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Planning manager outlines SB 1537 exemption, flags three code gaps commissioners should watch

City of Lake Oswego Planning Commission · October 28, 2025
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Summary

Planning manager Johanna Hasty reviewed Lake Oswego’s exemption from Oregon’s SB 1537 mandatory adjustments program, explained conditions attached to the exemption and identified three areas without local adjustment pathways—special street setbacks, the charter 50‑foot residential height cap and maximum density limits—that could trigger state adjustments for eligible housing projects.

At a work session following the public hearing, planning manager Johanna Hasty briefed the commission on Senate Bill 1537 and the city’s exemption status. The city received an exemption from SB 1537 earlier in the year but the exemption includes conditions of approval and performance objectives that the city must meet.

Hasty described the exemption’s publicity requirement — a ‘‘local adjustment handout’’ and a dedicated webpage — and explained that the state requires the city to maintain transparency about local adjustment pathways and how applicants can request adjustments.

She identified three specific areas where Lake Oswego currently lacks a local adjustment pathway and where the state’s mandatory adjustments would apply to eligible housing projects: special street setbacks for substandard streets, the charter’s 50‑foot maximum residential height limit (which has no local variance pathway and would require case‑by‑case handling), and certain maximum density caps (for example, the R3 zone’s stated cap of 12 units per acre) where increased massing must be allowed to convert to additional units if other adjustments are approved.

Hasty also noted a monitoring requirement tied to the exemption: the city must sustain a rolling 90% approval rate for local adjustments over five‑year windows to remain in compliance with the exemption’s performance objectives. She warned that adding many new adjustments will increase the chance of denials and could threaten the city’s required approval rate.

Commissioners asked clarifying questions about how mandatory adjustments would be triggered during a development application and whether the city should consider local code amendments. Hasty and staff said the council previously directed staff to pursue the exemption and decided not to pursue local code changes for the three specific areas, instead letting the state’s mandatory adjustment mechanism apply for eligible projects and monitoring the results.

No action was required of the commission at the session; the presentation was informational and intended to prepare commissioners for how SB 1537 might affect future project reviews.