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HomeMy WebLinkAboutItem B: New Land Use Regulations and Measure 37 ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Work Session: New Land Use Regulations and Measure 37 Meeting Date: October 10, 2005 Agenda Item Number: B Department: Planning and Development/City Attorney Staff Contact: Susan Muir/Glenn Klein www.eugene-or.gov Contact Telephone Number: 682-6077/682-5080 ISSUE STATEMENT Adoption of new land use regulations such as the Goal 5 protection ordinance has the potential to create new Measure 37 claims. In light of that potential, the council should decide whether it wants to include within the land use code a variance-type process that might avoid creation of such claims. If the council decides such a process should be included, two subsidiary issues are: (1) whether the process should be generally applicable to all of Chapter 9, or just to specific regulations such as the Goal 5 protection regulations; and (2) whether staff, a Hearings Official, the Planning Commission or the council should make the initial decision on such a variance and who should make the final decision. BACKGROUND Following the passage of Measure 37, the council adopted an ordinance to establish a process for addressing Measure 37 claims. The process involves, in part, an initial review by the City Manager, and if it appears that the claim may be valid, a decision by the council. On June 13, 2005, the council held a work session to discuss whether the City should investigate the development of a “givings tax” in order to develop a source of funds to pay Measure 37 claims. The council directed staff to develop a legal framework for and identify administrative costs and procedures to possibly implement a givings tax or fee. The City Manager estimated that the work product would be available for the council in the winter, with the research and other work tasks commencing after the legislative session was over (in order to see what, if anything, the Legislature did related to Measure 37). Staff continue to expect to have a work session with the council during the winter. The Goal 5 protection ordinance now before the council contains some limitations on how property can be used. In some cases, those limitations might give rise to claims under Measure 37. The draft ordinance contains one way of dealing with the potential creation of Measure 37 claims, which was to create a variance process that would allow a property owner to get a restriction modified or waived to the extent necessary to avoid a reduction in fair market value of the property. This variance process would ensure that the regulations do not create valid Measure 37 claims. The initial question is whether a variance-type process should be included as part of the Goal 5 protection ordinance (or other new and existing land use regulations), or alternatively, whether those issues should be dealt with under the City’s Measure 37 implementation ordinance. It is unclear the extent to which the City (or any other governmental entity) will be able to require property owners to L:\CMO\2005 Council Agendas\M051010\S051010B.doc comply with the process created by the Measure 37 implementation ordinance. Measure 37 provides that a governmental entity may adopt a claims process, but also states that compliance with such a process is not a prerequisite to filing a lawsuit in circuit court if the government does not waive the regulation. By including a variance-type process in a new land use regulation, there is a good argument that a property owner will not be able to demonstrate that a land use regulation contains a “restriction on use” or reduces the fair market value of property, which are two of the requirements for a valid Measure 37 claim. Therefore, by incorporating a variance-type process within a new land use regulation, the City may have a better chance of requiring property owners to comply with the City’s process than the City would have if the only process is the City’s Measure 37 implementation ordinance. If the council decides that new land use regulations (or at least, the Goal 5 protection ordinance) should contain a variance-type process, the council should also address the following two questions. First, what criteria should be used for granting a variance? Second, what process should be used (including who should be the initial and final decision-makers)? With respect to the first question, the purpose for providing this variance-type process would be to ensure that a new land use regulation did not create a new Measure 37 claim. Therefore, the criteria should be tied to that purpose. In essence, if a restriction in a new land use regulation would give rise to a valid Measure 37 claim, then the criteria should allow for a variance to avoid the creation of that claim. With respect to the second question, the council can model the process after an existing process, or create a new one. The process that established as part of the Measure 37 implementation ordinance was constrained to a certain extent by Measure 37 itself; it is likely that only the governing body that enacted a land use regulation can waive that regulation if the authority for that waiver is Measure 37 itself. Here, however, the authority for the “waiver” or variance will not be Measure 37, but instead, will be the council’s home-rule power. Therefore, the council has the option of modeling this variance- type process after either the process in the Measure 37 implementation ordinance, or one of the existing land use processes in the land use code, such as a type II or type III process. Both type II and type III processes require notice to the public, opportunities for public input, initial decisions, and then appeals. A type II process is one in which the Planning Director makes an initial decision, with any appeal going to a Hearings Official. A type III process is one in which a Hearings Official makes an initial decision, with any appeal going to the Planning Commission. If the council chooses to model a new variance-type process after an existing process, the council should consider a modification to allow for the possibility that the City would rather compensate for a restriction, than waive that restriction. Therefore, once a decision has been made that the property owner would qualify for a variance or waiver, before that decision becomes effective, the council should have an opportunity to decide whether the City should pay compensation. RELATED CITY POLICIES Measure 37 affects many existing City policies, from the existing policies in the Metro Plan to Chapter 9. This discussion item is to set new policy related primarily to new land use regulations that will be coming in front of the council as Planning & Development moves through the work program adopted by City Council. L:\CMO\2005 Council Agendas\M051010\S051010B.doc COUNCIL OPTIONS A. Rely on the City’s existing Measure 37 implementation ordinance for dealing with new land use regulations that impose new restrictions on use and reduce fair market value of property. Do not create a new variance-type process to include in new land use regulations. B. Adopt a new variance-type process to avoid creating Measure 37 claims for new land use regulations. Model the process after a type II or type III land use process. C. Adopt a new variance-type process, but model the process after the existing Measure 37 claim process. D. Adopt a new variance-type process, with the initial decision made by the Planning Commission. If the Planning Commission’s decision is to deny the variance, then the decision could be final, with any appeal going to LUBA. If the decision is that a variance should be granted, notice could be provided to the council, which then could choose to review that decision, and if the council agrees that the variance is authorized, decide whether to compensate instead of granting the variance. If the council chooses option B, C or D, then the council also should decide whether the new process should apply to (1) just the Goal 5 protection ordinance; (2) all new land use regulations; or (3) all new and existing land use regulations. CITY MANAGER’S RECOMMENDATION The City Manager recommends that a new variance-type process be created for new land use regulations that have the potential for resulting in new Measure 37 claims. The criteria for approval of such a variance should be tied to Measure 37, such that unless a property owner would have a valid Measure 37 claim, no variance would be available, and if the owner would have a valid claim, the variance would be limited to the extent necessary to avoid such a claim. With respect to the process, the City Manager recommends option D above. The application should be decided by the Planning Commission (following notice and public hearing). However, instead of the process ending after the Planning Commission, the process should allow for further review by the council in the event that the Planning Commission determines that the variance should be granted. If the Planning Commission reaches that decision, then before the decision becomes final, the City Manager would provide notice of the decision to the council. If the mayor or any councilor concludes either that the decision is in error (i.e., not a valid claim), or that the City should compensate the property owner, rather than waive the restriction, the elected official could indicate a desire to discuss the matter. The matter then would be added to a future council agenda. If no elected official provides such an indication within 14 days of the City Manager’s notice, then the Planning Commission decision would be final and take effect. SUGGESTED MOTION Move to direct the City Manager to develop a variance-type process consistent with the manager’s recommendation, and to incorporate that process in the Goal 5 protection ordinance. L:\CMO\2005 Council Agendas\M051010\S051010B.doc ATTACHMENTS None. FOR MORE INFORMATION Staff Contact: Susan Muir/Glenn Klein Telephone: 682-6077/682-5080 Staff E-Mail: susan.l.muir@ci.eugene.or.us/glenn.klein@harrang.com L:\CMO\2005 Council Agendas\M051010\S051010B.doc