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In 2007 the voters approved Measure 49 with the effect that certain property owners were authorized to develop additional home sites on land that many thought would see no new development.  Now, DLCD is trying to breathe new life into the home approval authorizations through a transferrable development credit (TDC) program authorized under subsection 11(9) of Chapter 424, Oregon Laws 2007 (Measure 49) and ORS 94.531. According to the purpose of the draft regulations, this will enable landowners to realize the value of their Measure 49 authorizations without developing the property from which the claim arose. These programs will permit landowners, on a voluntary basis, to transfer their development interest under Measure 49 from one property (sending) to another property (receiving) at a more suitable location.  DLCD hopes these programs will reduce the adverse impact of scattered residential development on farm and forest and other resource land.

Under the proposed regulations, each county can establish its own program and DLCD will provide a model ordinance.  The new ordinance will require counties to amend their comprehensive plans to designate sending and receiving areas for the TDCs.  The regulation will require identification of approved holders of conservation easements and allow some form of third party enforcement – likely by the county or DLCD.

TDCs will be measured as one credit for each new dwelling authorized under the Measure 49 Final Order from DLCD.  But, what TDC program would be complete without a bonus provision?  Density bonuses may be available for sending properties that agree to some form of protection based on size – where a conservation easement for sending areas greater than 20 acres or a deed restriction for smaller sending areas may qualify for bonus TDCs.  Notably, a conservation easement would still allow for agricultural, forest, public parks, and conservation uses, as well as any lawyer’s favorite undefined use – “low intensity uses.”  TDC bonuses may also be available by virtue of the sending land being designated resource land, including high value farmland, high value forestland, natural areas and historic sites.

The draft regulations identify a few areas that county ordinances can designate to receive TDCs.  These include rural residential areas zoned with 5 and 10 acre minimums that would be allowed densities with minimum lots sizes of 2.5 or 5 acres, respectively.  Also, substantially developed subdivisions in resource zones could benefit from increased density.  Last, in EFU zones, TDCs could be used for the purpose of allowing a lot or parcel with two dwellings to be partitioned, subject to some limitations.  Receiving areas are to be selected to minimize conflicts with agriculture and forest operations.

DLCD will be required to sign off on an Amended Measure 49 Final Order for property owners entering into a TDC arrangement.  But, if you hold a Measure 49 authorization, beware - some Measure 49 properties may still not be eligible for designation as sending properties if they are unbuildable.  TDCs are fully transferrable but will be subject to a 10 year development clock measured from when the TDC is issued by DLCDs Amended Final Order.  Last, some regional transfer of TDCs may be allowed along the typical division – Metro, Willamette Valley, Coastal, Southern and Eastern counties of the state.

Based on DLCD’s efforts with these draft regulations, the Measure 49 debate is being rekindled and those who thought they had some certainty will again be thrown into a planning process that could include a variety of outcomes.  Perhaps resource lands will be protected, but those in rural residential areas might not be too excited to be receiving the gift.  Moreover, the bonus TDCs are certainly an enticement, and those who worked so hard to limit Measure 49 rewards may not be inclined to support additional development rights to holders of Measure 49 approvals and related TDCs.  DLCD staff’s tentative plan is to bring a recommendation for the new rules to LCDC at the January 22-23 meeting in Portland.

 

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We regularly update clients about changes in real estate law and on industry trends. This includes briefing clients on legislative proposals in the federal tax, housing and other legal areas affecting their businesses. Staying current enables you to anticipate and prevent legal problems as well as capitalize on new developments.
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