For the past nine years, Thornburgh Resort Company, LLC and its successor Loyal Land, LLC have attempted to site a destination resort on 2,000 acres in Deschutes County. Ms. Annunziata Gould has continually challenged this effort. The latest challenge, Gould v. Deschutes County (Gould X), may have been the last, for the Oregon Court of Appeals latest decision identified some significant boundaries to the deference that it and LUBA must give to local government interpretations of their own plan and land use regulations. A little background is necessary.
As the current President of Housing Land Advocates, I am pleased to announce HLA’s 2015 Conference – “At the Intersection of Housing and Health.” Garvey Schubert Barer is a proud sponsor of the event and its contribution last year resulted in scholarships for more than 20 law and planning students interested in advocating for smart land use planning to build equitable neighborhoods.
Steven Fischbach, Community Lawyer at Rhode Island Legal Services will be the keynote speaker.
Panelists and speakers include:
Rachel Banks, Program Director, Chronic Health Prevention Program, Multnomah County Health Department
Dr. Vivek Shandas, Portland State University, Toulan School or Urban Studies and Planning, Institute for Sustainable Solutions
Justin Buri, Executive Director, Community Alliance of Tenants
Dr. Lisa Bates, Portland State University, Toulan School of Urban Studies & Planning
Jim Long, Affordable Housing Manager, City of Bend, OR
Erin Skaar, Executive Director, Community Action Resource Enterprises (CARE), Inc., Tillamook County, OR
Jes Larson, Director, Welcome Home Coalition
Please find the registration details here.
We hope you can join us this year for a stimulating conversation about housing and public health.
The Department of Housing and Urban Development (HUD) wasted no time in finalizing the new affirmatively furthering fair housing rules the day after the U.S. Supreme Court upheld disparate impact claims under the Fair Housing Act in Texas Department of Housing Affairs v. Inclusive Communities Project, Inc. (see last week’s post for a summary of that case). Disparate impact results from governmental policies that may not have been intended to create segregation, but do in fact result in segregation. The Supreme Court’s ruling upholds the Fair Housing Act’s prohibition on discrimination caused by policies or practices that have an unjustified disparate impact because of race, color, religion, sex, familial status, national origin, or disability.
The new rule requires certain public entities (“entitlement jurisdictions” that receive federal funding for housing) that have, under previous HUD rules, been required to prepare an Analysis of Impediments to Fair Housing (AI) to prepare an Assessment of Fair Housing Report (AFH). The AFH meets standardized reporting requirements, and is drafted to assist program participants in reducing disparities in housing choice, and to provide access to housing opportunities, particularly for those with protected status. The overall goal of the new reporting requirement is to expand economic opportunity and enhance quality of life.
These rules are a game changer for land use planning. HUD is proactively getting involved in the business of zoning for fair housing, not just financing units. HUD recognizes that fair housing issues may arise from factors such as zoning and land use, including the proposed location, design, and construction of housing; public services that may be offered in connection with housing (e.g., water, sanitation); and related issues. According to HUD, the AFH approach focuses primarily on assisting program participants in being better informed, and better able to set goals and priorities. In particular HUD wants to ensure that the following conditions will be taken into consideration when making funding decisions in a particular jurisdiction - patterns of integration and segregation; racially or ethnically concentrated areas of poverty; disproportionate housing needs; and housing-related barriers in access to education, employment, and transportation, among others.
While local jurisdictions will remain in local control of land use decisions and adoption of zoning regulations under the new rules, entitlement jurisdictions are called on to provide a specific analysis of land use programs that may inhibit affirmatively further fair housing. In addition to HUD’s final rule, HUD’s Assessment Tool, adopted in 2014, and guidance to be issued in the near future, will assist recipients of federal funding to use that funding and, if necessary, adjust their land use and zoning laws in accordance with their existing legal obligation to affirmatively further fair housing.
Zoning and land use laws that are barriers to fair housing choice and access to opportunity can be quite varied and the determination of whether a barrier exists often depends on the factual circumstances in specific cases. One example is zoning and land use laws that were intended to limit affordable housing in certain areas in order to restrict access by low-income minorities or persons with disabilities. The City of Black Jack took egregious zoning actions in the 1970s that prevented construction of low-income multifamily housing that had a racially discriminating effect and was found to violate the Fair Housing Act. U.S. v. City of Black Jack, 508 F.2d 1179 (1974). An example of a positive zoning action that would further fair housing would be the removal of such an ordinance. HUD intends to include additional examples in its guidance for its affirmatively furthering fair housing regulations.
Closer to home, Oregon’s 2015 legislature had a clear path to a remove a barrier to affirmatively furthering fair housing, but the Oregon Senate would not even take a public vote on House Bill 2564 to remove the constitutional ban on mandatory inclusionary zoning. Instead, the bill died in committee after having passed the House. Inclusionary zoning is a tool that requires new developments of housing to construct a particular percentage of new units for qualifying low-income home seekers. While the Oregon Senate failed to move forward, the State’s Draft Fair Housing Report 2016-2020 contains a finding that the state’s ban on inclusionary zoning “limits housing choice for persons of color and low income persons.” The AI included in the report states:
Disallowing inclusionary zoning as part of a community’s affordable housing toolkit limits the provision of affordable housing in general. In addition, limits on the use of inclusionary zoning may disproportionately affect members of protected classes to the extent that they have a greater need for affordable housing. This situation is called discriminatory effect or disparate impact.
With the fuel from the Supreme Court’s decision, as well as the new HUD regulations, Oregon’s leaders would be wise to avoid potential challenges and pick off low-hanging fruit like overturning the ban on inclusionary zoning. Such action is an easy first step to remove barriers for protected classes and avoid disparate impact challenges.
Although not garnering the rallies and applause given to the U.S. Supreme Court’s recent decisions dealing with the Affordable Care Act or same-sex marriage, the Court’s ruling considering the scope of the Fair Housing Act is likely to have just as much impact in how neighborhoods develop and in the choices protected classes of people – such as those protected by race, disability and familial status - have about where to live.
In Texas Department of Housing Affairs v. Inclusive Communities, Inc., the Inclusive Communities Project (ICP), a non-profit organization that seeks to promote racial integration in Dallas, sued a state agency charged with allocating HUD-issued low income housing tax credits to developers who build low-income housing projects. The ICP accused the Texas agency of disproportionately allocating the tax credits to properties in poor areas in violation of the Fair Housing Act of 1968 that makes it illegal to refuse to sell, rent “or otherwise make unavailable” housing to anyone because of race, sex or other protected categories. Between 1995 and 2009, the state did not award tax credits for any family units in predominantly white census tracts, and instead awarded tax credits to locations “marked by the same ghetto conditions that the FHA was passed to remedy,” ICP’s pleading states. ICP did not allege intentional discrimination, but rather whether the fact that issuance of tax credits within solely high-poverty areas that results in a disparate impact on minorities is sufficient to show a violation of the FHA.
Justice Kennedy, writing for the majority, noted that while de jure racial segregation in housing has been unlawful for over a century, de facto segregation remains. Congress passed the Civil Rights Act of 1968 and amendments to the Fair Housing Act in 1988 (the Fair Housing Amendments Act or FHAA) as well as cases applying Title VII of the Civil Rights Act of 1964, which banned many acts of housing discrimination, as antidiscrimination laws that focus not just on the “mind-set of the actors” but also on the “consequences of the actions.” By its terms, the FHA and its amendments were enacted to provide for fair housing and to prohibit unfair discriminatory housing practices. The Court added: "These unlawful practices include zoning laws and other housing restrictions that function unfairly to exclude minorities from certain neighborhoods without any sufficient justification. Suits targeting such practices reside at the heartland of disparate-impact liability."
The Court emphasized at some length that the disparate impact test was not formulaic and must be applied flexibly and specifically expressed concern over the use of racial quotas. The test must require a “causal link” in a case such as the one before it, between the policy and discrimination so as to remove “artificial, arbitrary and unnecessary barriers” to housing. The Court concluded:
Much progress remains to be made in our Nation’s continuing struggle against racial isolation. In striving to achieve our “historic commitment to creating an integrated society,” we must remain wary of policies that reduce homeowners to nothing more than their race.
Justice Alito writing for the dissent, joined by Chief Justice Roberts, Justice Thomas and Justice Scalia, focused on the statutory language “because of race” and concluded that only intent or motive mattered. As a result, Congress intended to cover disparate treatment — not claims of disparate impact. Quoting from another case, Alito pointed out: “The Court acknowledges the risk that disparate impact may be used to ‘perpetuate race-based considerations rather than move beyond them.’”
This case highlights the equity associated with giving all individuals choices in selecting appropriate housing rather than focusing solely on their quantity. But calling HUD’s Section 8 program “Housing Choice” is entirely undermined if families really have no choice about where they are going to live. As importantly, it illustrates the link between affordable housing and land use planning. The land use choices that planners and housing advocates make that results in segregation can violate the Fair Housing Act even though it may be entirely inadvertent.
The Multnomah County Planning Commission culminated a two year long planning process on Monday June 1, 2015, by approving a new Sauvie Island/Multnomah Channel rural area plan and forwarding it to the Multnomah County Commission for final adoption. The Commission’s action sets the stage for the island’s future, addressing a wide variety of issues. Of particular interest was the approach to floating homes, agri-tainment and transportation.
Sauvie Island is one of the closest rural areas to downtown Portland and is special to many people, including the residents of the island, as well as the generations of Portlanders who have picked berries, ridden bikes and gone to the beach on the island. The difficulty is that, as Portland grows, the island runs the risk of being loved to death. The new rural area plan is an attempt to address some concerns before they turn into crises.
The first area of concern involves floating homes. The Multnomah Channel is home to 18 marinas and over 200 floating homes. An issue that arose in the planning process is how much those marinas would be allowed to expand. Language in the previous rural area plan would have allowed future development in those marinas at an urban density of one home every 50 feet of waterfront, resulting in a significant increase of residences in this rural area. The rural area plan approved by the planning commission would limit marinas to only those homes already allowed pursuant to existing County land use approval.
Ed Sullivan and I co-author the annual comprehensive plan update for the American Bar Association’s State and Local Government Law Section. The most recent update was just published by the Urban Lawyer and you can read about it here. The article undertakes an annual survey of state and federal cases dealing with the role of the comprehensive plan (sometimes called the “General” or “Master” plan) in land use regulation. That survey and this resulting article illustrate trends in the current use of three modes of perception regarding comprehensive plans by state legislatures and state courts. The first mode, the “unitary view,” is that planning is neither essential nor possibly even relevant to zoning and land use regulation, and it is the local zoning ordinance that is dispositive. The second view, the “planning factor view,” is that a plan is relevant, but not necessarily dispositive of the validity of a land use regulation. The final view, the “planning mandate” view, is that planning is essential to land use regulation. Please review the article for specific examples and commentary on each of these views.
The trend in case law in this update demonstrates increased respect for comprehensive planning, less tolerance for the view that zoning regulations are isolated from their planning roots, and more emphasis on the role of planning when plans are amended or interpreted. We hope you enjoy the article and that the update assists you in your land use battles.
One of your faithful columnists, Ed Sullivan, is retiring after forty-five years of law practice at the end of 2014. While he will continue to write this column for a little longer, he shares his thoughts on the evolution of Oregon land use law over that time.
I graduated from Willamette University College of Law in 1969, having come to Oregon only three years previously and knowing no one when I arrived. Fortune directed me to Washington County, a very different place than it is now, to become an Assistant County Counsel, and in less than 18 months, County Counsel.
Fortune also smiled in giving me the Fasano v. Washington County case to brief and argue. This case involved approval of a manufactured home park in a suburban residential area now part of Tigard. But the case was a vehicle to ponder the way that Oregon views small area rezoning and the relationship of the comprehensive plan to land use regulation. While the County lost the case in 1973 because the findings (which I did not write) were inadequate, the case formed a solid basis for Oregon land use planning by requiring county land use regulations and actions to “carry out” a required comprehensive plan and treating small tract rezoning as “quasi-judicial” actions, requiring hearings officers or bodies to allow the presentation and rebuttal of evidence, to avoid or reveal ex-parte contacts, and to justify their decisions by findings. A similar case in 1974, Baker v. City of Milwaukie, required that cities align their regulations and actions to their plans as well. I was fortunate enough to appear as an amicus curiae before the Oregon Supreme Court on behalf of the predecessors to the American Planning Association and even more fortunate to be allowed to present oral argument to the court. These cases aligned well with the emerging Oregon planning system enacted in 1973 by SB 100.
After receiving my LL.M. in London, I entered private practice and represented applicants, opponents and local governments in many hearings and appeals. Among those cases were persuading Clackamas County to deny its own permit for gravel mining, getting approval of the Lake Oswego water system expansion from West Linn, getting the Douglas County plan and regulations acknowledged by LCDC, and assisting Cannon Beach in the adoption of its short term rental ordinance. I’ve also represented a number of local governments, including Oregon City for the last 25 years.
Perhaps my most unusual task was dealing with the Rajneesh sect, which came to Oregon in 1981 and sought to establish a city on the “Big Muddy Ranch” in Wasco and Jefferson Counties and managed to antagonize just about everyone. While the land use efforts were generally successful, the other activities of that group in taking over an adjacent city, poisoning salad bars and bringing in homeless people to register to vote in sparsely populated areas, resulted in its downfall. The offensive tactics of that group, and the reaction to them, tell us a lot about Oregon.
Besides the cases and controversies, I have been able to watch new planners and lawyers grow for over 40 years, teaching at the Portland State University School of Urban and Public Affairs and at the Lewis and Clark and Willamette law schools. In addition, I have been privileged to serve as Chair of the Section on State and Local Government Law of the American Bar Association, Regional Vice President of the International Municipal Lawyers Association, and have done many presentations on land use in the United States and internationally.
It has been a good run with fascinating people, places and events. While I will end my law practice, I hope to continue to teach, write and speak, especially on land use planning issues, for as long as those efforts are useful. Thanks for reading and commenting on this column.
Edward J. Sullivan has specialized in land use law for over 40 years and is an owner in the Portland Office of Garvey Schubert Barer. Mr. Sullivan is a Past Chair of the State and Local Government Law Section of the American Bar Association and may be reached at 503-228-3939 or at firstname.lastname@example.org.
In Parkview Terrace Development LLC v. City of Grants Pass, LUBA No. 2014-024 (July 23, 2014), LUBA considered the appeal of a City Council decision that denied the Petitioner site plan approval and a variance from street and block length standards to permit construction of 50 units of federally assisted housing for low-income individuals.
The subject property is zoned High Density Residential (R-3) and includes approximately 3.02 acres. The site is neighbored by residential townhouses, a warehouse, a mini-storage facility and a City park. In 2006, the City approved a planned unit development (PUD) for 88-units, but only 28 townhouses were constructed before the project was shelved during the recession. The Petitioner, a successor-in-interest to the original developer, wanted to build a 50-unit multi-family housing project in place of the second and third phases of the PUD. In contrast to the for sale townhouses, the new units would be rental units. Although the project was supported by staff and the Planning Commission, the City Council denied the application.
The applicant appealed because the City Council applied standards that were not “clear and objective” under the needed housing statute, ORS 197.307(4), and because the City Council erred in its findings related to variance criteria. LUBA agreed and reversed the decision. The following standards were not considered clear and objective:
• A standard that the proposal comply “with applicable elements of the Comprehensive Plan, including: Traffic Plan, Water Plan, Sewer Plan, Storm Drainage Plan, Bicycle Plan, and Park Plan,” where the City Council’s decision focused on the Traffic Plan which is an eight chapter long Master Transportation Plan. Many of the goals and objectives in the Traffic Plan are not clear and objective.
• A standard that requires “potential land use conflicts have been mitigated through specific conditions of development,” where the City Council concluded without explanation that the criterion was not satisfied. LUBA found that mitigation of “potential land use conflicts” is not clear and objective.
• A standard requiring that “adequate basic urban services are available, or can be made available by the applicant as part of a proposed development or are scheduled by the City Capital Improvement Plan.” The terms “adequate,” “basic urban services” and “available” are not explained in the Code, and without some explanation those terms are not clear and objective.
• A standard that the “provision of public facilities and services to the site will not cause service delivery shortages to existing development” was not clear and objective because the Code did not provide guidance regarding the scope of “public facilities and services” or how to go to determine if the proposal will cause service delivery shortages to existing development or what qualifies as a shortage.
• A standard regarding mitigation for special design consideration related to existing adjacent development was not clear and objective because the requirement to “mitigate” and the methods of suggested mitigation (e.g., landscaping, additional setbacks, and screening) were not clear and objective.
• A standard requiring that “traffic conflicts and hazards are minimized on-site and off-site” as provided in an Article of the Code was not clear and objective because the Council’s conclusion that the criterion was not satisfied did not explain minimization to on-site and off-site conflicts and hazards, and the Codes reference to a 32-page Article of the Code was too vague.
• A standard that requires “there are adequate provisions for maintenance of open space and other common areas” was not clear and objective, where the City engaged in a subjective analysis of whether the open space and common areas were “adequate.”
In addition to the failure of the City’s standards to meet the clear and objective requirement, the Council’s denial of a variance application was either similarly tainted, or impacts of a grant of the variance could have been mitigated through conditions.
Not only did LUBA reverse the City’s decision but required that the City approve the project in accordance with the Planning Commission’s decision and associated conditions. Stay tuned! This is the rare case where LUBA may consider a grant of attorney fees because the City Council’s findings were made in complete disregard to the Petitioner’s complaints that the standards were not clear and objective.
Mount Ulla Historical Preservation Society, Inc. v. Rowan County, 2014 WL 619584 (NC. App.) involved the second attempt of a broadcast company secure a conditional use permit to build a radio tower. The first application had been denied in 2005 on grounds of an air safety hazard to a nearby airport. That denial had been appealed to the North Carolina Court of Appeals but was upheld. In 2010, a slightly lower tower was proposed and approved after the governing body denied a motion to dismiss the application on res judicata and collateral estoppel grounds. The trial court reversed and the Historical Society appealed.
The Court characterized conditional use permit conditions as quasi-judicial and asserted that the trial court decision on this question of law was subject to de novo review. Utilizing North Carolina case law, the Court found that res judicata and collateral estoppels could apply to parties in privity if the facts have not materially changed as to the grounds of the previous denial. In this case, the 2005 denial was due to an air safety hazard and the question was whether a reduction of height by 150-feet of the tower, which was now proposed to 1,200 feet high, was a material change. The Court characterized this as a fact question to which the Court normally deferred to the governing body. However, the Court, in viewing the whole record, found there was nothing that would materially undermine the reasoning of the 2005 decision. The Court said the Respondent essentially had the same facts in both cases and failed to show that the 2005 decision was incorrectly decided based on new facts. Lacking such a basis, the doctrines of res judicata and collateral estoppel applied and the grant of the conditional use permit was found to be correctly reversed by the Trial Court.
Oregon courts in LUBA have been reluctant to apply res judicata and collateral estoppel to quasi-judicial land use decisions. Plans and regulations, as well as facts, change over time and the identity of parties in two cases is rarely the same. However, this North Carolina decision, which turns on whether facts have been materially changed, is an interesting excursion into this area of law. Mount Ulla Historical Preservation Society, Inc. v. Rowan County, 2014 WL 619584 (NC. App.)
While some legislators believe the State can solve unemployment in rural Oregon by fast track approval of mines and power generating facilities, perhaps rural Oregonians would be better served by positioning themselves for the emerging marijuana market.
Two bills – Senate Bill 1578 and House Bill 4153 – are in play this legislative session to encourage job development in cities and counties with high unemployment rates. These bills will provide a free pass for land use approvals to develop mines and power generating facilities, among other uses. In both bills, areas of high unemployment are defined as those areas where the unemployment rate is seven percent or higher for a period of 12 consecutive months.
The bills allow local governments to adopt ordinances establishing criteria under which the government body may approve an application to site and use an industrial manufacturing or natural resource facility in an area of high unemployment, notwithstanding the statewide land use planning goals, comprehensive plans or land use regulations. Only one public hearing for such application would be required and once the local government acts, all other affected State agencies, counties, cities and political subdivisions would be required to issue appropriate permits, licenses and certificates and enter into intergovernmental agreement as necessary for the construction and operation of the facility.
Senate Bill 1578 is the most far-reaching of the bills and has the most legs, as it is already scheduled for a public hearing and possible work session. Senate Bill 1578 authorizes a tax credit for the project owner’s ability to create jobs – the creation of even a single full-time job as a result of the project will entitle the project owner to a tax credit.
While both bills provide that the decision of a local government under such an ordinance would not be a land use decision, and appeals would be expedited to the circuit courts, Senate Bill 1578 would require that circuit courts give priority to proceedings that arise under this bill over all other matters before the circuit court. Anyone who participated in a Measure 37/49 proceeding in circuit court should flinch a little at this proposal – and the idea that land use matters should be considered by judges who have little experience in this area of law.
Over the past few years, we have witnessed several attempts to provide for industrial supersiting and solutions for areas of the state with high unemployment rates. Instead of pursuing these special interest bills, perhaps we should focus on new markets. If rural legislators are really looking for market share and job development, perhaps they would do better by positioning themselves to benefit from marijuana-related efforts. Rural areas are primed to make land available as “shovel-ready” for agricultural production and supply chains to medical marijuana facilities or recreational users. Keep an eye on Senate Bill 1531 governing the location of medical marijuana facilities and Senate Bill 1556 suggesting that persons over age 21 should be able to possess, transfer or produce marijuana, as well as other initiatives aimed at legalizing the recreational use of marijuana. If Senate Bill 1556 is passed, the vote of the people in the next general election will be required before it takes effect. Oregonians have mastered the art of viticulture, and now it appears that more opportunities to provide for the consumption of specialty farm products may be in our future.
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.