Senate Bill 1537 - Mandatory Adjustments Related to Housing

On January 24, 2025, the Planning Division submitted a 25-part questionnaire to the Housing Accountability and Production Office (HAPO) with the Department of Land Conservation and Development (DLCD), requesting an exemption from the “Mandatory Adjustments” required in Section 38 of Senate Bill 1537. SB 1537 requires cities to grant adjustments to specified development standards for qualified housing development proposals. The senate bill is intended to increase housing production, affordability, and choice. Section 39 of SB 1537 allows HAPO to grant exemptions to this bill for cities that can show they’ve already approved at least 90 percent of the adjustments received over the last five years. Sandy has approved 100 percent of the 35 requested “adjustments and variances” for housing projects over the last five years.  

HAPO may take up to 120 days to render a decision if the City of Sandy’s request for an exemption is approved. There will be a public comment period of 45 days. In the meantime, the City is required to contact local contractors and builders letting them know that the City is awaiting a decision and is currently allowed to work under the SB 1537 “exemption” as if it were approved. If you have comments on the City’s exemption request from the mandatory adjustment senate bill, please click the link below to access DLCD’s “housing dashboard”. The dashboard will keep you updated on the status of Sandy’s application to HAPO.

DLCD's Mandatory Adjustment to Housing Standards Dashboard (Click Here)

Senate Bill (SB) 1537 is a Housing Production Bill that was passed in 2024 as part of the state's ongoing efforts to address Oregon's housing crisis.  SB 1537 introduces measures aimed at increasing housing production and affordability.  One of the key components of the bill include the creation of the Housing Production and Accountibility Office (HAPO) to ensure city's are complying with state housing laws.  HAPO will also provide technical support to jurisdictions and developers.   

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. This document briefly describes the ‘mandatory adjustment’ provision of the bill, which allows temporary flexibility on specified land use regulations for qualifying residential developments. Additionally, the HAPO prepared a SB 1537 FAQ with additional information about mandatory adjustments (see pg. 8-15)

Section 38 of SB 1537 requires local governments grant adjustments to specific development and design standards applied to the development of housing if an application meets certain conditions. An ‘adjustment’ is a deviation from an existing land use regulation. In order for a residential application to qualify for an adjustment, the applicant must submit the following information to the local government as part of a development application confirming:

1. The application is for a building permit or a quasi-judicial, limited or ministerial land use decision.
2. The development is on lands zoned to allow for residential uses, including mixed-use residential uses.
3. Site information demonstrating that the development proposal, in total on the site, meets the minimum net residential densities of Section 55 (3)(a)(C), including 
   a.  17 dwelling units per net residential acre if sited within the Metro urban growth boundary,
   b.  10 units per net residential acre if sited in a city with a population of 30,000 or greater,
   c.  6 units per net residential acre if sited in a city with a population of 2,500 or greater and less than 30,000, or
   d.  5 units per net residential acre if sited in a city with a population less than 2,500.   
4. The development is both within an urban growth boundary and annexed to a city.
5. Site information confirming that the development will create net new housing units that include: single-family, multifamily, mixed-use residential where at least 75 percent of the developed floor area will be used for residential uses, manufactured dwelling parks, accessory dwelling units, or middle housing as defined in ORS 197A.420
6. The total requested adjustments do not exceed 10 distinct adjustments (note: each standard listed in the table below counts as one distinct adjustment, even if the application requests multiple components within that category)
7. A statement of how one of the following criteria apply:
   a.  The adjustment makes housing development feasible when it otherwise would not be due to cost or delay,
   b.  The adjustment reduces the sale or rental price per unit,
   c.  The adjustment will increase the number of units in the application,
   d.  All units are subject to an affordable housing covenant to be affordable to moderate income (80-120% Median Family Income) households for at least 30 years,
   e.  20% of units are subject to an affordable housing covenant to be affordable to low income households (≤80%Median Family Income) for at least 60 years,
   f.  The adjustment enables the provision of accessibility or visibility features that would not otherwise be
   feasible, or
   g.  The units are subject to a zero equity, limited equity, or shared equity ownership model making them affordable to moderate income households for 90 years.

Local Exemptions to Mandatory Adjustments – Section 39

Section 39 of SB 1537 enables HAPO to grant an exemption to mandatory adjustment requirements if a local government meets certain requirements. The local government must demonstrate that they utilize a process or processes by which all the listed development and design adjustments in the table below may be granted, and the local government has either granted 90% of all requested adjustments in the last 5 years or submits testimony from housing developers demonstrating a flexible adjustment process that accommodates project needs.