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Stuck in the Middle? Oregon Cities Face Balancing Act in Implementing HB 2001
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This article is intended to inform the reader of general legal principles applicable to the subject area. It is not intended to provide legal advice regarding specific problems or circumstances. Readers should consult with competent counsel with regard to specific situations.

By Keenan Ordon-Bakalian, Attorney

This article was originally published in the January 24, 2020 edition of the Daily Journal of Commerce Oregon.

At the January 15, 2020 Metro Technical Advisory Committee (MTAC) meeting, the Committee was briefed by staff from the Oregon Department of Land Conservation and Development (DLCD) regarding the ongoing implementation of recently adopted HB 2001, also known as the “Missing Middle” housing bill.

HB 2001 – Requirements for Large and Medium Cities

The Oregon legislature passed HB 2001 on the final day of the 2019 session in an attempt to allow for greater housing choice and increased supply in residentially zoned areas. In passing the bill, the legislature identified what it believes to be a significant lack of supply in terms of middle housing inventory, which bridges the gap between single-family homes and mid-or high-rise apartment buildings. Affected cities are required to update their local regulations, which have previously limited what types of housing people could build. Supporters of the bill argue that these limitations lead to increased housing costs across the state. However, many people believe the bill will negatively impact neighborhood character and accelerate housing displacement, especially within Portland city limits.

The implementation of HB 2001 is of primary concern to the Metro Council, as its impact will be felt most significantly by the Metro Area cities, which are largely defined as “Large Cities” under HB 2001. These Large Cities include all Oregon cities with a population of more than 25,000, unincorporated areas within the Portland Metro boundary that are served by sufficient urban services, and all cities within the Portland Metro boundary with a population of more than 1,000. 

The bill requires all Large Cities to allow the building of additional “middle housing” inventory beyond just duplexes. These include quadplexes, multiplexes, accessory dwelling units (ADUs), and cottage clusters of homes centered around a common yard. 

Beyond the Metro area, HB 2001 also affects cities state-wide, including not only large cities such as Bend and Medford, but also smaller cities like Newport and Pendleton. These “Medium Cites,” as defined in HB 2001, comprise “all Oregon cities outside the Portland Metro boundary with a population between 10,000 and 25,000.” HB 2001 requires Medium Cities to specifically provide for the construction of duplexes in areas zoned for single-family dwellings. 

In addition to specific changes to local development regulations, HB 2001 also imposes new limitations on, for example, zoning and development standards relating to ADUs, CC&R provisions relating to middle housing in residential neighborhoods, and building codes.

The bill does provide some flexibility for Medium and Large Cities to regulate siting and design of middle housing, provided that the regulations do not, individually or cumulatively, discourage the development of all middle housing types permitted in the area through unreasonable cost or delay. The bill also provided $3.5 million for technical assistance to cities, and DLCD has been tasked to work with local governments to update their codes and implement the specifics of the bill by mandated timelines.

Deadline for New Regulations
Medium Cities have until June 30, 2021 to adopt local code sections implementing HB 2001 requirements. Large Cities have until June 30, 2022 to do the same. While affected cities may request an extension from DLCD due to infrastructure deficiencies, if the extension is not approved by DLCD and the city fails to develop regulations implementing middle housing by the applicable deadline, a model code promulgated by DLCD applies directly. 

DLCD has a deadline of December 31, 2020 to adopt a model code for all affected cities. DLCD noted at the January MTAC meeting that this is a significant undertaking, as the bill requires them to promulgate a code which will be generally applicable to all affected cities, while at the same time accounting for the fact that cities across the state face diverse planning and infrastructure challenges.

Impacts of HB 2001

The cumulative effect of HB 2001 on Metro Area cities—where the bill will have the most acute impact—remains to be seen. The City of Portland is in the process of undertaking its own Residential Infill Project which will allow for additional middle housing in conjunction with the requirements of HB 2001. Additionally, the City is revising its rules around multifamily housing, called “Better Housing by Design.”

Another Metro Area city, Beaverton, is in the process of its own Housing Options Project, designed to increase middle housing inventory within existing neighborhoods. However, because affected cities are still in the planning stages of implementing HB 2001, the implications of the bill will not be fully revealed until new housing development comes online.  

Beyond the impact to Oregon cities, the bill will also require private developers to adjust market strategies and long-term planning objectives. Small-scale developers have historically been the most active builders of middle housing supply, while major developers have focused efforts on large single-family homes in suburban areas or high-density multifamily projects. It is not clear whether HB 2001 will encourage major developers to become more active in the middle housing arena.

Further, national studies have provided conflicting answers as to whether denser zoning leads to additional construction. It is highly likely that Oregon cities will see dramatically different effects when the new middle housing regulations come online. Certain cities will see a dramatic increase in middle housing supply, while others may see a less tangible change, due to infrastructure constraints, market demand, and siting and design requirements—which will vary from city to city.

HB 2001 will require private developers to engage in a complex balancing act, simultaneously striving to achieve the bill’s goal of creating more housing, while at the same time navigating shifting market demand and new development regulations.

Keenan Ordon-Bakalian is an attorney in the Jordan Ramis PC land use and development practice group. Contact him at keenan.ordon-bakalian@jordanramis.com.

Thank you for your interest in this article. The information contained in this article is for the general interest of the reader and should not be regarded as legal advice. If you have questions, or to obtain more information on this topic, please contact an attorney in our land use and zoning practice group.