SB 1537 Exemption Request

On February 12, 2025, the Housing Accountability and Production Office (HAPO) received an application from the City of Tualatin requesting an exemption to section 38 of Senate Bill 1537 (2024 Session). 

Senate Bill 1537 (SB 1537 or the bill) was adopted by the Oregon State Legislature and signed into law in 2024. The bill advances tools that will increase housing production, affordability and choice throughout Oregon. Section 38 of the bill requires local governments to allow temporary flexibility on specified land use regulations for qualifying residential developments. Section 39 of the bill allows local governments to apply to the HAPO for an exemption to section 38. To qualify for an exemption, a local government must demonstrate that: 

(a) The local government reviews requested design and development adjustments for all applications for the development of housing that are under the jurisdiction of that local government; 

(b) All listed development and design adjustments under section 38 (4) and (5) of this 2024 Act are eligible for an adjustment under the local government’s process; and 

(c) One of the following: 

1.  Within the previous 5 years the city has approved 90 percent of received adjustment requests; or 

2. The adjustment process is flexible and accommodates project needs as demonstrated by testimonials of housing developers who have utilized the adjustment process within the previous five years. 

HAPO is required to review and issue a decision approving, approving with conditions, or denying an exemption request within 120 days of receiving the application. Additionally, HAPO is authorized to establish conditions of approval requiring the city to demonstrate that the city continue to meet the approval criteria listed in section 39 (2). This decision is final and may not be appealed. 

Based on HAPO's review of the City of Tualatin Exemption Request against the applicable review criteria established in section 39 (2), SB 1537 (2024), HAPO approved the City’s exemption request with seven conditions. Conditions of approval are set forth in Attachment A of the decision. Following a complaint and investigation by HAPO, a finding of non-compliance with the approval criteria in section 39 (2) or the conditions of approval in this decision will result in a revocation of this exemption under Section 39 (6). This decision expires on the sunset date specified in section 43 of SB 1537 – January 2, 2032. 

The city provides two pathways to request an adjustment to the applicable standards.  

1. Minor Variance (Chapter 33.120): An administrative process in which an applicant may request a deviation from development standards. The city’s application stated the process is only available if an applicant meets the following criteria:  

a. The housing development must be located in the “Residential Low Density Zone (RL) and Residential Medium to Low Density Zone (RML) for detached single-family dwellings, accessory structures, duplexes, townhomes, triplexes, quadplexes, cottage clusters, or accessory dwelling units” (Chapter 33.120.2.b.i). 

 b. The applicant may only request "a ten percent variation from the required lot area” and “up to a 20 percent variation from the required lot width, building coverage, setbacks, projections, into required yards and structure height development standards” (Chapter 33.120.2.b.i A and B).  

2. Variance (Chapter 33.120): A quasi-judicial process in which an applicant may request a deviation or complete waiver from development and design standards. However, the Variance process can only be approved if “a hardship is created by exceptional or extraordinary conditions applying to the property that do not apply generally to other properties in the same zone or vicinity and the conditions are a result of lot size or shape, topography, or other physical circumstances applying to the property over which the applicant or owner has no control”. 

 
All applications for the development for housing must be eligible for adjust any and all of the development and design standards under section 38 (4) and (5) of SB 1537.  When an applicant for the development of housing is rendered ineligible for requesting a statutorily-required adjustment, the city may conform via the direct application of section 38 for the standard or standards rendered ineligible for adjustment via the local process.