Understanding Oregon SB 1537 and Its Impact on Land Developers

Oregon has long been recognized for its robust land use planning policies designed to balance growth with environmental preservation. Senate Bill 1537 (SB 1537), passed in 2024, marks a significant development in the state’s ongoing efforts to address its housing crisis. This legislation, part of Governor Tina Kotek’s housing initiative, introduces substantial changes to increase housing production and affordability. For land developers and property owners in Oregon, SB 1537 presents both opportunities and challenges that are important to understand.

Key Provisions of SB 1537

SB 1537 establishes the Housing Accountability and Production Office (HAPO) under the Department of Land Conservation and Development (DLCD) and the Department of Consumer and Business Services (DCBS). The primary goals of HAPO include ensuring compliance with state housing laws, providing technical support to local governments and developers, and minimizing barriers to housing production. Here are the major components of the bill:

1. Housing Accountability and Production Office (HAPO): HAPO is designed to streamline the housing development process by providing guidance, funding, and technical assistance to local governments and developers. This office will investigate compliance issues and offer solutions to implement state housing laws effectively.

2. Infrastructure Funding: SB 1537 allocates $200 million for infrastructure projects that support housing construction. This funding enhances affordable housing development within existing urban growth boundaries (UGBs), focusing on climate-smart housing initiatives that incorporate energy-efficient designs.

3. Urban Growth Boundary (UGB) Expansions: One of the bill’s more controversial aspects is a provision allowing large UGB expansions. Critics argue that this could undermine Oregon’s land use laws designed to manage growth and protect farmland and natural resources. However, proponents believe these expansions are necessary to meet urgent housing needs.

4. Collaboration and Technical Assistance: HAPO will collaborate with various state agencies to provide funding, guidance, and technical support to local governments, facilitating the development of housing projects. This includes offering model codes and best practices to help local governments navigate the complexities of housing development.

5. Climate-Smart Incentives: The bill encourages the incorporation of energy-efficient designs in new housing projects. These initiatives aim to reduce residents’ energy costs and promote sustainable development.

Implications for Land Developers

One of Oregon’s greatest features is wide-open vistas of beautiful landscapes. At the same time, the state has become a premier destination for families and businesses, making the land valuable for both residential and commercial development. These demands have strained current urban growth boundaries, and SB 1537 sets out to lessen those constraints. For land developers in Oregon, SB 1537 presents several key implications that could impact their operations and strategic planning:

1. Increased Opportunities for Development: The allocation of $200 million for infrastructure projects and the establishment of HAPO to streamline development processes present significant opportunities for developers. These initiatives are designed to reduce barriers to housing production, potentially making it easier and more cost-effective to develop new projects.

2. Navigating UGB Expansions: The provision allowing for large UGB expansions could open up new areas for development. However, this aspect of the bill is contentious and may face opposition from local communities and environmental groups. Developers should be prepared for potential challenges and delays related to UGB expansions and should engage with stakeholders early in the planning process to address concerns.

3. Compliance with State Housing Laws: HAPO’s role in ensuring compliance with state housing laws means that developers will need to stay informed about regulatory changes and requirements. Working closely with HAPO can help developers navigate these regulations and avoid potential compliance issues.

4. Focus on Affordable and Climate-Smart Housing: SB 1537 emphasizes the need for affordable housing and sustainable development. Developers may need to incorporate energy-efficient designs and consider the affordability of their projects to qualify for certain funding and incentives. This focus aligns with broader market trends toward sustainability and affordability, which can enhance the appeal of new developments to both buyers and renters.

5. Collaboration with Local Governments: The bill encourages collaboration between developers and local governments. By working together, developers can access technical support, funding, and resources to overcome barriers to housing production. This collaborative approach can also help build community support for new projects, reducing opposition and facilitating smoother development processes.

While it provides new opportunities for housing and development, changes to zoning and implications for current landowners will likely mean a rocky road lies ahead. Given the new landscape created by SB 1537, developers should consider the following strategies to maximize opportunities and mitigate strains:

• 1. Engage Early with HAPO and Local Governments: Proactively engaging with HAPO and local governments can provide developers with valuable insights and support. Early collaboration can help identify potential regulatory hurdles and streamline the approval process.
• 2. Focus on Sustainable and Affordable Housing: Emphasizing sustainability and affordability in new projects can not only meet regulatory requirements but also align with market demand. Developers should consider incorporating energy-efficient designs and targeting price points that make housing accessible to a broader segment of the population.
• 3. Stay Informed About Regulatory Changes: It is crucial to stay abreast of changes in state housing laws and regulations. Developers should regularly review updates from HAPO and other relevant agencies to ensure compliance and take advantage of new opportunities. Working with an experienced land use planner like Richard Stevens & Associates will ensure you are well-informed and positioned to make the best decisions about your investment.
• 4. Plan for Potential UGB Expansion Challenges: While UGB expansions can open up new areas for development, they also come with potential challenges. Developers should conduct thorough due diligence and engage with stakeholders to address concerns and build support for UGB expansion projects.
• 5. Leverage Funding and Incentives: SB 1537 provides significant funding and incentives for housing development. Developers should explore all available funding options and incentives to reduce project costs and enhance financial viability.

Richard Stevens & Associates is your trusted expert for land use planning and development.

Oregon Senate Bill 1537 represents a comprehensive effort to address the state’s housing crisis by promoting housing production and affordability. For land developers and property owners, the bill presents both opportunities and challenges. By understanding the key provisions of SB 1537 and strategically navigating the new regulatory landscape, developers can play a vital role in meeting Oregon’s housing needs while also achieving their business objectives. Staying informed, engaging with stakeholders, and prioritizing sustainability and affordability will be essential to capitalize on the opportunities presented by this landmark legislation. Contact our Richard Stevens & Associates team to learn more about how we can help you optimize your land’s potential.