The Building Blocks of Real Estate Development – Planning and Zoning

Our Real Estate Review miniseries continues with a look at the challenges developers often encounter due to local zoning and other land use regulations.

In Oregon, zoning and permitting regulations are mostly set by local city or county governments. Each local government in the state is obligated to enact and enforce land use regulations that implement the broad vision for Oregon set by the statewide land use planning goals and the Oregon Land Conservation and Development Commission.

Zoning regulations regulate both uses (such as residential, mixed use, commercial, industrial, etc.), and development standards (such as lot coverage, maximum height, setbacks, and landscaping). In some places, zoning also controls more aesthetic elements of design through design review and architectural standards, often to help a community establish a cohesive environment that works similar to a business brand. For example, Astoria is not likely to be confused for Bend due in part to the Bend Commercial Design Review Standards requiring that, “the predominant building materials should be characteristic of Central Oregon such as brick, wood, native stone and tinted/textured concrete masonry units, and/or glass products.” Local governments also enforce the statewide building codes, which establish minimum requirements for construction, mainly to ensure safety. Local governments can adopt additional building regulations, but only if they do not contradict the minimum standards adopted by the Oregon Building Codes Division.

The primary exception to local zoning control is projects that fall within certain special-purpose categories. For example, energy projects above a certain size are permitted via the state Energy Facility Siting Council. Other state agencies that get involved for special-purpose projects include the Department of Forestry, the Department of Land Conservation and Development, the Department of State Lands, the Department of Environmental Quality, and the Department of Fish and Wildlife.

The law requires cities and counties to make final decisions on planning permit applications within 120 – 150 days after the application is deemed complete, which includes any local appeals. Depending on the type of permit requested, the decision maker can be a single government employee, a third-party hearings officer, an appointed board (like a planning commission), or an elected governing body. Some applications require a public hearing and opportunity for public comment, others can be decided based solely on the administrative record. 

What if a developer or community member doesn’t agree with the local authority’s decision? First, that party must exhaust any appeal processes provided at the local level. After that, an aggrieved party can appeal to the Land Use Board of Appeals (LUBA). Fair warning though – LUBA appeals rarely result in a reversal. More often, LUBA either affirms the local government decision or finds an error in the decision and remands the matter back to the local government for further proceedings. LUBA decisions can be appealed to the state's appellate courts. Recognizing that time is money in real estate development, LUBA decisions and any further appeals of land use cases are subject to strict and relatively short timelines. For example, in most cases LUBA must issue a decision on any appeal within 77 days after it receives the administrative record.

Taking a real estate development from vision to reality requires balancing planning and permitting with design and construction considerations. Failing to do so can lead to costly delays and even the collapse of a project. Take time in the early days to review local zoning regulations with an attorney or land use consultant. This review process can reset expectations and also open up new ideas to enhance a project, such as a partnership with the local government.