Strongly Support 11.5% 15
sir
Totals:131
12. Strategy: Adopt a Construction Excise Tax (CET) to fund affordable housing
projects and programs
This strategy applies a tax on construction projects, and the funds generated from the tax can be used to
fund affordable housing or other needed housing. Most cities using this program have adopted a CET tax
of up to 1%on construction projects. Cities have options to exempt certain types of development—such
as smaller units or multi-family housing—and affordable housing is already exempted. Some cities have
used CET to fund new affordable development, purchase property for affordable housing, provide
financial incentives, and provide down payment assistance for first-time homebuyers. CET is one of the
few available locally-controlled sources of money to help fund affordable housing.
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Housing Need Addressed: Government-subsidized affordable housing for low-income households.
Magnitude: HIGH—The revenue potential of a CET in Lake Oswego is potentially quite high and could
support a significant amount affordable housing development in the city.
Value Percent Responses
Strongly Oppose 19.2% 25
Oppose 16.9% 22
NeutraL{neither support nor oppose) 16.9% 22
Support 25.4% 33
Strongly Support 21.5% 28
Totals:130
13. Strategy: Adopt a Vertical Housing Development Zone tax abatement in
targeted areas
This strategy is intended to encourage multi-story mixed-use development (ground-floor businesses with
housing above) and affordable housing in areas designated by the City.The program allows a property
tax reduction for 10 years,which can make mixed-use development more financially viable, as it is often
a challenging form of development. Projects earn additional tax reductions if they include housing units
that are affordable to low-income households.
Housing Need Addressed: High-density housing in targeted areas of the city. Increased housing choices
in areas with strong access to goods, services, and transit.
Magnitude: LOW TO MODERATE—This program has the potential to encourage some mixed-use
development in designated areas.
Value Percent Responses
Strongly Oppose 14.1% 18
Oppose 8,6% 11
NeutraL{neither support nor oppose) 28.1% 36
Support 36.7% 47
Strongly Support 12.5% 16
Totals:128
14. Strategy: Adopt a Multiple Unit Property Tax Exemption (MUPTE)
This is a 10-year property tax exemption for multi-family or middle housing (e.g.,triplexes and
fourplexes)with particular features or at particular price points. MUPTE is a flexible tax abatement
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strategy that can be used in various ways to encourage development of specific types of needed housing.
The City has broad discretion as to how to structure the program. Eligibility criteria could include
requirements for affordability, accessibility/universal design, unit size, or other desirable features.
Housing Need Addressed: More attainable housing choices, including multi-family and middle housing
options. Could also encourage apartments with family-sized units (2-3 bedrooms) and accessible housing
options for seniors and people with disabilities.
Magnitude: MODERATE—Could encourage production of more multi-unit housing that meets needs not
currently being met by the private market.
Value Percent Responses
Strongly Oppose 19.0% 24
Oppose 15.1% 19
ar
Neutral(neither support nor oppose} 23.8% 30
Support 34.1% 43
Strongly Support 7.9% 10
Totals:126
15. Strategy: Create pre-approved plan sets for middle housing types
This is similar to the strategy of pre-approved plan sets for ADUs, except this would encourage more
development of middle housing types, such as duplexes,triplexes, and cottage clusters. Pre-approved
plan sets can make these housing options easier to build and reduce costs through lower design fees and
faster permit timelines.This could attract developers that typically develop only single-family housing to
get involved in building middle housing.The plan sets could also be designed to be accessible (consistent
with the accessibility strategy discussed earlier).
Housing Need Addressed: Increased housing choices, including more attainable homeownership
options.
Magnitude: MODERATE—Would likely lead to more development of middle housing in the city, but cost
savings to builders wouldn't necessarily translate to reduced sale prices or rents.
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Value Percent Responses
Strongly Oppose 15.6% 20
Oppose 18.0% 23
Neutral(neither support nor oppose) 19.5% 25
Support 3L3% 40
Strongly Support 15.0% 20
Totals.128
16. Strategy: Remove or reduce minimum parking requirements — no question
asked
17. Do you have any thoughts or concerns about any of the strategies
described in this survey that you would like to share with the City? (open ended
responses)
1. Removal of parking mandates is a bad idea.There is little rapid transit in town and individuals
must get to work. Cars will be forced to park on the street in areas where there is limited street
parking.
2. Don't allow developers to raze old buildings and build multi-million dollar homes making Lake
Oswego unaffordable to families who want to live there.
3. The city is already becoming overwhelmed we have seen a sharp increase in traffic, as the
population has increased, and this is puffing a drain on services- by simply adding more
affordable houses we increase the density and thereby further increase the strain on what was
once a comfortably sized small city.
4. What about allowing Tiny Houses on lots with alleys? They can be added or removed as needed.
A simple way to offer lower housing costs.
S. It will destroy the atmosphere and the character of the city and many people who lived here for
decades will move out
6. Stop taxing us.The people living here are trying to afford staying in their homes.The constant
bonds and taxes are making that very difficult.
7. Lake Oswego is a great place to live and if someone wants to live here they can find a way, like I
did. Like we all did. I am not rich,far from it. Where was our hand out?That is what you are
creating. Keep it fair,will you subsidize ALL of the lower income families in Lake Oswego?Will
you reduce my taxes when I retire and they become a massive burden? People need to work
harder and make it on their own. Sorry sometimes you need to live in an area you can afford.
The crying of unfairness is getting old, I want a new Lexus, but I don't ask the manufacturer to
reduce rates or give me a deal, I buy a Toyota.The city needs to stay far away from playing in the
real estate business let the private sector do that.
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8. It seems that the cities options for affordable house only consist of apartments or attached
houses. What about people who want to have a home that is standalone. Perhaps it would be
worth looking into all the developers who buy smaller affordable homes and turn them into
huge expensive monstrosity.They are literally taking affordable homes out of the hands of
people in Lake Oswego.
9. I would like to know if it's been taken in to account how all this construction will affect the
surrounding nature density? Is there a requirement for preserving our tree canopy?What is the
environmental impact of all this proposed construction?The natural beauty of this are is
important! Please consider an initiative regarding tree replacement! Perhaps a requirement that
if one is cut one, one must be planted.
10. The city should consider goal 5 (natural resources) and goal 1 (citizen input) of the comp plan as
it relates to the environmental impact of housing.These decisions cannot be made in a "silo".
The comp plan is mentioned once in this survey- in strategy number four relating to fairness in
housing.The city should not cherry pick portions of the comp plan to suit developers or appear
DEI-minded. If we have an environment with noise and air pollution, and increased heat, and
disconnection from trees and insects and birds,we can have all the houses in the world, but we
will be unhappy due to increased crime, reduced property values, and physical, mental, and
spiritual illness.
11. Either one can afford to live in a certain city or not. It's out of control to mandate government to
implement services/policies to accommodate those who can't. It's really that simple.
12. Concerns with loss of unique characteristics of neighborhoods. Loss of older homes and mature
tree canopy. New builds that lack character or charm and are built with low quality materials.
13. I really just would like to see more new housing of any type built in LO (this includes and is not
limited to any and all new apartment buildings of any visual appearance built anywhere in the
city). I have lived in LO my whole life, but as a college student about to enter the workforce, I'm
concerned I'll never be able to buy or rent anywhere in LO because of the rising costs (and while
I never expect LO to be a cheap place to live, I think it should be a possibility for people like me
making near the US median salary). I think increasing the supply of new housing should be the
#1 priority of the city with these plans, and I see cities like Austin,TX as success stories for
reducing the rent burden of their residents by allowing the building of tens of thousands of new
housing units — resulting in significant decreases in rent prices. I also see multi-unit dwellings
as a bonus for the City of Lake Oswego, because they add multiple new citizens to the city's tax
base, while requiring public service expenditures that are far less per citizen (than in a
comparable number of people in single family homes) because of the housing density.
14. Strategy#16 did not have a response option, although I support it fully, so long as the city
continues its commitment to regionally integrated mass transportation and bicycling lanes.
15. You can easily address housing issues for seniors on fixed incomes by providing property tax
discounts for people over 65 and provide homestead property tax exemption to encourage
home ownership rather than rental.
16. Do not reduce parking or build high rise buildings. Schools will be impacted by more families so
it is sometime to consider. As well as increased traffic.
17. This important project has s in the right track. Keep moving forward with a sense of urgency.
18. Na
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19. 1.) I strongly support removing minimum parking requirements 2.)As a low income senior
dependent on Social Security, the burden of meeting my property taxes is becoming almost
impossible. I have owned my house for a long time and would like to age in place. I don't want
to be forced out of my home because I cannot afford the taxes.
20. Recommend changes to strict protections for trees in our city to allow home owners to build
more ADUs and middle housing on their land.
21. There needs to be more options for seniors so they can stay in LO.There is no real tax breaks for
seniors as the deferred property tax is just a loan that has to be paid back. I support housing for
low income/moderate income households. Start with the seniors,they have been paying
property taxes for 50 years and need a break to age in place.This state is very backwards on tax
breaks for seniors.
22. I think that the approach to most construction for existing homeowners is restrictive by the City.
For example, ADUs should not have the restrictions on them. The City should be working with
community members not making it impossible for anyone to modify their property as they feel
fit, obviously safely.
23. Removing parking is a mistake that will lead to increased engine idling due to congestion and
decreased pedestrian safety for a generation as businesses are choked through lack of customer
space. It will make the city less accessible to elders and families. Can the city designate
mandatory"waiting spaces"? It's already hard to pick up and drop off my children from dance,
which I certainly can't do by bicycle with my three other children under 10 in tow. Less space for
vehicular movement means less commerce and less tax revenue.
24. Reduced parking needs to be offset with enhancement to public transportation
25. I strongly disagree with reducing parking requirements as part of developing middle/affordable
housing. I also strongly disagree with the City's continuing to allow greedy developers (e.g.
Monogram and Renaissance)to purchase perfectly good, relatively affordable homes, destroy
the houses, and erect over-sized, highly-priced, mcmonster houses in their place.
26. Concerns- need to have parking to support multi family housing. Most residents living in these
units will have at least one car. Also concerned that traffic will increase significantly with these
plans. - LOSD class sizes are already too large; not sure how the schools can support big
increases in multi family housing especially if property tax exemptions are made. - preserving
our parks and green spaces needs to be a priority.
27. this last state mandate strongly concerns me as someone who is disabled
28. It's pretty simple, Lake Oswego is expensive. You can build 5 low income units in LO for the same
price you can build 20 elsewhere. Every measure proposed is increasing our density and
increasing costs of living for those in our community while infrastructure gets no improvements.
Those living here will reach a point they can longer afford to age in place forcing their sale of
what has been their family home. Traffic continues to increase with no additional roads or
improvement to roads occurs. The planning department and existing codes do not allow
homeowners to build what they choose due to a myriad of rules that will all be thrown out the
window if one chooses to add a home via ADU, why is this ok when you won't even allow a
second kitchen in a home? I am aware of the State's housing requirements but they DO NOT FIT
OUR COMMUNITY! People work hard and pay a fortune to live here, our property taxes alone
are higher than many pay for mortgage and everything you are proposing will simply increases
costs while reducing the quality of our community and the quality of life in our community.
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29. My family and many other community members are concerned about the city taking our parks,
like Springbrook and Waluga, and turning them into housing developments. Kids use
Springbrook to walk to school, explore, connect with nature, run trails during gym class, and
bike. It's also home to many animals. It's a treasured part of the community by kids and adults.
Our parks are a big part of what make LO unique and beautiful. Please don't take Springbrook
annd other parks away from the community.
30. The City is beholden to large developers of large houses because their construction generates
greater taxes, most of which (greater than 50%of my tax bill) go toward LOSD bonds. We would
have been wise to use some of the land in First Addition where older homes were demolished
and large new trendy homes were built, and devote them to multi-family dwellings like
townhomes. Public transit is almost non-existent in LO without driving to a transit mall or to a
neighborhood with a bus stop and on-street parking.Tri-Met schedules are infrequent,
inconvenient, and the rides are long. Affordable housing and/or middle-income housing doesn't
make sense unless they are near public housing, especially if we are required to reduce or
eliminate the already low parking inventory.Thinking logically, there are almost always 2 drivers
per household, and almost always 2 vehicles because, in order to afford housing costs,there are
2 workers per household.That means there needs to be 2 parking spaces per household or living
unit. If the household has student drivers with vehicles,you need more space. Through
eminent domain,the City forced out a couple of businesses so they could rebuild the water
treatment plant, which idea has since been scrapped. But the land is still being considered for
affordable/middle-income waterfront housing?Seriously?The large plats of land that are
available, and there aren't many, are in zoned industrial areas.This reminds me of the Projects of
Chicago, Detroit and New York, or"Planned Ghettos". In addition, we do not have the
infrastructure in place to handle our current population much less an increased one due to an
increased number of housing units. I understand the Governor has mandated changes and I
don't think she fully grasps the magnitude of the negative effect on Lake Oswego's livability. As
one of those people trying to "age in place", I fully appreciate what our current inventory lacks in
terms of places for me to move when the time comes. I can't afford to live anywhere other than
my mortgage-free 2-story home.The "creep" effect of our proximity to Portland has brought
more people to LO panhandling in parking lots and on sidewalks and generally undesirable-
looking people wandering around our neighborhoods. And by that description I mean a young
white male with falling jeans and bare chest stumbling down the hill near Kruse Way Place at
Boones Ferry Road (it was about 45 that day), or another young white male in a dark hoody and
extremely baggy pants grabbing his pants to keep from exposing himself. I have never seen this
type of thing in the 37 years I have lived here. I'd like to keep LO livable, and I'd like to continue
to feel safe here so whatever strategies the City ultimately adopts, I hope they don't negatively
impact my, and others' feeling of well-being. A challenge to be sure and thank you for the
opportunity to share my opinion.
31. I think the State mandated rule to "Remove or reduce minimum parking requirements" is an
extremely bad idea.This will push drivers to park in residential neighborhoods causing friction
between the neighborhood, businesses, pedestrians and future home owners. I see this as a first
step toward going to a permit system to park in front of my own house.
32. While I generally support increased housing for those in need, it is difficult to support an
increase in housing in Lake Oswego without also expanding our infrastructure to accommodate
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an influx of 1000 people. This is a relatively small town, without amenities a large city offers.
There are regions in Oregon with expansive land...why aren't we creating new clusters of low
income housing in areas that can manage a massive influx of cars and people with daily living
needs? Why are we needing to cram everyone in to these area/towns with over loaded
capacity? I realize we can't reverse federal laws, but whatever can be done to minimize the
impact on Lake Oswegos charm and livability, should be prioritized. The Mercato Grove which
has "unaffordable" housing and is mixed use, is a complete eyesore because of its height and
grandiose size,and robs our city of its natural beauty. The parking area in the center should be a
piazza where people can gather. The strategies described in this survey all seem to diminish
quality of life in Lake Oswego. I am not sure what the answers are, but I lean towards cottage
clusters, built near downtown or Foothills, over massive apt buildings any day.
33. In general, I am opposed to government subsidy of new house, or rezoning to increase density. I
prefer seeing further development outside of Lake Oswego where the natural setting has already
been obliterated by suburban development.
34. Limit teardowns!
35. More affordable house typically leads to more litter,vandalism and crime. Lake Oswego doesn't
necessarily need to adopt liberal housing policies just because Portland does.
36. Of the 40 percent of current households with incomes less than $100K, how many are owned by
retired folks who are living in their homes with no mortgage. Protecting those generally older
homes and affordability for seniors should be an important consideration.
37. It's a mistake to reduce parking.There's not enough safe public transit. Even in Portland,the
MAX runs without transit police and when I commuted by MAX I felt unsafe on many occasions
and I'm no stranger to big cities. In LO we just have a few bus routes.We're a car-centric city.
38. Reduce property taxes for seniors living on fixed income, utility bills also!!!!
39. As a lifelong LO resident, I have no problem with encouraging more ADUs, low income
residences and bringing that diverse population into LO.
40. The parking issue is a major concern for me. The City cannot put its head in the sand and think
for one minute that people don't have cars. You MUST provide adequate parking for the housing
that is being built. This includes the hotel project at 1st and B. I believe that the City is ignoring
the impact on current residents when it is reducing the required number of parking spaces.
PLEASE WAKE UP AND CHANGE THIS WAY OF THINKING!!! I don't care that it costs more for
developers to build adequate parking. I don't care that you can't have as many housing units if
you also build parking. The people who live there NOW should be treated with more
consideration.
41. This type of social engineering always has more negative, if unintentioned, consequences than
benefits. It is a massive waste of resources that has no measurable benefits for current
resident/taxpayers and greatly expands the role of government in our lives. The primary roles of
local government are public safety, providing adequate and safe infrastructure,fair and effective
land use and ensuring a public environment where environmentally friendly space is made
available for recreation. The rest is mostly political ideology.
42. I like the idea of middle housing, but do not like the pre approved plans idea because I don't
want to see the same clusters all over town. I like them to be unique to the area and
neighborhood.
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43. Based on my experience as a Lake Oswego homeowner and history of working with low income
populations I have a couple of thoughts: 1) increase/preserve starter homes that allow and
promote home ownership by low and moderate income families with children and a pathway to
our rich resources LO (parks, schools, etc.) 2) Identify what role developers can play beyond just
making a profit 3) Keep engaging residents
44. Well prepared proposals and survey!
45. Lake Oswego does not need more housing.
46. Turning Lake Oswego into Portland's Pearl District is a major concern for me, a 30 yr resident.
47. Builders need to build simple, homes with good bones. Cut out the granite countertops but keep
well insulated walls. No more flashy homes that are out of financial reach. &Yes we need
parking. 2 per unit. & charging stations in apartment complexes. Limit corporate ownership for
renting so more affordable to buy.
48. Lowering our existing home values, creating population density and infrastructure issues by
adding more people. I'm strongly opposed to these ideas which is basically trying to sell
overdevelopment in the. name of fair, affordable housing. Not everyone can afford everywhere,
it's ridiculous to make towns forced to add cheaper housing than the market allows
49. STOP BUILDING MULTI MILLION DOLLAR HOMES AND CONDOS. You all are complete idiots.
Stop building unaffordable e
50. Glad to see any and all housing in LO!
51. Our housing shortage is 100%due to 50 years of restrictive zoning. Open up all LO
neighborhoods to any development and stop nitpicking. Setbacks, FAR, driveway and garage
regulations?Gatekeeping, homogenous NIMBY BS. Throw away Euclidean zoning and let LO
change according to its needs NOW, not 50 years ago.
52. I feel that the current water rates are inequitable and don't align with LO's affordable housing
goals. One way to support affordable housing and lower income residents like myself would be a
reevaluation of water and sewer charges. I live alone, shower every other day, do 2 loads of
laundry per week, 3 dishwasher loads. I don't have a driveway and I live in a small townhome so
my surface/stormwater impact is minimal. I also don't water a lawn because I don't have a yard.
And yet my water bill is only$10 a month less than a family of 3 that I know who live on a
double lot with a home, garage and additional outbuilding. People like me are subsidizing the
water bills of more affluent people with huge stormwater impacts from long driveways and roofs
covering 5000 square foot homes. Plus their high water usage for pools, lawns and family water
needs barely moves up their water costs. Because the base rate is the same for all people
regardless of their property size, usage and income level,the system is set up to reward the
wealthy while putting an unfair burden on lower income people. I currently have zero incentive
to conserve water as I could let my tap run all day and my bill would hardly increase at all. I think
there needs to be a tiered base rate system that addresses property size, surface area for
stormwater runoff and income level. And an incentivized lower usage rate for people who's
usage falls below a certain amount.
53. Any incentives should only apply to affordable units, not market rate dwellings.There should be
a strategy to leverage regional and state resources and partnerships.
54. My biggest concern is control of security and crime. How do we ensure our city stays safe?And -
how do we ensure we avoid homelessness issues?
55. Please don't ruin our community!
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56. get rid of rent control. 98%of economists say it is a bad idea. Get rid of the tree code. It is
counter-productive to a healthy urban forest. becauseof it no one plants trees that will grow
large. with no new trees the forest will end.
57. This issue has been under discussion for decades. I hope this survey/project actually leads
to...something? Someday?
58. We struggle with finding parking as it is in Lake Grove, and you want to take that away? My
clients are seniors and had to walk two blocks just to eat at Gubanc's after the Vity took up the
parking,there has to be a better way.
59. Housing cost is extremely high. How about a rent break on taxes?
60. The location of high density needs to be where there is transportation and grocery options
61. Support services (schools, emergency services, grocery, restaurants, parking, more traffic
solutions and so much more) must be planned for with any new housing that may be
considered.
62. Reducing parking is a problem. It should only be done for housing along public transit lines.
63. I am concerned about losing the character of Lake Oswego for sake of new development. I'm
concerned that we will lose our natural beauty and spaciousness. More development means
more traffic, more strain on community systems, and ultimately, a more crowded place to live. I
oppose the assumption here that Lake Oswego needs to develop more housing. Development
control has more or less worked to preserve the small town feel and beauty here for years.
64. As many other Oregon cities have with Middle Housing and in general code, Lake Oswego needs
to include detached units (duplexes, etc) and encourage universal design.
Demographic Questions
1. What is your relationship to Lake Oswego? Check all that apply.
100
75
N
2 50
-
25
0 -
I live in I live in I Live I work in I regularly
the City of unincorporated outside of lake visit Lake
Lake area near Lake Oswego Oswego
Oswego Lake Oswego for
Oswego reasons
other than
work
2. Do you rent or own your home?
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Public Engagement Summary (DRAFT) 6/14/2024
Value Percent Responses
I Live in the City of Lake Oswego 95.2% 111'
Live in unincorporated area near Lake Oswego 2.4% 3
•
Live outside of Lake Oswego 1.6%
I work in lake Oswego 8.8% 11
I regularly visit Lake Oswego for reasons other than 3,2%
work -
3. What type of housing do you currently live in?
Value Percent Responses
Rent 11.9% 15
Own 88.1% 111
Totals:126
4. What is your age?
Value Percent Responses
Detached single-family home 75,8% 94
Duplex,triplex,or quadplex 4.0% 5
■
Townhouse!attached home on its own lot) 9.7% 12
Apartment or condo 10.5% 13
Totals: 124
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Public Engagement Summary (DRAFT) 6/14/2024
5. What is your approximate household income (before taxes)?
Value Percent Responses
18-24 0.896 1
25-34 0.8% 1
35-44 21.0% 25
45-54 14.3% 17
55-64 22.7% 27
65 and older 40.3% 48
Totals: 119
6. What is your race/ethnicity? Check all that apply.
Value Percent Responses
White 87.9% 94
Black or African American 0.9% 1
American Indian or Alaska Native 1.9% 2
Asian 1.9% 2
Native Hawaiian or Pacific Islander 0.9% 1
Hispanic or Latino 1.9% 2
Other(please describey: 11.2% 12
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Other (please describe): Count
American 1
Doesn't matter 1
Human 1
N/A 1
mixed 1
prefer not to discLose 1
why does it matter 1
Totals 7
7. What is the highest level of education you've received?
Vatue Percent Responses
High school degree or equivalent(e.g.GED) 2.5% 3
I
Some college 5.4% 10
Associate's degree 4.2% 5
■
Bachelors Degree 34.5% 41
Graduate Degree 50.4% G0
Totals: 119
Engagement Evaluation
Even though this project included a thorough engagement effort,with various opportunities for
community members and stakeholders to participate,there are opportunities for improvement in future
engagement practices.
The city did include members of historically underrepresented groups and marginalized communities—
including renters and people of color—as part of the HPS Task Force, and also engaged these
communities through discussions with the Diversity, Equity and Inclusion Advisory Board. However,the
City could make more efforts to more directly engage with these communities,for example,through
MIG, Inc. I Lake Oswego Housingl Production lStrategy
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Public Engagement Summary(DRAFT) 6/14/2024
targeted focus groups.The City could consider partnering with organizations that specialize in that type
of engagement—such as organizations that work with Hispanic and Latino or other culturally-specific
communities.
Also, the city lacks tools and platforms that make virtual/hybrid participation accessible and engaging for
everyone.The project incorporated some tools (e.g.,the Alchemer survey platform and Zoom)to engage
community members virtually. However, in the future, a virtual engagement platform like Bang the Table
could make virtual engagement more accessible to those who cannot attend or commit to an
event/meeting at a set date and time, and could facilitate more robust community conversations.
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APPENDIX C:
PRE- HPS SURVEY RESULTS
(To be added at a later date)
PP 22 PP022-0005 amemENT roan all Housing Production Strategy
ATTACHMENT 2
itr Habitat for Humanity®
Portland Region
May 1, 2024
Re: HOLTE in Lake Oswego
Dear Mayor Buck and Lake Oswego City Council,
We are writing to commend the City of Lake Oswego and the Housing Production Strategies
Taskforce for considering property tax tools to make affordable housing development more
viable and we'd like to propose an additional strategy geared towards catalyzing affordable
homeownership.
With steep interest rates and escalating construction costs, homeownership is farther out of
reach for low- and moderate-income households and building affordable homes for sale
requires increasingly complex financing. The HOLTE program, which provides a 10-year
property tax exemption on the improvements for lower-income homebuyers in new, affordably
priced homes, allows Habitat to partner with families for whom homeownership is a truly
transformational opportunity. Currently, Portland is the only city in our program's footprint
that has implemented HOLTE.
HOLTE makes homeownership work for lower-income households because a reduction in
property taxes translates into increased purchasing power. For some families who partner with
our program to buy a home, this savings is the critical difference that allows the household to
qualify for an affordable mortgage.
In consultation with the Clackamas County Tax Assessor, we have estimated that our
homeowners in the Habitat for Humanity West Lake Grove development in Lake Oswego will
pay property taxes of$333/month for 3-bedroom homes and $375/month for 4-bedroom
homes. To set homebuyers up for success, their total monthly payment (mortgage principal &
interest, HOA fee, Proud Ground fee, insurance, and property taxes) should be 30% of their
monthly income. Every lever that can reduce those monthly costs lowers the income threshold
that families need to meet to qualify for a mortgage.
The West Lake Grove Townhomes will be established as part of the Community Land Trust, in
partnership with Proud Ground. Resale restrictions attached to the deed keep Community Land
Trust properties affordable in perpetuity. Those affordability restrictions reduce the property's
appraised value and come with a property tax discount. That helps, but $333-$375 per month
is still a significant cost for families with limited disposable income.
PP 22-0005 ATTACHMENT 2/PAGE 1 OF 2
Habitat Portland Region supports the City's swift action to implement a nonprofit low-income
housing property tax abatement. That program, however, will not impact the property taxes
that Habitat homeowners pay; once Habitat homes are sold, they are owned by the
homeowners, not a nonprofit.
Homeownership remains our country's most proven strategy for long-term housing stability
and generational wealth-building. The stability of a fixed affordable mortgage allows families to
save for emergencies and college, and to pass an asset to the next generation. Given rapidly
escalating housing costs, our region needs to embrace an array of proactive strategies so that
homeownership is not just an exclusive privilege for a select few. We hope you'll consider
HOLTE.
Thank you for your service to the community.
•
• ti /fry
Steve Messinetii
President & CEO
Habitat for Humanity Portland Region
PP 22-0005 ATTACHMENT 2/PAGE 2 OF 2
ATTACHMENT 3
LAKE OSWEGO HOUSING
PRODUCTION STRATEGY
Initial Housing Strategy Recommendations Memo I February 8, 2024
Introduction
This memorandum provides an evaluation and initial recommendations for the housing strategies that
the City of Lake Oswego may consider as part of its Housing Production Strategy(HPS).These are
potential strategies that the City and its partners can employ to address Lake Oswego's current and
future housing needs, as identified in the recently-completed Housing Needs Analysis (HNA).
This memo builds on prior work by City staff, consultants, and the HPS Task Force.The Task Force
reviewed the "Strategy Alternatives Memo" at their meeting on December 8, 2023.At that meeting, the
Task Force formed breakout groups to discuss which housing strategies could best address high-priority
housing needs identified in the HNA—Government-subsidized affordable housing units affordable to
people with very low or low incomes; Housing affordable to households with moderate incomes;
Housing options/choices to meet a full range of household needs and preferences; and Housing for
seniors and opportunities for seniors, people with disabilities, and aging in place.
Based on this feedback, and on further evaluation of each strategy's potential impact and feasibility,
the project team has provided initial recommendations for which strategies to include in the HPS.
MEMO ORGANIZATION
This memo is organized into the following four sections:
1. Recommended Strategies
The project team's initial recommendation is to include these strategies in the HPS.These
strategies have either received clear support from the HPS Task Force, City Council, and HPS Task
Force; have a low-barrier to implementation; and/or are expected to have a moderate to high
impact on housing production.
2. Strategies Needing Further Discussion
These strategies need further discussion by the HPS Task Force, Planning Commission, and City
Council before the project team can make a recommendation as to whether they should be
included in the HPS. If adopted,these strategies could have a meaningful impact on housing
production.
3. Contingent Strategies
These are various ways that the City could allocate funds to support affordable housing
production or preservation. Each of these strategies are contingent on adoption of a new
funding source, such as Construction Excise Tax,for the City to participate meaningfully
4. Not Recommended
These strategies are not recommended for implementation in the HPS because they are not
PP 22-0005 ATTACHMENT 3/PAGE 1 OF 42
expected to have a meaningful impact on housing production. Currently, only one strategy is
included in this category.
STRATEGY EVALUATION
This report provides additional background information for each of the housing strategies included in the
"Strategy Alternatives Memo" and takes a closer look at the potential impacts to housing
supply/affordability, benefits and burdens on priority populations,feasibility, and actions needed for
implementation.
The summary of each housing strategy includes the following information:
Description What is the strategy? How can the strategy work to address identified housing
needs in Lake Oswego?What are potential outcomes?
Considerations What potential options,funding needs, challenges, etc. are applicable to the
strategy?Are there potential trade-offs or negative externalities to consider?
How feasible is this strategy, given other considerations?
Anticipated What is the anticipated impact of the strategy?The following types of impacts
Impact are considered:
• Housing need addressed—Housing need identified in the HNA that is
addressed by the strategy
• Populations served by the strategy
• Income levels addressed by the strategy
• Benefits and burdens that priority populations may receive from the
strategy. Priority populations include low-income households, people of
color, people with disabilities, seniors, and other state or federal protected
classes.
• Housing tenure (either owner or renter)
• Magnitude of the action for producing new housing:
o Low impact:The strategy is unlikely to meet the relevant housing
need. A low impact strategy does not mean an action is unimportant.
Some actions are necessary but not sufficient to produce new housing.
o Moderate impact:The strategy either may have a moderate impact on
meeting the relevant housing need or be designed to target that need.
o High impact:The strategy may directly benefit a certain housing need
and is likely to be most effective at meeting that need relative to other
strategies.
Time Frame Implementation: When does the City expect the action to be adopted and
implemented? Strategies are identified as Near Term (1-3 years), Medium Term
(within 3-5 years), and Longer Term (>5 years) actions.
Impact: Over what time period will the impact occur?
Implementation What actions will the City and other stakeholders need to take to implement the
Actions strategy?
Lead & Partners Who will be responsible for implementing the strategy?What partnerships
might be necessary or beneficial to the strategy?
PP 22-0005 ATTACHMENT 3/PAGE 2 OF 42
Summary of Housing Strategies
Implementation
Strategy DLCD Category* Time Frame
1. Recommended Strategies
1.1 Code Audit and Amendments(Z01) Z. Custom Options Near Term
1.2 Remove or Reduce Minimum Parking Requirements B. Reducing Regulatory Impediments Near Term
(B01)
1.3 Nonprofit Low-Income Housing Exemption (E01) E.Tax Exemption and Abatement Near Term
1.4 Low-Income Rental Housing Tax Exemption (E02) E.Tax Exemption and Abatement Near Term
1.5 Public-private partnerships for affordable housing(F04) F. Land,Acquisition, Lease,and Near Term
Partnerships
1.6 Fair Housing Policy and Education (B14) B. Reducing Regulatory Impediments Near Term
1.7 Rezone Land (Z02) Z. Custom Options Medium Term
1.8 Evaluate accessible design incentives or mandates(A23) A.Zoning and Code Changes Medium Term
1.9 Use Tax Increment Financing(TIF)to support affordable D. Financial Resources Medium Term
housing development(D10)
1.10 Affordable Housing Preservation Inventory(F19) F. Land,Acquisition, Lease, and Medium Term
Partnerships
1.11 Modify System Development(SDC)fee schedule(CO2) C. Financial Incentives Longer Term
1.12 Pre-Approved Plan Sets for ADUs(A21) A.Zoning and Code Changes Longer Term
2. Strategies Needing Further Discussion
2.1 Zoning Incentives for Affordable Housing(A03) A.Zoning and Code Changes TBD
2.2 Construction Excise Tax(CET) (D09) D. Financial Resources TBD
2.3 Vertical Housing Development Zone Tax Abatement E.Tax Exemption and Abatement TBD
(E03)
2.4 Multiple Unit Property Tax Exemption (MUPTE) (E04) E.Tax Exemption and Abatement TBD
2.5 Pre-Approved Plan Sets for Middle Housing Typologies A.Zoning and Code Changes TBD
(A20)
3. Contingent Strategies
3.1 Housing Trust Funds(D03) D. Financial Resources Contingent
3.2 Low-Interest Loans/Revolving Loan Fund (D13) D. Financial Resources Contingent
3.3 Community Land Trusts(F03) F. Land,Acquisition, Lease, and Contingent
Partnerships
3.4 Preserving Low-Cost Rental Housing to Mitigate F. Land,Acquisition, Lease, and Contingent
Displacement(F05) Partnerships
4. Not Recommended
4.1 Homebuyer Opportunity Limited Tax Exemption E.Tax Exemption and Abatement N/A
Program (HOLTE) (E06)
PP 22-0005 ATTACHMENT 3/PAGE 3 OF 42
*DLCD Category refers to the type of action each strategy entails, according to DLCD's Housing
Production Strategy Guidance Document'):
A. Zoning and Code Changes
B. Reduce Regulatory Impediments
C. Financial Incentives
D. Financial Resources
E. Tax Exemption and Abatement
F. Land, Acquisition, Lease, and Partnerships
Z. Custom Options
1. Recommended Strategies
The following recommended strategies have either received clear support from the HPS Task Force, City
Council, and HPS Task Force; have a low-barrier to implementation; and/or are expected to have a
moderate to high impact on housing production. Recommended strategies are organized into Near-Term,
Medium-Term, and Longer-Term strategies.
NEAR-TERM STRATEGIES
The project team's initial recommendation is to implement the following strategies in the Near Term (1-3
years after HPS adoption).
1.1 Code Audit and Amendments (Z01)
Description Undertake a comprehensive audit of the Community Development Code (CDC)to
identify and eliminate barriers to housing production.
The CDC audit could potentially address:
• Barriers to accessory dwelling units (ADUs) and middle housing;
• Ways to facilitate smaller units;
• Procedural requirements that add cost and delay to land use approvals;
• Open space requirements in high-density zones;
• Barriers to residential development within mixed-use districts;
• The impact of neighborhood overlays or other regulatory provisions; and
• Other identified Code barriers.
Considerations • This strategy could help reduce or eliminate some of the major code and
procedural barriers identified by housing stakeholders.
'For each strategy,the corresponding strategy number from DLCD's List of HPS Tools,Actions,and Policies is
indicated in (parentheses).
PP 22-0005 ATTACHMENT 3/PAGE 4 OF 42
• The strategy could be shaped to prioritize housing types identified as most
needed in the city, based on the City's recently adopted HNA and
stakeholder input, such as:
o Middle housing (e.g., townhomes, duplexes, and cottage clusters)
o Apartments with family-size units (2-3 bedrooms)
o Multi-family housing (of any size)
o Smaller homes
• Simply removing code barriers will not lead to housing development.This
strategy should be paired with others that directly influence housing
production.
• There may be neighborhood resistance to this strategy, particularly for any
code amendments intended to modify existing neighborhood overlays or
neighborhood planning efforts. Extensive community engagement would be
necessary.
Anticipated • Housing need addressed: General need for increased housing production
Impact and increased housing choices.The HNA indicates that nearly 2,000 new
housing units will be needed by 2043.This strategy could also specifically
address the needs for multi-family housing, middle housing, and smaller
units such as ADUs.
• Population served: Low to higher-income households
• Income level:All income levels
• Benefits and Burdens:This strategy is broad, and therefore difficult to
evaluate in terms of benefits and burdens for priority populations. However,
it does give the opportunity to target efforts in beneficial areas such as
reducing barriers to affordable development or housing that is more
attainable to low-and moderate-income households (e.g., multi-family and
middle housing); facilitating smaller housing options such as ADUs, which
could benefit seniors; and other areas aimed at helping priority populations.
In addition, increasing overall housing supply can help keep housing costs
down by balancing supply and demand,which benefits all residents,
including priority populations.
However, because the strategy is intended to increase housing production
overall, it could primarily benefit upper income households, while leaving
less land available for more affordable housing. Implementation of this
strategy should include a focus on meeting the needs of housing types that
benefit low-and moderate-income households, seniors, and other priority
populations.
• Housing tenure: For rent or sale
• Magnitude: Moderate—This strategy could have a moderate impact on new
housing production given the limited remaining inventory of buildable
residential lands.The low inventory and relatively high land prices in Lake
Oswego incentivize making more intensive use of remaining sites, if the code
permits it.
PP 22-0005 ATTACHMENT 3/PAGE 5 OF 42
Time Frame Implementation: Near Term
Impact:The action can begin to have impact after it is implemented in the CDC.
However,the impact on housing development is expected to be longer-term.
Implementation • Identify priorities for the code audit,focusing on high-priority housing needs.
Actions • Conduct a comprehensive CDC audit, potentially with support from a
consultant.
• Work with developers/housing stakeholders and residents to vet potential
CDC amendments.
• Work with Lake Oswego's Planning Commission and City Council to adopt
code amendments.
• City Council Action: Legislative CDC text amendments.
Lead & Partners Lead: Lake Oswego Community Development
Partners: Developer and housing stakeholders
1.2 Remove or reduce minimum parking requirements (B01)
Description Removing parking requirements for residential uses provides the opportunity to
reduce the amount of lot area used for pavement and storage of vehicles and
provides more space for housing and open space.This strategy offers greater
flexibility to site housing and reduces costs associated with providing parking.
The City is not enforcing minimum parking requirements within 1/2-mile of
priority transit, which includes the entire Downtown Town Center, and will likely
remove minimum parking requirements in the City's other climate-friendly area
(Lake Grove Village Center)to comply with state rules on Climate Friendly and
Equitable Communities (CFEC).
There is interest from City Council in potentially repealing minimum parking
requirements citywide.
Considerations • Parking mandates are often cited as a major barrier for market-rate multi-
dwelling and regulated affordable housing.
• Developers often choose to provide parking, even if not required.
Lenders/investors may require some parking to ensure marketability of units.
• There could be community opposition to removing all parking mandates, due
to the potential for higher usage of on-street parking and the potential for
parking overflow from commercial areas to residential neighborhoods.
Anticipated • Housing Need Addressed: General need for increased housing production.
Impact This strategy would especially benefit production of multi-family and
government-subsidized affordable housing.
• Population served: Especially beneficial to low-to moderate- income
households
• Income level:All income levels—especially 30-120%AMI
PP 22-0005 ATTACHMENT 3/PAGE 6 OF 42
• Benefits and Burdens:This strategy has the potential to benefit low-income
households and people of color by removing parking mandates as a barrier
to development of affordable housing.
Access to convenient parking has been raised as an important need for
people with disabilities; therefore, removing parking mandates could
potentially burden those populations if parking is not provided.The City
could consider encouraging property owners to provide parking for people
with disabilities and set policy on when on-street parking designated for
people with disabilities is appropriate. On the other hand, some people with
disabilities are unable to drive and could benefit from removing additional
costs associated with parking.
• Housing tenure: For rent or sale
• Magnitude: High—This action is likely to have the most impact on market-
rate multi-family and regulated affordable housing. Parking mandates are
often cited as a major barrier for those types of development. Reduced
parking often allows for greater density (i.e., additional housing) on a site,
improving the financial feasibility via replacing the sunk cost of building and
maintaining the parking area, with additional revenue-generating space.
Reduced parking also allows developers to be more creative with site
planning and design features in general, often improving the aesthetics and
functionality of a property as well.
Time Frame Implementation: Near Term
Impact:The action will begin to have impact as soon as the parking mandates
are removed. Impacts to housing production are expected to be longer term.
Implementation • Conduct outreach and education related to parking mandates.
Actions • Work with Lake Oswego's Planning Commission and City Council to adopt
code amendments.
• City Council Action: Adopt Development Code text amendments.
Lead & Partners Lead: Lake Oswego Community Development
Partners: N/A
1.3 Nonprofit Low-Income Housing Tax Exemption (E01)
NOTE:The project team's initial recommendation is to implement either or both the Nonprofit Low-
Income Housing Tax Exemption and/or the Low-Income Rental Housing Tax exemption.
Description This tax exemption benefits low-income residents by alleviating the property tax
burden on those organizations that provide this housing opportunity.
Eligible properties must be offered to low-income persons (at or below 60%
AMI), or held for the purpose of developing low-income rental housing.The
housing may be for rent or for purchase, and could be new development or
existing housing acquired by a nonprofit for the purpose of converting it to
income-restricted affordable housing.Jurisdictions may adopt additional
PP 22-0005 ATTACHMENT 3/PAGE 7 OF 42
eligibility criteria for the exemption, provided they don't conflict with state
statutes.
Applicants must renew their tax exemption applications annually. As long as the
housing remains affordable to low-income residents, there is no time limit to the
tax exemption.
While non-profit agencies can apply for tax exempt status through the state, that
process is cumbersome and is not always successful.This strategy would provide
a simplified and consistent method for eligible organizations to apply and qualify
by adopting it as City policy and gaining participation from other taxing districts.
(Authorized by ORS 307.540-548)
Considerations Applicable to all tax exemptions:
• Tax exemptions apply only to the tax levy of a governing body that adopts
the exemptions. In order for the full property tax to be exempted,the City
must seek approval from partner jurisdictions that,together with the City,
make up at least 51%of the overall tax levy. Lake Oswego would need to
secure agreement from either the School District or County or both.
• The City and participating taxing districts will lose property tax income for
the duration of any tax exemption, reducing revenue for City services and
revenue for participating taxing districts. Such taxing districts may express
resistance to new tax abatement or exemption programs that involve
reduced revenue, particularly for programs intended to produce market-rate
housing.
Nonprofit Low-Income Housing Exemption:
• By reducing operating income, property tax abatement programs can be a
powerful tool to increase the feasibility of low-income housing, and perhaps
increase the number of units that are feasible in planned projects. Many
affordable housing developers cite abatements such as the Nonprofit
Housing exemption as an essential tool in helping make projects financially
feasible.
• The City of Lake Oswego received a letter from Mercy Housing Northwest,
the nonprofit developer of the Marylhurst Commons development, urging
the City to adopt an affordable housing tax exemption.This letter(dated
October 24, 2023) is included in the CAG#6 agenda packet.The letter
describes various benefits of a property tax exemption—in particular, in
reducing ongoing operations costs and supporting long-term stability for
affordable housing developments.
Anticipated • Housing need addressed: Government-subsidized affordable housing for
Impact low-income households.
• Population served: Low-income households
• Income level:0-60%AMI (for residents' initial year of tenancy; after the first
year, up to 80%AMI)
• Benefits and Burdens:This strategy would primarily benefit low-income
households by increasing the City's capacity to support production of
subsidized affordable housing.
PP 22-0005 ATTACHMENT 3/PAGE 8 OF 42
No burdens on priority populations are anticipated.
• Housing tenure: For sale or rent
• Magnitude: High—This abatement can have a large impact on making low-
income affordable housing more feasible to develop.The open-ended nature
of the abatement(as long as the project maintains affordability) can offer
very significant savings to the property manager over time and increase the
viability of offering affordable rents indefinitely.The property tax level in
Lake Oswego is roughly$20,000 per$1M in valuation per year.A mid-to
large apartment complex could expect a valuation of many millions of
dollars, amounting to potentially hundreds of thousands in taxes per year. An
abatement of these taxes is a strong incentive and improves feasibility
considerably.
Time Frame Implementation: Near Term
Impact:The tax exemption can be used once it is adopted, and for as long as the
City offers the exemption.The impact on supply of affordable housing is
expected to be longer-term.
Implementation • Work with other taxing jurisdictions to gain approval.
Actions • Develop application standards and guidelines.
• City Council action:Adopt tax exemption policy by resolution or ordinance.
Lead & Partners Lead: Lake Oswego Community Development
Partners: Lake Oswego Finance Department; overlapping taxing jurisdictions
1.4 Low-Income Rental Housing Tax Exemption (E02)
NOTE:The project team's initial recommendation is to implement either or both the Nonprofit Low-
Income Housing Tax Exemption and/or the Low-Income Rental Housing Tax exemption.
Description This is a 20-year tax exemption for any entity that provides income-restricted
rental housing, including nonprofits and for-profit developers. Eligible properties
must be offered for rent to low-income persons or held for the purpose of
developing low-income rental housing.Jurisdictions may adopt additional
eligibility criteria for the exemption, provided they don't conflict with state
statutes.
(Authorized by ORS 307.515-537)
Comparison of low-income housing tax exemption programs:
While these two exemption programs appear similar,they do have some key
distinctions.
Nonprofit Low-Income Low-Income Rental
Housing Housing
Eligible Developers Nonprofits only Nonprofit or for-profit
Income Levels Up to 60%AMI Up to 60%AMI
Tenure For rent or for sale For rent only
PP 22-0005 ATTACHMENT 3/PAGE 9 OF 42
New vs. Acquired New construction or New construction only
Housing acquisition of existing
housing
Annual Renewal Yes No
Required?
Time Limit No limit 20 years
NOTE:The project team does not see any issues with adopting both exemption
programs. Each program has different opportunities and challenges, and it may
be beneficial for housing developers to be able to choose which program best
suits their project needs.
Considerations • Key advantages of this abatement are that it is available to more than just
non-profits and it does not require annual renewal.This can significantly
reduce an organization's administrative burden in implementing the
exemption.
• However,this abatement has less flexibility compared to the Nonprofit
Exemption because it is not available for ownership housing, cannot be used
for acquisition of existing housing, and is limited to 20 years.
Anticipated • Housing need addressed: Government-subsidized affordable housing for
Impact low-income households.
• Population served: Low-income households
• Income level:0-60%AMI (for residents' initial year of tenancy; after the first
year, up to 80%AMI)
• Benefits and Burdens:This strategy would primarily benefit low-income
households by increasing the City's capacity to support production of
subsidized affordable housing.
No burdens on priority populations are anticipated.
• Housing tenure: For rent
• Magnitude: High—Like the Nonprofit Exemption, this abatement can have a
large impact on new affordable housing production.As noted above, an
abatement of property taxes is a strong incentive and improves feasibility
considerably.This abatement is available to for-profit developers and
therefore may generate more new housing than the Non-Profit Exemption.
While not open-ended, a 20-year exemption matches the period in which a
property would otherwise undergo significant depreciation. However, at the
end of the 20-year period,this housing often reverts to market-rate status.
Time Frame Implementation: Near Term
Impact:The tax exemption can be used once it is adopted, and for as long as the
City offers the exemption.The impact on supply of affordable housing is
expected to be longer-term.
Implementation • Work with other taxing jurisdictions to gain approval.
Actions • Develop application standards and guidelines.
• City Council action:Adopt tax exemption policy by resolution or ordinance.
PP 22-0005 ATTACHMENT 3/PAGE 10 OF 42
Lead & Partners Lead: Lake Oswego Community Development
Partners: Lake Oswego Finance Department; overlapping taxing jurisdictions
1.5 Public-private partnerships for affordable housing (F04)
Description Public-private partnerships (PPPs) are arrangements between public and private
entities to develop housing, especially affordable housing. PPPs have the capacity
to bring resources to the table that would otherwise not be available if each
institution were to provide housing on its own.
The City could partner with organizations to support their affordable housing
efforts in a variety of ways:
• Acquire land and/or donate city-owned land;
• Provide grants or low-interest loans for specific development or
rehabilitation projects;
• Provide direct funding; and/or
• Leverage federal, state, and regional resources.
Additionally, the City can pursue specific types of PPPs such as:
• Partnering to convert underutilized non-residential properties into
housing.The City could work with landowners to evaluate opportunities
for adapting vacant/underused buildings for new housing or mixed-use
development. Implementing this strategy may depend, in part, on use of
tools such as TIF funding (Strategy 1.9)to address infrastructure
deficiencies or support development of affordable housing.
• Utilizing surplus land owned by faith-based organizations for affordable
housing.The City could work with faith organizations to utilize their
excess land for affordable housing.The City could assist such
organizations with favorable zoning, permitting, and financial incentives.
NOTE: PPP is an "umbrella" strategy that overlaps significantly with other
strategies in this document(funding support for affordable housing,tax
incentives, community land trusts, etc.). Implementing a PPP strategy could take
many forms. In the final HPS, it will be important for the City to be clear about
the specific actions it will take to pursue and support PPPs for affordable
housing.
Considerations • The City is pursuing this strategy with several ongoing projects.This includes
partnering with the Sisters of Holy Names of Jesus and Mary and Mercy
Housing NW in facilitating the Marylhurst Commons affordable housing
development.
• PPPs are often opportunity-driven and may be spearheaded by the City or by
private developers or partner agencies.
• Cities are often asked to provide land,financial assistance, and or technical
assistance, with potentially moderate costs. More significant financial
assistance would depend on a new funding source,such as construction
excise tax.
PP 22-0005 ATTACHMENT 3/PAGE 11 OF 42
Anticipated • Housing Need Addressed: Government-subsidized affordable housing for
Impact low-income households.
• Population served: Low-income households
• Income level:0-80%AMI
• Benefits and Burdens:This strategy is intended to benefit low-income
households by increasing the City's involvement in development of
affordable housing.
No burdens on priority populations are anticipated for this strategy.
• Housing tenure: For rent or sale
• Magnitude: High—Partnerships with private developers or non-profit
housing agencies are very often a key component of a City contributing to
new housing production. Few City governments directly build housing.The
incentives and funding offered are aimed at these partners, who undertake
the projects often with a development agreement to ensure the public goals
are met.The magnitude of impact is high, and in a sense these partnerships
are necessary for most successful City-based housing initiatives.
Time Frame Implementation: Near Term
Impact:Timing of impact depends on the nature of the public/private
partnership. Given availability of funds, impact to housing production would be
expected to occur over the longer term.
Implementation • More clearly define the relationship to other HPS strategies and which types
Actions of actions would be proactively undertaken by the City vs more opportunistic
actions based on proposals from potential partners.
• Work with nonprofit,faith-based, or other organizations to discuss
opportunities in Lake Oswego.
• Take action on partnership models and programs that best benefit the
organization and the City's financial and/or administrative capacity.
• Partnership activities depend on the project, organization, and available
resources.
Lead & Partners Lead: Lake Oswego Community Development
Partners: Possibilities include landowners and organizations with excess land, as
well as nonprofit affordable housing providers.
1.6 Fair Housing policy and education (B14)
Description This strategy involves amending the Comprehensive Plan to explicitly make
Affirmatively Furthering Fair Housing a Housing Policy. Fair Housing laws protect
individuals in "protected classes" from housing discrimination. Protected classes
in Oregon include race, color, national origin, religion, disability, sex(includes
pregnancy), sexual orientation, gender identity, age, and marital status.The City
could add additional protected classes, such as ancestry, ethnicity, or occupation.
PP 22-0005 ATTACHMENT 3/PAGE 12 OF 42
The City could also pursue the following types of actions to affirmatively further
fair housing and work to reverse discrimination, exclusion, and concentrations of
wealth in Lake Oswego:
• Create an Analysis of Impediments to Fair Housing.
• Conduct fair housing training for Council, Planning Commission, and other
relevant policymakers.
• Provide residents, property owners, property managers, realtors, lenders,
and others involved with real estate transactions with access to fair housing
information and referrals.
• Ensure that City staff know how to identify potential fair housing violations
and make referrals to the Fair Housing Council of Oregon and state and local
enforcement agencies.
In addition, other strategies identified in this list can also generally serve the
purpose of affirmatively furthering fair housing to the extent they expand
housing opportunities or choices for people in protected classes.
Considerations • This strategy would not necessarily contribute to housing production except
when it is implemented through other strategies described in this document
that result in housing production. However, in all cases it would demonstrate
the City's commitment to working towards fair housing outcomes.
• Training and education would require staff time and resources to implement.
Anticipated • Housing Need Addressed:This strategy would not directly address identified
Impact housing needs in most cases, but it would help prevent housing
discrimination against protected classes.
• Population served: Protected classes
• Income level:All income levels
• Benefits and Burdens:This strategy is intended to benefit priority
populations by formalizing the City's commitment to fair housing goals,
better understanding fair housing issues in the community, and by educating
City staff, housing stakeholders, and community members about fair housing
laws and residents' rights.
No burdens on priority populations are anticipated.
• Housing tenure: For sale or rent
• Magnitude: Low—Fair housing policy and education will not directly
contribute to housing production, but it could provide additional protections
against housing discrimination. It could also bolster the City's focus on
prioritizing housing equity and affordability in its housing programs and
investments.
Time Frame Implementation: Near Term (Fair Housing Policy); Medium Term (other actions)
Impact: Impact on community understanding of fair housing can be in the short
term. Impact on fair housing outcomes is expected to be longer term.
Implementation • Policy adoption requires Legislative Comprehensive Plan text amendment.
Actions • Partner with organizations such as the Fair Housing Council of Oregon on
training.
PP 22-0005 ATTACHMENT 3/PAGE 13 OF 42
• Develop informational materials.
• Provide training to current staff and new hires.
Lead & Partners Lead: Lake Oswego Community Development
Partners: Fair Housing Council of Oregon
MEDIUM-TERM STRATEGIES
The project team's initial recommendation is to implement the following strategies over the Medium
Term (3-5 years after HPS adoption).
1.7 Rezone Land (Z02)
Description This strategy involves rezoning commercial, mixed-use, or other non-residentially
zoned properties for residential uses, especially multi-family housing. It could
also involve rezoning lower-density areas to allow higher-density housing.
The HNA identified a need for additional residential land across all zone types to
meet the 20-year housing need in Lake Oswego (a deficit of 86 total acres).As
such, there may be a need to add to the city's capacity of residential land to
meet the housing need. Rezoning is one way to help address this issue.
Considerations • If nonresidential land is considered for rezoning, it would be important to
ensure there is still adequate land available for employment and
commercial/industrial needs in the city. Lake Oswego's Economic
Opportunities Assessment identifies the city's future employment land
needs.
• In considering the most appropriate locations for City-initiated rezoning of
land, the following criteria or factors should be considered:
o Proximity to existing residential and higher-density areas.
o Proximity to services (e.g.,transit, schools, parks, etc.).
o Size and ownership—larger properties will be more attractive for
development.
• There may be neighborhood resistance to rezoning, especially"upzoning"
single-family residential areas.This strategy would need significant
community engagement.
Anticipated • Housing need addressed: Rezoning would address the shortage of land for
Impact housing, and the overall need for housing production in the city. Depending
on how it is implemented, this strategy could also address the shortage of
higher-density land by rezoning lower-density land.
• Population served: Low to higher income households
• Income level:All income levels
• Benefits and Burdens: Rezoning can increase the availability of land zoned
for residential development. Additional capacity for more housing
PP 22-0005 ATTACHMENT 3/PAGE 14 OF 42
development can include opportunities for multi-family housing that is
generally more affordable to low-and moderate-income households.
A potential burden from this strategy is the possibility of lower-income
households being displaced if rezoning leads to increased development
pressures or increased property values. Rezoning commercial areas, or
impacts of increased property values, can also lead to commercial
displacement of small businesses. Rising commercial rents or pressures to
redevelop for residential uses may have a larger impact on small-scale
entrepreneurs and immigrant or minority-owned businesses.The
characteristics of areas being considered for rezoning should be carefully
considered as part of implementation to avoid displacement impacts.
• Housing tenure: For rent or sale
• Magnitude: Moderate to High—The impact of rezoning might be relatively
high given the limited supply and high demand for buildable residential land
in the community.The effectiveness of rezoning will depend on the physical
and infrastructure characteristics of the rezoned land for residential use.The
density of housing under the new zone will also depend on the physical
constraints (e.g., steep slopes)that might limit the buildable portion of a site.
Time Frame Implementation: Medium Term
Impact: Land inside city limits will become available for development
immediately after rezoning. Land outside city limits can also be developed, but
will need to overcome the additional hurdle of annexation.The impact on
housing development is expected to be long-term.
Implementation • Use the criteria listed above to identify potential areas for rezoning. Prioritize
Actions sites with the best potential for housing production and access to services.
• Consider the demographic characteristics of potential rezoning areas to avoid
potential displacement impacts.
• Engage with property owners as well as the broader community in targeted
areas.
• Work with Lake Oswego's Planning Commission and City Council to adopt
Zoning and Comprehensive Plan Map amendments.
• City Council action: Legislative Zoning Map and Comprehensive Plan Map
amendment.
Lead & Partners Lead: Lake Oswego Community Development
Partners: Property owners
1.8 Evaluate accessible design incentives or mandates (A23)
Description This strategy involves evaluating incentives or mandates to increase
development of housing that is accessible for seniors and people with disabilities
or mobility challenges.
Potential incentives could include:
PP 22-0005 ATTACHMENT 3/PAGE 15 OF 42
• Bonuses for height, density, lot size, or floor area ratio (similar to Strategy
2.1).
• Tax abatements, e.g., MUPTE (see Strategy 2.4).
Potential mandates could include:
• Requiring visitability in middle housing development—this would ensure
that anyone using a wheelchair can visit the subject homes.Visitability is
most relevant for buildings with fewer than four units,townhouses, and
detached homes that aren't subject to ADA requirements.
• Requiring housing that receives public funding to provide more accessible
units or more universal design features than required under federal
standards.This could mean applying the standards to a higher percentage of
units than would otherwise be required (above 5%) and/or requiring units to
meet higher Universal Design or Lifelong Housing Certification standards.
• Requiring elevators in some or all multi-story buildings. Currently,the
Building Code only requires elevators to reach common spaces (such as
exercise rooms) or units that are federally required to be accessible.
Requiring elevators in one or more multi-family buildings would provide
access to all levels of that building. It would also make all units "covered"
units under the Fair Housing Act, meaning all units would need to have
baseline accessibility features.
Accessibility Standards. Eligible units (for either incentives or mandates) could
be required to meet certain standards—which would go beyond minimum
federal requirements or could target housing not subject to these requirements
(e.g., single-family homes and middle housing).2 Options include:
• Universal Design is a building concept that incorporates design layouts and
characteristics into residences to make them usable by the greatest number
of people and respond to the changing needs of the resident. Universal
Design incorporates standards for features such as hallways, doorways,
bathrooms, and kitchens that make these features usable for people with
disabilities or adaptable for that purpose.'
• Lifelong Housing Certification is a program developed by the Rogue Valley
Council of Governments (RVCOG) in partnership with AARP Oregon as a
voluntary certification process for evaluating the accessibility and/or
adaptability of homes. Residences can be certified at three levels based on
the extent of their accessibility: (1)Visitable (basic accessibility for visitors);
(2) Fully Accessible (accessible for a person in a wheelchair on the main
floor); and (3) Enhanced Accessibility(customized for specific accessibility
2 Multi-family developments are subject to the Fair Housing Act;for buildings with an elevator,all units must be
accessible;for those without an elevator,all ground floor units must be accessible. Housing projects receiving public
funding are subject to federal laws(Section 504 of the Rehabilitation Act of 1973 and/or Title II of the ADA),which
require 5%of units to be mobility-accessible.Source: Disability Law Handbook,Southwest ADA Center.
http://www.southwestada.org/html/publications/dlh/housing.html
3 Universal Design Standards, West Virginia Housing Development Fund. https://tinyurl.com/yx63h792
PP 22-0005 ATTACHMENT 3/PAGE 16 OF 42
needs).4
• Visitability is a design approach for new housing that allows anyone who
uses a wheelchair or other mobility device to visit the home.A visitable
home typically includes:
o A zero-step entrance;
o Wide interior doors; and
o A half bathroom on the main floor.
Considerations • This strategy would help address housing disparities for people with
disabilities and provide more options for aging in place.
• Strategies to promote accessible housing received support from the Middle
Housing Code Advisory Committee as part of the House Bill 2001 code
updates.
• Accessibility features can add to the cost of construction for a development,
which can make affordable housing projects less financially feasible.
Elevators, in particular, add significant cost to a project.
• While mandates may provide more accessible units,they could prevent
some affordable housing projects from being developed.
• Incentives must be calibrated effectively to be attractive to both a nonprofit
and for-profit developer.The benefit of using the incentive should outweigh
the costs associated with implementing accessible design features.
Anticipated • Housing Need Addressed: Housing for people with physical disabilities and
Impact mobility challenges.The HNA indicates that an estimated 8%of the
population of Lake Oswego, or 3,140 people, report having some form of
disability, including 2.9%with an ambulatory disability. However,the number
of people that would benefit from physical accessibility in housing—
especially amongst the senior population—likely exceeds these numbers.
• Population served: Seniors; people with disabilities
• Income level:All income levels
• Benefits and Burdens:This strategy is anticipated to benefit seniors and
people with disabilities by increasing the stock of accessible housing units in
the city. However, a potential trade-off of mandating accessibility features—
especially for subsidized housing—is that it would reduce the total number
of units that could be provided in a building (because bathrooms and other
areas would need to be larger). While this may provide more accessible
units, it could make some affordable housing projects less feasible.This
could be a potential burden on low-income households by limiting the
opportunity for production of housing they can afford. Incentive-based
strategies would not carry the same burden.This will be an important
consideration for implementation.
• Housing tenure: For rent or sale
Lifelong Housing Program, RVCOG. https://rvcog.org/home/sds-2/lifelong-housing-program/
PP 22-0005 ATTACHMENT 3/PAGE 17 OF 42
• Magnitude: Moderate—Depending on how the strategy is structured, it
could lead to production of a significant number of new units with
accessibility features. However, the strategy could also have the effect of
deterring housing production if requirements are too onerous.To improve
feasibility, requirements may be applied to some but not all of the units in
new multi-family development. New elevator requirements may significantly
deter new development, due to high cost.
Time Frame Implementation: Medium Term
Impact:The action can begin to have impact after it is implemented in the CDC
or adopted as a financial incentive.The impact on housing production is
expected to be longer-term.
Implementation • Code bonus.
Actions o Evaluate a potential new height/FAR bonus with input from housing
stakeholders.
o Consider whether a bonus should apply in all zones or only certain zones.
o A potential accessibility bonus should be carefully considered in
conjunction with any other potential bonus provisions (see Strategy 2.1).
o Implement via CDC updates.
• Code requirement.
o Evaluate potential new accessibility requirements, working closely with
non-profit and market-rate housing developers to understand how their
projects might be impacted.
o Conduct a pro forma analysis to evaluate potential impacts to project
costs.
o Implement via CDC updates.
• Financial incentive.
o Evaluate an incentive program (e.g., MUPTE,Strategy 2.4)to increase the
number of dwelling units designed accessibly.
o Work with developers to gather feedback on program parameters and
interest.
o Implement incentive program through Council action.
Lead & Partners Lead: Lake Oswego Community Development
Partners: Home Building Association of Greater Portland; Fair Housing Council of
Oregon;AARP; Rogue Valley COG; non-profit and for-profit housing developers.
1.9 Use Tax Increment Financing (TIF) to support affordable housing
development (D10)
Description This strategy involves using TIF funds to support affordable housing
development.This could involve creating one or more new TIF districts and
incorporating affordable housing into new TIF district plans. For example,the City
PP 22-0005 ATTACHMENT 3/PAGE 18 OF 42
could create a TIF set-aside for affordable housing development programs within
the district.
TIF is a funding mechanism in which future tax revenues in targeted
development or redevelopment areas (TIF districts/urban renewal areas) are
diverted to finance infrastructure improvements and/or development.
At the time of adoption,the tax revenue flowing to each taxing jurisdiction from
the TIF district is frozen at its current level. Any growth in tax revenues in future
years, due to annual tax increase plus new development, is the "tax increment"
that goes to the district itself to fund projects in that area.TIF is a good tool to
use in areas where new development or redevelopment is anticipated.
While many different types of projects are eligible for TIF funds,for the most
part,TIF funds are used to pay for physical improvements in the district itself.
These projects can include participating in public/private partnerships with
developers—including for affordable, workforce, or market-rate housing—or can
be used to complete off-site public improvements that benefit and encourage
new development in the area, or to acquire key sites.TIF funds also can be used
to purchase land.
TIF can be a direct source of funding for projects that meet public goals such as
providing affordable housing, increased density, or mixed-use buildings that
might not otherwise be feasible. In return for some public funding through TIF,
private sector or non-profit developers agree to provide these benefits. Urban
Renewal can also be used to purchase and reserve a key building site in the
district to ensure that the development that takes place there meets public
goals.The site can be offered to a development partner at reduced cost to
provide the incentive.
Considerations • There is direction from the Lake Oswego Redevelopment Agency(LORA)to
expand the use of urban renewal in the city—particularly in the Foothills
neighborhood.
• TIF results in foregone tax revenue for the City and any other overlapping
taxing districts for several decades, although it can (and should)grow the tax
base in the long-term by supporting development that would not otherwise
have occurred.
• If a new TIF district were established, it would likely be several years before
there would be sufficient revenue in the district to make significant
investment in housing.
• Coordination and agreement with other taxing districts is also important.
• There are many examples of the use of TIF revenue for housing-related
projects in Oregon.
o In the Downtown Tigard TIF district, projects include the Atwell Off-Main
project, which includes 165 market rate apartments, along with
commercial space; and the current mixed-use development underway on
Main Street near Fanno Creek, which will include a coffee roaster, office
space, and 22 new apartments.
o The City of Portland has participated in many housing projects in its
districts over decades. For instance, over the last decade Prosper
PP 22-0005 ATTACHMENT 3/PAGE 19 OF 42
Portland agency has contributed to the creation of hundreds of mostly
affordable and workforce housing units in multiple buildings in the Lents
Town Center.TIF also contributed to many of the early projects in the
Pearl District.
o The City of Beaverton Urban Renewal Agency's (BURA) budget allocates
$300,000 to $3.3M per year in tax increment set aside for joint
investment in affordable housing.This amounts to approximately 10%of
the City's 5-year URA budget.'
Anticipated • Housing Need Addressed: Government-subsidized affordable housing.
Impact • Population served: Low-income households
• Income level:0-80%AMI
• Benefits and Burdens:This strategy would primarily benefit low-income
households by increasing the City's capacity to support production of
subsidized affordable housing.
An intended outcome of urban renewal is increased property values and
redevelopment within the district. If not balanced by adequate investment in
housing production, urban renewal can lead to displacement of existing
residents facing increased property taxes and development pressures.This
can be a burden on existing low-income residents and should be considered
carefully when designating new TIF districts.
• Housing tenure: For rent or sale
• Magnitude: High—An extended TIF district or new programs focused on
housing have the potential to have a large impact on specific new projects
with LORA partners.The impact of an expanded TIF program on housing
production will depend on the revenue-generating potential of the district in
question and the prioritization of housing projects among the broader range
of projects eligible for urban renewal funding (e.g., general infrastructure
projects, beautification, economic development, etc.). If housing is
prioritized for funding, and development opportunities are available within
the district, it can directly bring about housing production.
Time Frame Implementation: Medium Term
Impact:Analysis and planning for a new TIF district can take several years. Once
a TIF district is established, it is expected to take several more years before
adequate revenues are accrued to begin spending the urban renewal funds.The
impact on housing production is expected over the medium or longer term.
Implementation • Evaluate the potential for creation of one or more new TIF districts.
Actions • Incorporate affordable housing into new district plans.
• City Council to adopt URA boundaries and plan via ordinance.
Lead & Partners Lead: Lake Oswego Redevelopment Agency
Partners: Development stakeholders
5 Beaverton BURA Annual Report and Five-Year Action Plan, 2020. https://www.beavertonoregon.gov/1017/The-
Beaverton-U rba n-Redevelopment-Agency
PP 22-0005 ATTACHMENT 3/PAGE 20 OF 42
1.10 Affordable Housing Preservation Inventory (F19)
Description Prepare an inventory of subsidized and naturally occurring affordable housing to
support proactive policies intended to preserve the affordable housing stock.The
inventory would be used to target potential properties for implementation of an
affordable housing preservation strategy.
Considerations • This strategy could help offset some of the need for costly new construction.
• The strategy would be a good starting point for a housing preservation
strategy(Strategy 3.4). Understanding the city's stock of affordable housing
could influence decision-making and prioritization for a preservation
strategy.
• The strategy would require staff time and resources to implement.
Anticipated • Housing Need Addressed: Housing for low-income residents.
Impact • Population served: Low-income households
• Income level:0-80%AMI
• Benefits and Burdens:This strategy is expected to benefit low-income
residents by evaluating the city's stock of naturally occurring affordable
housing, in support of a low-cost housing preservation strategy.
No burdens on priority populations are anticipated.
• Housing tenure: For sale or rent
• Magnitude: Low—This strategy will not contribute to new housing
production, but it will contribute to the preservation of existing affordable
housing, and aids in tracking performance metrics.
Time Frame Implementation: Medium Term
Impact:This strategy can provide information and influence decision-making
about housing preservation in the shorter term. However, impacts to the city's
housing inventory are expected to be longer term.
Implementation • Use Census data as a starting point.
Actions • Work with property owners to document housing costs.
• Update inventory on a regular basis.
Lead & Partners Lead: Lake Oswego Community Development
Partners: Property owners
LONGER-TERM STRATEGIES
The project team's initial recommendation is to implement the following strategies over the Longer Term
(>5 years after HPS adoption).
PP 22-0005 ATTACHMENT 3/PAGE 21 OF 42
1.11 Modify System Development (SDC) fee schedule (CO2)
Description SDCs are one-time charges assessed on new development to pay for the costs of
expanding public facilities to serve new development.The City of Lake Oswego
charges SDCs for water, sewer, parks, and transportation.The Lake Oswego
School District also charges a construction excise tax(effectively an SDC) for new
construction in the city(except for affordable housing).
This strategy involves updating the City's SDC fee schedule so it is tied more
directly to dwelling size. Currently, the City charges the same rates for all single-
family homes regardless of size. Each unit of a duplex is also charged the same
single-family fee. Multi-family housing (3 or more units) is charged a lesser fee
per unit.'
Scaling SDC fees to dwelling size would better match a development's charges to
its actual cost or impact on the system. Smaller housing units, including some
middle housing types,typically have less impact on water, sewer, or
transportation facilities,given the reduced average size and occupancy of these
units.This is not fully reflected in Lake Oswego's current SDC schedule, although
the current schedule does include lower fees for multi-family housing units.
The City could consider charging fees on a per-square-foot basis, rather than per-
unit.
Considerations • This strategy would reduce barriers to construction of more affordable,
smaller-scale homes, including small single-family homes and middle
housing.
• The City sets its SDC fee schedule based on projected needs for system
construction and improvements. Modifying the SDC methodology would
likely increase fees for larger homes to make up for the reduced fees for
smaller units.
• Notes on current SDC strategies:
o The City has already adopted regulations to waive SDCs for income-
restricted affordable housing (80%or less of AMI) and for accessory
dwelling units.
o As part of the current Parks Plan 2040 update project (completion
expected in 2025),the City will consider modifying its Parks SDCs to be
scaled by housing unit size.That could provide a jumping off point and a
model for a larger discussion about SDC schedules and potential future
refinements to SDCs for other services.
Anticipated • Housing need addressed:This strategy will facilitate development of smaller,
Impact more attainable housing units that may be affordable to moderate-income
and smaller households.The HNA indicates that 16%of new needed housing
units over the next 20 years will be needed by those earning 80-120%AMI.
• Population served: Moderate to higher income households;first-time
homebuyers; single or two-person households; seniors
6 Lake Oswego Master Fees and Charges, 2024. https://www.ci.oswego.or.us/finance/master-fees-and-charges
PP 22-0005 ATTACHMENT 3/PAGE 22 OF 42
• Income level: 80%AMI and above
• Benefits and Burdens:This strategy can increase production of smaller and
lower-cost units which may benefit lower-income households, but is more
likely to benefit moderate-or higher-income households. Smaller unit sizes
may be of particular benefit to seniors due to lower maintenance and lower
housing costs.
No burdens on priority populations are anticipated. However, reducing SDCs
for smaller units would likely need to be offset by increased SDCs for larger
units,the cost of which would be passed onto homebuyers. It is anticipated
that homebuyers that can afford larger units likely can also afford the
increased cost.
• Housing tenure: For rent or sale
• Magnitude: Low to Moderate—Given current SDC incentives already
available,this tool may have a low to moderate impact in incentivizing
additional housing units. It may incentivize some projects to produce a
greater number of marginally smaller units,thus increasing density and unit
production somewhat.
Time Frame Implementation: Longer Term
Impact:The process of modifying a city's SDC methodology can be lengthy, as it
is necessary to analyze projected needs for system construction and
improvements and ensure that SDC revenues will be adequate to meet projected
needs. Once a new SDC schedule is implemented,the impact to housing
development is expected to be longer-term.
Implementation • Work with City Council, other departments (Public Works, Finance, Parks,
Actions etc.), and development stakeholders on policy discussions around modifying
SDCs.
• Potentially work with a consultant to develop an updated SDC methodology.
• City Council action: Adopt modified SDC schedule by resolution or ordinance.
Lead & Partners Lead: Lake Oswego Engineering
Partners: Development stakeholders
1.12 Pre-Approved plan sets for ADUs (A21)
Description Pre-approved (or permit-ready) plan sets have been reviewed in advance for
conformance with zoning and building codes. Permit-ready plan sets can reduce
housing development costs by reducing design and permit process times and
fees.This strategy could be used to encourage more development of accessory
dwelling units (ADUs) or middle housing types (see Strategy 2.5).
Permit-ready plans can reduce costs in three main ways:
• Streamlining permit processes—Permitting times are frequently cited by
market-rate builders as a major barrier to housing production, as delays
in permitting often translate into increased costs.
PP 22-0005 ATTACHMENT 3/PAGE 23 OF 42
• Reducing permit fees—The Building Department may decrease permit
review charges for applicants because of the simplified review.
• Reducing design fees—The builder would pay less in professional
services to architects, etc.
ADUs are a type of housing located on the same lot (and sometimes in the same
structure) as a primary dwelling unit.They are generally smaller in size compared
to the primary home and come in a number of different configurations. In Lake
Oswego,there may be one ADU per primary home. ADUs offer opportunities for
multigenerational living, with family members living on the same site but in a
separate dwelling.ADUs can also be rented out, allowing the homeowners to
supplement their income.
Considerations • This strategy potentially lowers site and building design costs,which could
lead to an increase in new ADU units and increase rental stock.
• There are upfront costs associated with developing the pre-approved plans,
including paying design fees for architects that develop the base plans, and
dedicating staff time for working with the architects and reviewing the plans.
• The City could partner with a university, design institution, or develop a
competition to produce plans.
• ADUs may be a better candidate for this program due to their small size and
relative simplicity(as compared to middle housing, which may require more
customization).Also, homeowners wanting to build an ADU may be more
interested in pre-made designs than experienced homebuilders.
Anticipated • Housing Need Addressed: Increased housing choices within existing
Impact neighborhoods. Increased rental opportunities. Options for
multigenerational housing. Opportunities for aging in place.
• Population served: Moderate to higher-income households; seniors; people
with disabilities; multigenerational households; renters
• Income level: Likely 80%AMI and above
• Benefits and Burdens:ADUs are a popular choice for elders who wish to live
on the same property as their children/grandchildren (ADUs are sometimes
referred to as "granny flats"). As such,this strategy can offer benefits to
seniors and multigenerational households. Because ADUs are often single-
level, small homes,they may also benefit people with disabilities—with the
potential added benefit of enabling family to live nearby for assistance and
support.
No burdens on priority populations are anticipated.
• Housing tenure: For rent
• Magnitude: Moderate—This strategy would likely lead to more development
of ADUs in the city. Pre-approved plans can lower the logistical barriers for
prospective ADU builders, and can be paired with a faster, cheaper
permitting process.This could increase the number of available rental
properties and increase housing choices in existing developed
neighborhoods. However,the strategy would have a limited impact on
overall housing supply.
PP 22-0005 ATTACHMENT 3/PAGE 24 OF 42
Time Frame Implementation: Longer Term
Impact:The action is expected to have impact over the longer term.
Implementation • Develop ADU plans in collaboration with one of the partners listed below.
Actions • Work with the Building Department to ensure plans meet all City Code
standards, approve the plans, and adopt reduced fees for the plans.
• Work with the Building Department to implement a streamlined review
process.
Lead & Partners Lead: Lake Oswego Community Development (including Building Department)
Partners: Universities, design institutions, and/or design firms
PP 22-0005 ATTACHMENT 3/PAGE 25 OF 42
2. Strategies Needing Further Discussion
The following strategies need further discussion by the HPS Task Force, Planning Commission, and City
Council before the project team can make a recommendation as to whether they should be included in
the HPS.These strategies have not yet received clear support from these bodies, but are expected to
have a meaningful impact on housing production.
2.1 Zoning incentives for affordable housing (A03)
Description This strategy involves allowing additional height, density, bonus floor area ratio
(FAR), or relaxing other zoning standards for affordable housing.
The City currently allows a limited height or density bonus for affordable
developments in the WLG-OC and R-DD zones.The City could consider modifying
the bonus, expanding it to apply in more zones, or adopting new bonuses, such
as reduced open space for affordable housing.
Considerations • Zoning incentives likely would not incentivize private developers to include
affordable units in their projects.These types of bonuses typically don't lead
to mixed-income development on their own unless the base entitlements
are very low and there's a lot of demand for more density.
• Incentives would more likely be a way to allow affordable developers to
make more efficient use of land and potentially better compete for land with
market-rate developers. Non-profit housing providers have indicated that
such bonuses can be very effective in improving the financial feasibility of
their developments.
• Senate Bill 8 (2021 session, encoded as ORS 197A.445) requires cities to
allow affordable housing that meets specific criteria on a wide range of sites
and provides height and density bonuses. If the height/density bonus
exceeds local bonuses for affordable housing,the SB 8 bonus will apply
directly. Potential bonus provisions in Lake Oswego could be crafted to be
consistent with or go above and beyond SB 8 requirements.
Anticipated • Housing need addressed: Government-subsidized affordable housing for
Impact low-income households.The HNA indicates that 30%of future needed
housing units by 2043 will be needed by low-,very low-, or extremely low-
income households, and also identified a current gap in supply of affordable
units.
• Population served: Low-income households
• Income level:0-80%AMI
• Benefits and Burdens:This strategy would benefit low-income households
by increasing the feasibility of affordable developments, thereby enabling
more such projects to be built and potentially enabling more units to be
included within each project.
No burdens on priority populations are anticipated.
• Housing tenure: For rent or sale
PP 22-0005 ATTACHMENT 3/PAGE 26 OF 42
• Magnitude: Low to Moderate—This strategy might lead to a small percent
increase in the number of units that are possible for affordable housing
developments.This incentive may help increase affordable production in
projects that are already being pursued but is unlikely to initiate new
projects on its own. While the developer and property manager must
demonstrate compliance, the administrative burden should be kept to a
minimum to reduce added time and cost, both for the applicant and the City.
Time Frame Implementation:To be determined based on further discussion
Impact:The action can begin to have impact after it is implemented in the CDC.
The statutory bonuses under SB 8 (ORS 197A.445) are already available.The
impact on supply of affordable housing is expected to be longer-term.
Implementation • Consult with affordable housing providers to determine what type(s) of
Actions incentives would be most beneficial in supporting their work.
• Evaluate SB 8 to determine how the statutory bonuses compare to the
potential new bonuses.
• City Council Action: Implement through CDC updates.
Lead & Partners Lead: Lake Oswego Community Development
Partners:Affordable housing providers
2.2 Construction Excise Tax (CET) (D09)
Description CET is a one-time tax on construction projects and is a potential funding source
for affordable housing. Cities and counties may levy a CET on residential
construction for up to 1%of the project's permit value; or on commercial and
industrial construction with no cap on the rate of the CET.
The allowed uses for CET funding are defined by state statute'and can include
support for a variety of housing-related projects and programs.
• Residential CET revenues must be allocated as follows:
o Up to 4%can be used to cover administrative expenses incurred
from implementation of the CET.
o 50% must be spent on developer incentives (e.g., permit fee and SDC
reductions,tax abatements, or finance-based incentives).
o 35% may be used flexibly for affordable housing programs.
o 15%flows to Oregon Housing and Community Services (OHCS)for
homeownership programs. OHCS's policy is to spend the revenue in
communities where it's collected.
• Commercial/industrial CET has fewer restrictions on how revenues are
spent:
o 50% must go towards housing-related programs (not necessarily
limited to affordable housing).
o 50% is unrestricted and can be used as the City sees fit.
Oregon Revised Statutes 320.192-195.
PP 22-0005 ATTACHMENT 3/PAGE 27 OF 42
Some cities have used CET to pay for gap financing of new affordable
development, backfilling SDC waivers, acquisition of properties for affordable
housing preservation, and down payment assistance for first-time homebuyers.
As an example,the City of Eugene adopted a CET in 2019, and has used $2.2
million in revenues to leverage $45 million to fund the construction of 178 new
affordable homes.'
Additional examples are detailed in Appendix A: CET Supplemental Memo.
Considerations • CET is one of the few available sources of the few available locally-controlled
funding streams for affordable housing.
• Several other strategies under consideration for the HPS would depend on
adoption of a new funding source (see Section 3. Contingent Strategies,
below). Without a new funding stream, the City could not participate
meaningfully in those strategies.
• CET is a tax on development, meaning that it raises costs for construction of
commercial, industrial, and/or market-rate residential housing.The statute
exempts regulated affordable housing, public buildings, hospitals, and certain
other types of facilities.
The City can also choose to exempt other types of development(e.g.,
multi-family housing, accessible housing,or small housing units) or exclude
residential development altogether. For example,the City of Tigard exempts
ADUs of 1,000 sq ft or less and projects valued at less than $50,000; and
allows cottage clusters, courtyard units, and quadplexes to be exempted
from 75%of the CET.'
• Alternatively, by structuring a policy with offsetting incentives or tools for
housing to reduce development barriers,the City could potentially limit the
impact on feasibility for certain housing projects.This strategy can be paired
with other complementary strategies to increase its effectiveness.
• Because CET revenue is development-derived, it will fluctuate with market
cycles.
Anticipated • Housing need addressed: Government-subsidized affordable housing for
Impact low-income households. CET implementation can be tailored to prioritize
certain income levels or other housing needs, such as extremely low-income
households (earning below 30%AMI) or residents needing housing with
wrap-around support services.
• Population served: Low-income households
• Income level:0-80%AMI
• Benefits and Burdens:This strategy would primarily benefit low-income
households by increasing the City's capacity to support production of
subsidized affordable housing and other housing programs. Because CET
funds offer flexibility for the local government to choose which projects and
$ City of Eugene,Affordable Housing Trust Fund. https://www.eugene-or.gov/4232/Affordable-Housing-Trust-Fund
9 Tigard Municipal Code, Chapter 3.90 Construction Excise Tax.
https://library.gcode.us/lib/tigard or/pub/municipal code/item/title 3-chapter 3 90
PP 22-0005 ATTACHMENT 3/PAGE 28 OF 42
programs to support,the City has opportunities to direct funding toward
projects that benefit priority populations that need additional support.
A CET has the potential to inhibit some development, including housing
development(if a residential CET is pursued). However,the City has options
to avoid impacts to the types of housing most needed by priority
populations, thereby limiting burdens on these communities.Affordable
housing already must be exempt. As noted above,the City could also exempt
multi-family housing, small units,ADUs, housing that meets Universal Design
criteria, and other types.This is a way to address or mitigate potential
burdens.
• Housing tenure: For rent or sale
• Magnitude: High—The revenue potential of a CET in Lake Oswego is
potentially quite high. Over the last five years,the value of residential
construction and addition permits, including mixed-use projects, has totaled
over$385M, or an average of$77M per year.Applying a standard 1%CET to
this activity could have generated as much as$750k per year for a CET
housing fund.A CET applied to commercial permits, which includes multi-
family development, could generate an even greater$850k per year to a
housing fund, based on the five-year average. (See Appendix A: CET
Supplemental Memo for a more detailed analysis of revenue potential.)
The CET is a tax on new development activity, and thus has the impact of
raising costs on developers.
Time Frame Implementation:To be determined based on further discussion
Impact:This strategy may take several years for funds to accumulate to an
amount that could be used to support development of housing. However, cities
that have adopted a CET have seen real results in terms of housing production
within 4 to 5 years. See above for the City of Eugene example.
Implementation • Evaluate a potential approach. Include projections of potential revenue and
Actions determine what programmatic goals could be accomplished with revenue.
Consider both residential and commercial/industrial options.
• Analyze potential impacts to development.
• Engage with the development community—including both housing providers
that could benefit from CET funds, and developers that might be impacted by
the tax.
• City Council could impose the CET by adoption of an ordinance or resolution
that conforms to the requirements of ORS 320.192—ORS 320.195.
• If directed, create a plan for the use of CET funds, in collaboration with
housing providers, low-income communities, and other historically
marginalized communities.
Lead & Partners Lead: City of Lake Oswego Community Development
Partners: Finance Department; local developers; non-profit housing partners
could implement funded programs
PP 22-0005 ATTACHMENT 3/PAGE 29 OF 42
2.3 Vertical Housing Development Zone Tax Abatement (E03)
Description This abatement is intended to incentivize multi-story mixed-use development
and affordable housing in targeted areas.To qualify, a project must have
improved, leasable, non-residential development on the ground floor and
residential development on the floors above.The program allows a 10-year
partial property tax exemption of 20% per floor(and up to 80%total)for mixed-
use developments within the designated Vertical Housing Development Zone
(VHDZ).
The exemption is only allowed for the improvements to the property(not the
land itself), unless the development provides low-income housing; in that case,
the land can also be exempted from property taxes at the same rate as the
improvements (on a per-floor basis).The low-income units must remain
affordable for at least as long as the length of the tax exemption.The tax
exemption is available for both new construction and rehabilitation projects.
(Authorized by ORS 307.841-867)
Considerations • A pilot VHDZ project was recently approved for the North Anchor
development site.The City could consider a more broadly-applicable
program in an area (or areas) where it wants to encourage mixed-use
development.
• As mentioned above under Strategy 1.3, the City and participating taxing
districts will lose property tax income for the duration of the tax exemption,
reducing revenue for City services and revenue for participating taxing
districts. Some taxing districts expressed some resistance to the pilot VHDZ
proposal at North Anchor due to this reduction in revenue, particularly as the
VHDZ program is intended to produce market-rate housing.
• VHDZ has the potential to displace residents by encouraging redevelopment
in certain areas. Per state law, a city must consider the potential for
displacement of households within a proposed VHDZ before designating the
zone.
Anticipated • Housing need addressed:This strategy has the potential to increase
Impact development of high-density housing in targeted areas of the city.
Stakeholders in the HPS process identified a particular need for more multi-
family housing outside the Town Center.
• Population served: Low-income to higher-income households
• Income level:All incomes
• Benefits and Burdens:This strategy is expected to primarily benefit
moderate or higher income households, rather than low-income
populations, because developers are not required to include affordable units
to take advantage of a VHDZ. However,the extra exemption for affordable
units may incentivize developers to include those units,thereby benefiting
low-income populations. Further, increasing housing options in mixed-use
areas with good access to services has the potential to benefit various
populations, including seniors looking to downsize and people with
disabilities who do not drive.
PP 22-0005 ATTACHMENT 3/PAGE 30 OF 42
As noted above, VHDZ has the potential to displace residents by encouraging
redevelopment in certain areas—which could burden low-income
households. Equity considerations, such as a displacement risk analysis and
anti-displacement measures, should be part of implementation for this
strategy.
• Housing tenure: For rent or sale
• Magnitude: Low to Moderate—This abatement may have a lower impact on
new housing production than the low-income housing tax incentives because
mixed-use housing tends to produce fewer units, and also because this
program is more complicated for the City and applicants. If there are key
districts where the City would like to incentivize more vertical buildings and
mixed-use,this may be appropriate. If multiple programs are available,the
VHDZ may compete poorly with more attractive and easier to use tax
incentives.
Time Frame Implementation:To be determined based on further discussion
Impact:The tax exemption can be used once it is adopted, and for as long as the
City offers the exemption.The impact on housing supply is expected to be
longer-term.
Implementation • Define VHDZ geography(ies).Analyze displacement risk and consider anti-
Actions displacement strategies as part of this process.
• Work with other taxing jurisdictions to gain approval.
• City Council action: Adopt tax exemption program by resolution or
ordinance.
Lead & Partners Lead: Lake Oswego Community Development
Partners: Lake Oswego Finance Department; overlapping taxing jurisdictions
2.4 Multiple Unit Property Tax Exemption (MUPTE) (E04)
Description This exemption can be used to encourage multi-family or middle housing with
particular features or at particular price points by offering qualifying
developments a partial property tax exemption for 10 years (or longer,for
housing subject to affordability agreements). It can be offered to new
development or existing housing that is converted to meet the eligibility criteria.
MUPTE is a flexible tax abatement that can be used in various ways to encourage
needed housing.The City has broad discretion as to how to structure the
program. Eligibility criteria could include requirements for affordability,
accessibility/universal design, unit size, or other desirable features.
The City must designate specific areas where the MUPTE applies, unless
including affordability as a criterion, in which case the whole city could be
eligible.
(Authorized by ORS 307.600-637)
PP 22-0005 ATTACHMENT 3/PAGE 31 OF 42
Considerations • Could incentivize multi-family developers to incorporate desirable features in
their projects, such as accessible units or family-size units. Affordability to
lower-income households could also be an eligibility criterion, if desired.
• As noted below,this strategy could outcompete affordable housing tax
incentives with for-profit developers who would rather build market-rate
housing in some cases.
Anticipated • Housing Need Addressed:This strategy has the potential to increase
Impact development of multi-family housing in targeted areas of the city.
Stakeholders in the HPS process identified a particular need for more multi-
family housing outside the Town Center. Depending on how it is structured,
this program could also encourage apartments with family-sized units (2-3
bedrooms) and accessible housing options for seniors—both of which were
also identified by stakeholders as gaps in the local market.
• Population served: Depends on how the program is structured; could be
targeted to benefit low-income households, people with disabilities, larger
families, etc.
• Income level: Depends on how the program is structured.
• Benefits and Burdens:This strategy has the potential to benefit various
priority populations by encouraging housing needed by those communities
(accessible units,family units, affordable units, etc.).The City could also
target a MUPTE program to specific geographies to target housing
development in neighborhoods where it is most needed.A challenge for the
City will be to determine how best to balance those various needs to
determine what housing types or features are most appropriate to include as
criteria for the MUPTE abatement.This should be considered in the broader
context of the HPS to ensure that the City's actions benefit all priority
populations in equitable ways.
No burdens on priority populations are anticipated for this strategy, provided
it is implemented in the ways described above.
• Housing tenure:Typically for-rent.
• Magnitude: Moderate—This strategy could encourage production of more
multi-family units that meet housing needs not currently being met by the
private market. However this program does not necessarily require the
provision of affordable housing;therefore, it may outcompete affordable
housing tax incentives with for-profit developers who would rather build
market-rate housing.This program should be carefully considered as
competitive with the low-income tax exemptions. However,the MUPTE can
also be designed to require affordable units as well.
Time Frame Implementation:To be determined based on further discussion
Impact:The MUPTE can be used once it is adopted, and for as long as the City
offers the exemption.The impact on housing supply is expected to be longer-
term.
Implementation • Further evaluate the various options for structuring the MUPTE program to
Actions determine whether—and how—it should be implemented.
PP 22-0005 ATTACHMENT 3/PAGE 32 OF 42
• Consult with developers and housing providers to determine their level of
interest.
• Determine desired eligibility criteria (e.g., affordability, accessibility, etc.).
• Seek input from overlapping taxing districts on their willingness to support
the exemption.
• City Council Action: Adopt tax exemption program by resolution or
ordinance.
Lead & Partners Lead: Lake Oswego Community Development
Partners: Lake Oswego Finance Department; overlapping taxing jurisdictions
2.5 Pre-approved plan sets for middle housing typologies (A20)
Description The pre-approved plan sets strategy discussed above (Strategy 1.12) could also
be used to encourage more development of middle housing typologies, such as
duplexes, triplexes, and cottage clusters.
Considerations • This could help attract developers that typically develop only single-family
housing to get involved.
• Middle housing builders have expressed support for this strategy and believe
it would be frequently used and would cut down on costs.
• A potential consequence is too much architectural uniformity.
• Template plans may not work on all lot layouts or provide enough personal
design flexibility, so they would not be appropriate for all projects. Lake
Oswego has significant topography and often requires customized designs, so
template plans for middle housing may be less feasible.
• See other considerations under Strategy 1.12, Pre-Approved Plan Sets for
ADUs.
Anticipated • Housing Need Addressed: Increased housing choices, including
Impact homeownership options.
• Population served: Moderate to higher-income households
• Income level: Likely 80%AMI and above
• Benefits and Burdens:This strategy is expected to primarily benefit
moderate-or higher-income households, rather than low-income
populations. However,the strategy may support more affordable
homeownership opportunities via middle housing development—thereby
increasing the overall stock of attainable ownership housing available in the
community.This has the potential to benefit people of color and other
households that have faced systemic barriers to homeownership. Middle
housing types with smaller footprints can also benefit seniors looking to
downsize.
Potential burdens from this strategy are that facilitating middle housing
development could increase likelihood of demolition of older low-cost
homes and displacement of low-income residents.This strategy should be
PP 22-0005 ATTACHMENT 3/PAGE 33 OF 42
paired with a displacement risk analysis and potentially displacement
mitigation measures to support low-income residents as well as inclusive
engagement, home repair assistance, and other programs that support low-
income homeowners.
• Housing tenure: For sale or rent
• Magnitude: Moderate—This strategy would likely lead to more development
of middle housing in the city.The cost savings to builders wouldn't
necessarily translate to reduced sale prices or rents, but would have the
potential to deliver more housing. In addition, many forms of middle housing
will have a lower market-rate price point than detached single-family
housing.
Time Frame Implementation: Longer Term
Impact:The action can begin to have an impact after the permit-ready plans are
pre-approved and made available to builders.
Implementation • Evaluate which housing type(s)to adopt plans for and which programmatic
Actions approaches to pursue.
• Develop middle housing type plans in collaboration with one or more of the
partners listed below.
• Work with the Building Department to ensure plans meet all City Code
standards, approve the plans, and adopt reduced fees for the plans.
• Work with the Building Department to implement a streamlined review
process.
Lead & Partners Lead: Lake Oswego Community Development (including Building Department)
Partners: Universities, design institutions, and/or design firms
3. Contingent Strategies
The following strategies describe various ways that the City could allocate funds to support affordable
housing production or preservation. Each of these strategies are contingent on adoption of a new
funding source, such as Construction Excise Tax,for the City to participate meaningfully. Currently,the
City has very little in the way of uncommitted resources that it can use to support affordable housing.
3.1 Housing Trust Funds (D03)
Description Housing Trust Funds are a public sector tool used to direct financial resources to
support a variety of affordable housing activities. Housing Trust Funds are not
revenue sources themselves, but rather are tools for consolidating revenue,
planning for how the funds are spent, and directing them to housing programs.
A Construction Excise Tax could be a potential revenue source (see Strategy 2.2).
Other sources could include the City's general fund,TIF funds, state grant
funding, and/or other types of taxes or fees. For example,the City of Ashland
PP 22-0005 ATTACHMENT 3/PAGE 34 OF 42
dedicates a portion of its local marijuana sales tax to fund Ashland's Affordable
Housing Trust Fund.1°
Considerations • Provides flexibility for opportunity-based investment. However, some
funding sources (e.g., CET) have requirements for how funds are spent.
• Takes time to accumulate enough to make a difference and requires
consistent investment with a long-term outcome perspective.
• Relies on identifying a sustainable funding source with sufficient revenue to
have impactful contributions.
• There is potentially a high cost to seed the program.
Anticipated • Housing Need Addressed: Government-subsidized affordable housing.
Impact • Population served: Low-income households
• Income level:0-80%AMI
• Benefits and Burdens:This strategy would primarily benefit low-income
households by increasing the City's capacity to support production of
subsidized affordable housing and other housing programs. Because Housing
Trust Funds offer flexibility for the local government to choose which
projects and programs to support,the City has opportunities to direct
funding toward projects that benefit priority populations that need
additional support.This could include extremely-or very-low income
residents and those needing wraparound support services.
No burdens on priority populations are anticipated.
• Housing tenure: For rent or sale
• Magnitude:The amount of housing production depends on the funds raised
and contributed through these resources. See Strategy 2.2 (CET)for further
evaluation. In and of itself,the strategy does not result in production of
units.
Time Frame Implementation:To be determined based on further discussion. Contingent on
adoption of a new revenue source.
Impact:This strategy may take several years for funds to accumulate to an
amount that could be used to support development of housing.
Implementation • Identify a potential funding source (or sources).
Actions • Identify priorities for how funds will be spent.
• Continuously fund a Housing Trust Fund.
Lead & Partners Lead: Lake Oswego Community Development
Partners: Nonprofit affordable housing providers
10 City of Ashland, Housing Trust Funds. https://www.ashland.or.us/page.asp?navid=10828
PP 22-0005 ATTACHMENT 3/PAGE 35 OF 42
3.2 Low-interest loans/Revolving loan fund (D13)
Description This strategy would provide low-interest loans or revolving loans for affordable
housing production, preservation, or maintenance activities.
Housing Repair and Weatherization Assistance is offered to low-income
households through various County governments—the City could contribute
funding for use within Lake Oswego.
An example of offering loans for housing production is the City of Tigard's Middle
Housing Revolving Loan Fund.This fund was created by the Tigard City Council in
2021, using funds from the American Rescue Plan Act, and was made available in
September 2023.The fund is managed by the Network for Oregon Affordable
Housing, Craft3, and the Community Housing Fund, and will provide short-term
construction lending to developers building middle housing.At least 30 percent
of the units must be made available to lower-income buyers participating in
down payment assistance programs.
Considerations • Opportunities depend on what type of loans are offered.
• Loans for home repair could help prevent displacement by assisting existing
low-income residents remain in their homes.
• Loans for affordable housing development could help non-profit developers
bridge gaps in construction lending.
Anticipated • Housing Need Addressed: New or rehabilitated housing for low-income
Impact households.
• Population served: Low-income households
• Income level:0-80%AM I
• Benefits and Burdens:This strategy would primarily benefit low-income
households by increasing the City's capacity to support production or
preservation of affordable housing, or to contribute to programs that
promote housing stability for low-income residents.
No burdens on priority populations are anticipated.
• Housing tenure: For rent or sale
• Magnitude: High (if funded via a new revenue source; else Low)—This
strategy can be used to participate in public/private partnerships and
administer the types of programs discussed in previous sections.The benefit
of this program is that it regenerates funding as loans are repaid to be used
again on future projects. For developers who need financing for their
projects (which is almost always the case), offering lower-interest loans that
may have other favorable terms can have a large impact on the feasibility of
a development, as interest rates are a significant cost factor over time.
Time Frame Implementation:To be determined based on further discussion. Contingent on
adoption of a new revenue source.
Impact:The impact on housing production or preservation is anticipated to be
longer term.
PP 22-0005 ATTACHMENT 3/PAGE 36 OF 42
Implementation • Identify a potential funding source (or sources).
Actions • Identify priorities for how funds will be spent.
• Develop loan programs, potentially in partnership with lending institutions.
Lead & Partners Lead: Lake Oswego Community Development
Partners: Housing developers and providers; Clackamas County and other
organizations offering home repair and weatherization services
3.3 Community Land Trusts (F03)
Description Community land trust (CLT) is a model wherein a community organization owns
land and provides long-term ground leases to low-income households to
purchase homes on the land, agreeing to purchase prices, resale prices, equity
capture, and other terms.This model allows low-income households to become
homeowners and capture some equity as the home appreciates, but ensures
that the home remains affordable for future homebuyers.
Proud Ground is an example of a CLT working in the region. Proud Ground
partners with other organizations to build the homes,then manages the sales,
ground leases, and other programs.
Habitat for Humanity uses a similar approach to CLT to maintain the affordability
of the homes it builds—largely through volunteer labor and limiting resale prices,
while allowing owners to accrue home equity. Portland Region Habitat for
Humanity is the local affiliate organization.
Cities can support CLT and other models for affordable homeownership by
providing land, grants/loans, direct funding, or leveraging state/regional
resources.
Considerations • Dependent on partnership,funding stream, and land acquisition.
• Financing the initial acquisition of land and securing enough equity to scale
the strategy are key challenges for the CLT model.Across the country, land
trusts use a variety of land acquisition mechanisms,from private financing
and municipal subsidies to relationships with land bank entities.
• CLTs are unlikely to produce substantial unit numbers unless significant
resources are raised from a broad mix of funding partners, but they can
provide permanent affordability of the units they develop.The City's funds
can help to leverage investments from other partners.
Anticipated • Population served: Low-income households
Impact • Income level:0-80%AMI
Benefits and Burdens: In addition to benefitting low-income households,
depending on how it is administered,this strategy has the potential to
benefit communities that have faced structural barriers to homeownership—
particularly people of color and other marginalized communities.
No burdens on priority populations are anticipated.
• Housing tenure: For sale
PP 22-0005 ATTACHMENT 3/PAGE 37 OF 42
• Magnitude: Moderate (if funded via a new revenue source; else Low)—The
effectiveness and impact of CLT programs is highly reliant on the partner who
is developing and administering the property. Another factor is the
availability of residential building sites large enough to accommodate
multiple housing units, though CLT model can be applied to small
developments as well. Cities can provide entitlements, incentives, and
perhaps funding to the development partner(usually a non-profit agency).
This is one of the few models to provide lower-cost ownership opportunities
as opposed to rental opportunities.
Time Frame Implementation:To be determined based on further discussion. Contingent on
adoption of a new revenue source.
Impact:Timing of impact depends on partnership opportunities with a CLT. Given
availability of funds, impact to housing production would be expected to occur
over the longer term.
Implementation • Work with CLTs to discuss opportunities in Lake Oswego.
Actions • Take action on partnership models and programs that best benefit the
organization and the City's financial and/or administrative capacity.
• Potentially provide on-going financial support through development/
rehabilitation grants, homeownership grants/loans, donation of City-owned
land, and/or an annual funding set-aside.
Lead & Partners Lead: Lake Oswego Community Development
Partners: Proud Ground, Habitat for Humanity, and/or other nonprofit
developers of for-sale units
3.4 Preserving low-cost rental housing to mitigate displacement
(F05)
Description This strategy involves preventing displacement and preserving "naturally
occurring" affordable housing through acquisition, low-interest loans/revolving
loan fund for preservation, and/or code enforcement.
Most low-income households do not live in the limited supply of subsidized
affordable units that are available. Rather they live in market rate housing that is
"naturally" more affordable due to the location, age, size, condition, or other
factors that lead to lower rent or cost. Often it is much more cost effective for
housing agencies to try to preserve this type of housing(e.g., a mobile home
park)than try to create an equivalent number of new units. While continuing to
produce new higher-standard affordable units is necessary and key goal,
protecting the units that are currently low cost is also important.
Considerations • Dependent on partnership and funding stream.
• Acquisition of existing low-cost housing is only possible if property owners
are willing to sell.
• Lake Oswego does not have a large stock of naturally occurring affordable
housing. However,what's there is important to preserve if possible.
PP 22-0005 ATTACHMENT 3/PAGE 38 OF 42
Anticipated • Housing Need Addressed: Government-subsidized affordable housing.
Impact • Population served: Low-income households
• Income level:0-80%AMI
• Benefits and Burdens:This strategy is expected to benefit low-income
residents by ensuring preservation of the city's low-cost housing stock, and
ensuring it remains affordable long-term.
No burdens on priority populations are anticipated.
• Housing tenure: For rent
• Magnitude: Moderate (if funded via a new revenue source, and if inventory
is available; else Low)—This can be an effective approach and is a major
focus of the Portland Housing Bureau,for instance, which has bought large
older apartment complexes for preservation, and hotels/motels for
conversion. In becoming involved in areas or properties where housing is
naturally less expensive, it can be important to be cautious and take a "first
do no harm" approach, as attempts to improve or invest in these properties
can sometimes have the unintended effect of raising property value and
rents/housing costs.
Time Frame Implementation:To be determined based on further discussion. Contingent on
adoption of a new revenue source.
Impact:This strategy can begin to have an impact after the City has conducted
an inventory of affordable housing and accumulated adequate funds to
contribute to housing acquisition. Impact to the City's supply of affordable
housing is expected to be longer term.
Implementation • Identify a potential funding source (or sources).
Actions • Identify affordable housing units to preserve (see Strategy 1.10.
• Develop loan programs, potentially in partnership with lending institutions.
Lead & Partners Lead: Lake Oswego Community Development
Partners: Housing property owners; nonprofit affordable housing providers
PP 22-0005 ATTACHMENT 3/PAGE 39 OF 42
4. Not Recommended
The following strategy is not recommended for implementation in the HPS because it is not expected to
have a meaningful impact on housing production in Lake Oswego.
4.1 Homebuyer Opportunity Limited Tax Exemption Program
(HOLTE) (E06)
Description The purpose of this program is to encourage homeownership among low-and
moderate-income households and to stimulate the purchase, rehabilitation, and
construction of residences in certain areas as a form of infill development.
The program allows a limited 10-year property tax exemption to owner-occupied
single-unit housing that has a market value upon completion of no more than
120%of median sales price of dwelling units located within the city (or a lesser
value adopted by the jurisdiction).The tax exemption can be granted for up to 10
successive years, and only applies to the value associated with property
improvements, not the land value.
While not required by statute, local governments can establish income criteria
for eligible homebuyers. For example,the City of Portland limits eligible
homebuyers to those earning no more than 100%of the area median income.'
Single-family housing units,townhomes, multi-family homeownership units (i.e.,
condos), and manufactured housing are eligible for the exemption. Eligible units
can be new construction or rehabilitated existing homes.The housing must be in
an area defined and designated by the City.The City also would create criteria
and establish required design elements or public benefits that would be applied
to properties using the exemption.
(Authorized by ORS 307.651-687)
Considerations • Strategy to facilitate homeownership among moderate-income households.
• Effectiveness depends on the local housing market and land costs.The recent
median sale price in Lake Oswego is$780k, so this program could in theory
apply to home values of$940k(120%of median).An income of about $200k
is needed to afford the median home with a 20%down payment. With less of
a down payment, even higher incomes would be needed.The HNA found
that the number of homes selling at the lower end (less than $500k for
instance)was a small share of the overall inventory.
• The City could consider lower sales price limits (below 120%of median sales
price), but this would be less enticing to developers given the profit potential
of market-rate development in Lake Oswego.
Anticipated • Housing Need Addressed: Homeownership options for moderate-income
Impact households.The HNA indicates a need for 1,024 new ownership units (52%
of new needed housing) over the 20-year period.The HNA also indicates that
11 City of Porland, HOLTE Program. https://www.portland.gov/phb/holte/sale-requirements
PP 22-0005 ATTACHMENT 3/PAGE 40 OF 42
16% of all new needed units will need to be affordable for moderate-income
households (80-120%AMI).
• Population served: Moderate-income households
• Income level:80-120%AMI
• Benefits and Burdens: If calibrated effectively, this strategy would be
expected to benefit moderate-income households by increasing affordable
homeownership opportunities.This would especially benefit first-time
homebuyers that would otherwise be challenged to purchase a home in Lake
Oswego, and potentially seniors looking to purchase a downsized home.This
strategy also has the potential to benefit communities that have historically
faced structural barriers to homeownership—particularly people of color and
other marginalized communities.
No burdens on priority populations are anticipated.
• Housing tenure: For sale
• Magnitude: Low—This program is expected to have limited impact due to
the land and housing costs that prevail in Lake Oswego. Unfortunately,there
will be few opportunities for appropriate homes for lower-income first-time
homebuyers. While this exemption would certainly help with homebuyer
finances, it would not apply to land cost, and there are few homes or
neighborhoods in the community that are low-cost candidates for
rehabilitation.
Time Frame Implementation: Not Recommended
Impact:The HOLTE can be used once it is adopted, and for as long as the City
offers the exemption.The impact on housing supply is expected to be longer-
term.
Implementation • Define eligibility and design criteria.
Actions • Work with other taxing jurisdictions to gain approval.
• City Council action:Adopt tax exemption program by resolution or ordinance.
Lead & Partners Lead: Lake Oswego Community Development
Partners: Lake Oswego Finance Department; overlapping taxing jurisdictions
PP 22-0005 ATTACHMENT 3/PAGE 41 OF 42
Appendix A: CET Supplemental Memo
The attached memo provides additional information about Construction Excise Tax (CET). An initial
version of this memo was included in the agenda packet for the Planning Commission's January 8, 2024
Work Session.Additional information has been added, examining potential CET revenue generation
based on past permit data in Lake Oswego.
PP 22-0005 ATTACHMENT 3/PAGE 42 OF 42