Central Oregon Landwatch v. Deschutes County

Determining whether lockable bed/bath rooms in a larger house qualify as “overnight lodging units” under ORS 197.435(5)(b) depends on factual determinations, analysis of Goal 8 history, and the underlying policy of relevant statutes.

This appeal is on remand from the Court of Appeals. Petitioner originally appealed a hearing officer’s decision approving a proposed expansion of the Caldera Springs Resort, a “destination resort.” ORS 197.445(4) requires that residences offered for sale within a destination resort may not exceed a ratio of 2.5 residences per separately rentable “overnight lodging unit” (OLU). ORS 197.435(5)(b) defines an OLU to include “permanent, separately rentable accommodations . . . not available for residential use.” To meet the ratio required under ORS 197.445(4), the existing resort and proposed expansion rely on counting each of the bedrooms within the resort’s privately owned rental “cabins” as distinct OLUs. Visitors may rent individual bedrooms; each bedroom has a lockable outdoor exit, bathroom, and a lockable door to the cabin’s interior. At issue is whether these bedrooms qualify as OLUs under ORS 197.435(5)(b) and can be relied on to satisfy the residence/OLU ratio requirement of ORS 197.44(4).

The Court of Appeals identified several relevant factors. First, satisfying the requirement that an OLU be a “separate rentable unit” requires a factual determination that visitors actually rent the units separately, not merely that the unit is available to rent separately. Second, the claimed OLU should be consistent with the history of Goal 8, which contemplated that whole houses or condos, not bedrooms, would be counted as OLUs. Third, the claimed OLUs should support the underlying policy of ORS 197.440, which, according to legislative history, ensures that a minimum number of OLUs are available to tourists. LUBA concluded that all three factors indicate the bedrooms at issue should not qualify as OLUs. The record contains almost no evidence that the bedrooms are functionally separate units, and the latest data indicate that visitors rent only entire cabins. Furthermore, LUBA and the Court of Appeals agreed that qualifying the rental bedrooms as OLUs is not consistent with the history of Goal 8 or the underlying policy of ORS 197.445. REMANDED.