LOC Plays Critical Role in Limiting Damage of Final Oregon Homes Rules

Over a four-month period, the state’s executive branch, the Association of Oregon Counties (AOC), and the League of Oregon Cities (LOC) engaged in intricate discussions regarding the implementation rules for the Middle Housing Oregon Homes Program, established by House Bill 2258 (2025). The LOC and the AOC pushed back against the regulatory framework.

The resulting rules, codified into the newly adopted Middle Housing Oregon Homes Program, represents a pivot from the state’s initial proposals. Developed under House Bill 2258, the initiative permits housing creators to provide pre-approved residential construction designs to any state planning office for automatic greenlighting, provided that all mandatory site conditions are satisfied.

The rules carry consequences for planning departments and developers alike. Under the initial framework proposed by the Oregon Department of Land Conservation and Development (DLCD), local governments were prohibited from considering many factors in the permitting process which typically would be grounds for altering a development plan. But coordinated pushback from the LOC, the AOC, and local jurisdictions fundamentally altered the regulatory rules.

Pushback Forces a Rewrite at the State Commission

The friction point centered on local oversight. Pursuant to HB 2258, any qualifying lot or parcel must reside inside a designated city boundary or established urban growth boundary (UGB), feature a gradient averaging 15% or less, and remain clear of mapped ecological resource areas. Trees of specific diameter must also be preserved. Yet the DLCD’s initial proposed rules went further, prohibiting a local government from considering many factors in the permitting process.

LOC Plays Critical Role in Limiting Damage of Final Oregon Homes Rules

Local government advocates mobilized. The coordinated opposition proved successful when the Land Conservation and Development Commission (LCDC) declined to approve the initial draft and directed the DLCD to incorporate local government concerns in a new draft. Following additional alterations demanded during an August meeting, local governments secured significant adjustments.

The final version of the rules, known officially as OAR 660 Div. 47, took effect immediately following adoption by the LCDC on October 22. Branden Pursinger, Legislative Affairs Manager, noted the nature of these negotiations in shaping the final administrative language.

Establish Distinct Setback Requirements for City and County Jurisdictions

The negotiated adjustments address the physical realities of building out middle housing. Rather than applying a single standard, the final rules establish distinct setback requirements based on the jurisdiction issuing the permit.

Within city limits, the requirement is 5 feet on all sides. Nevertheless, county-administered Oregon Homes developments situated inside UGBs (unincorporated areas) must maintain a front setback of 15 feet alongside 10-foot clearances on every other side of the building. County-level setbacks are designed to be wider so that municipal services can be integrated seamlessly following future annexation.

The final text of OAR 660 Division 47 addresses safety and infrastructure constraints. Projects are required to follow the DLCD’s height restrictions when located near airports and airstrips (per ORS 836.608 and OAR 660 Div. 13), the defensible space code, and the Oregon Fire Code. Oregon Homes’ projects will also be required to offer one parking location per dwelling.

When conducting environmental and hazard evaluations, municipalities are no longer restricted to comprehensive plans for identifying sensitive ecology and natural hazards, as they may now additionally apply officially sanctioned local ordinances or resolutions. This encompasses FEMA Flood Maps alongside IMS, OFR, and SLIDO regions designated by the Oregon Department of Geology and Mineral Industries.