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A Costly Error to One City for Failure to Adhere to Clear and Objective Standards in a Needed Housing Case

In Walter v. City of Eugene, (LUBA No. 2106-024, June 30, 2016), the applicant appealed the City’s planning commission decision to deny an application for a planned development of a ten-lot subdivision with an additional lot left as open space. Land surrounding the subject site had been purchased by the City in 2014 to maintain as a natural area and part of a trail system, which would prevent the developer from extending a local road to the subdivision. Instead, the development relies on a proposed shared driveway.  A hearings officer reviewed the proposal and denied the application under the local planned unit development (PUD) code that requires the street layout of the PUD to disperse motor vehicle traffic onto more than one public local street. The planning commission affirmed the hearings officer’s decision.

The applicant’s appeal to LUBA was brought under the needed housing statute, ORS 197.303(1) (needed housing is a broad term for housing across all price ranges), and under ORS 197.307(4) the city can apply only clear and objective standards to the proposed PUD. The statute instructs that standards, conditions and procedures may not have the effect, either in themselves or cumulatively, of discouraging needed housing through unreasonable cost or delay.

LUBA previously ruled that approval standards are not clear and objective if they impose subjective, value-laden analyses that are designed to balance or mitigate impacts of the development on 1) the property to be developed, or 2) the adjoining properties or communities. Rogue Valley Assoc. of Realtors v. City of Ashland, 35 Or LUBA 139, 158 (1998), aff’d 158 Or App 1 (1999), rev. den. 359 Or 594.

LUBA found that the city code’s use of the term “disperse” was problematic because it was not defined and could have different meanings. In this case, it could mean that dispersal is complete to two public local streets if the local street connects to the City’s street system in both directions, without regard to whether the local street is currently improved to allow such a connection today. Alternatively, dispersal could mean that the local street should be improved now to sufficiently and actually provide an existing connection with the City’s street system. Due to this ambiguity in the potential interpretations of “disperse,” LUBA held that the City’s standard is not clear and objective.

Further, based on the record in this case, LUBA ruled that the city’s interpretation of the standard appeared designed to “balance or mitigate” the impacts of a proposed PUD on the public street system and other developed properties in the vicinity of the proposed PUD, a subjective exercise that is contrary to the needed housing statute.

As a result, LUBA reversed the City’s decision because the City acted outside of its discretion to deny a needed housing project through the application of standards that were not clear and objective. Two weeks later, under ORS 197.835(10), and implementing regulation OAR 661-010-0075(1)(e) that requires attorney fee awards in such cases of reversal coupled with an order to approve the application when the City’s decision is outside the range of discretion, LUBA issued an award of approximately $16,000 in attorney’s fees to the applicant.

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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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