DLCD v. Clackamas County

“When the language in the [Draft] is compared to the language that LCDC ultimately adopted, and what is at issue in this appeal, it is clear that all Upzoning requires an exception to Goal 14 and that petitioner's construction of the rule is the correct one because It comports with LCDC's Intent…”

The subject property is a 111-acre parcel located one mile south of Oregon City's urban growth boundary, near Beavercreek and adjacent to Highway 213. It is within the Clackamas River Water District service area and has a rural designation under the Clackamas County Comprehensive Plan (CCCP), allowing rural residential uses with zoning designations of FF-10 (Farm/Forest 10-acre), RRFF-5 (Rural Residential Farm Forest 5-acre), or RA-2 (Rural Area Residential 2-acre). These zoning designations comply with Statewide Planning Goal 14 (Urbanization).

Since 1981, the property has been zoned FF-10, permitting 10-acre minimum parcels. In 2023, the owner applied to change the zoning to RA-2, which allows two-acre minimum parcels, enabling subdivision into 55 lots. A petitioner argued that this "upzoning" required an exception to Goal 14 under OAR 660-004-0040(7). However, the hearings officer determined that no exception was needed because both FF-10 and RA-2 zoning comply with Goal 14.

First Assignment of Error:

Statewide Planning Goal 14 (Urbanization) aims to ensure an efficient transition from rural to urban land use within urban growth boundaries, supporting urban population, employment, efficient land use, and livable communities.

In 1000 Friends of Oregon v. LCDC (1986), the Oregon Supreme Court clarified that urban uses are prohibited outside urban growth boundaries unless an exception to Goal 14 is granted or the use complies with Goal 14. The court emphasized that the Land Conservation and Development Commission (LCDC) must define "urban uses" either through general definitions, case-by-case decisions, or amendments to goals and rules. To address this, the legislature authorized LCDC to adopt rules implementing land use planning statutes and exceptions to goals. LCDC developed the "Rural Residential Rule" (OAR 660-004-0040), which provides specific guidance on how Goal 14 applies to rural lands in acknowledged exception areas zoned for residential use.

1. Preservation

 The respondents argue that the petitioner failed to raise the issue in the first assignment of error with sufficient specificity to alert the county, as required by ORS 197.797(1). This argument is rejected. The petitioner had submitted a letter to the hearings officer asserting that OAR 660-004-0040(7) mandates an exception to Goal 14 for the requested upzoning of the property from FF-10 to RA-2. This letter directly addressed the issue in the first assignment of error. The petitioner was not obligated to provide detailed arguments. 

2. OAR 0-004-0040(7)

Resolving the dispute about when OAR 660-004-0040(7) requires an exception to Goal 14 necessitates reviewing the hearings officer's interpretation of the rule for legal error, without deferring to the county's interpretation (Kenagy v. Benton County). The meaning of an administrative rule is a legal question, governed by the same principles as statutory interpretation. Courts must determine the correct interpretation, considering relevant text, context, and history, regardless of the parties' arguments or information provided (Gunderson, LLC v. City of Portland; Dept. of Human Services v. J.R.F.; Stull v. Hoke). The goal is to discern the intent of the LCDC, the body that issued the Rural Residential Rule.

    a. Text and context

The petitioner argues that OAR 660-004-0040(7) is a straightforward prohibition against reducing minimum lot sizes without a Goal 14 exception. However, the court disagrees, finding the rule's language ambiguous, particularly the phrase "local government's requirements for minimum lot or parcel sizes." This phrase could refer to criteria in a comprehensive plan or land use regulations (respondents' view) or both criteria and zoning designations (petitioner's view). The ambiguity supports both interpretations.

The petitioner cites context from OAR 660-004-0040(4) and (6) but finds limited support since the key phrase is absent from these sections. Section (4) acknowledges some rural residential areas already compliant with Goal 14 but requires future amendments to align with the rule. The court notes that this requirement is not limited to text amendments, as supported by ORS 197.015(11) and Clackamas County's zoning ordinance, which includes zoning maps as part of land use regulations.

The petitioner also references Section (6)(a), which deems rural residential zones with a two-acre minimum lot size compliant with Goal 14. However, this section does not clarify the disputed phrase, providing limited assistance in interpreting OAR 660-004-0040(7). The ambiguity in the rule remains central to the dispute.

     b. Administrative Rule History

The parties did not provide any administrative rule history to aid in interpreting the phrase "local government's requirements for minimum lot or parcel sizes in rural residential areas" (OAR 660-004-0040(7)). However, courts are obligated to interpret statutes and rules accurately, regardless of the arguments or information provided by the parties. Relevant legislative history should be supplied to the Land Use Board of Appeals (LUBA), but LUBA may also independently examine such history to discern legislative intent.

The rule history shows that the LCDC adopted the Rural Residential Rule in 2000 to regulate lot sizes and prevent upzoning (increasing development density) in rural residential areas without meeting specific requirements. LCDC's intent, as reflected in rulemaking records, was to prohibit upzoning unless a Goal 14 exception was granted, ensuring compliance with statewide planning goals. This intent was reinforced by public concerns, committee discussions, and LCDC's final decision to eliminate complex standards and explicitly require exceptions for upzoning.

The adopted rule clarified that "local government's requirements for minimum lot or parcel sizes" encompassed existing zoning and planning provisions. LCDC's position was that upzoning should occur only through legislative amendments supported by robust data and Goal 14 exceptions and should not be amended through a “quasi-judicial land use decision” thereby maintaining rural land-use integrity and avoiding urban development pressures.

3. DLCD order on Work task 13

The hearings officer and respondents rely on a 2002 acknowledgment by the Department of Land Conservation and Development (DLCD) after a periodic review process conducted between 1996 and 2002. As part of this process, DLCD developed Work Task 13 to address Goal 14 urbanization issues raised by a Supreme Court decision concerning specific zoning areas. DLCD approved Work Task 13 in 2002, stating that the amendments complied with Goal 14.

Respondents argue that this acknowledgment and the Curry County Comprehensive Plan (CCCP) policies shield intervener's application from the rule prohibiting upzoning without a Goal 14 exception. They claim these policies provide an exemption from the prohibition.

The county's existing rural residential zones were acknowledged to comply with Goal 14 in 2000. However, the court rejects the argument that CCCP policies can override subsequent LCDC rules. Under ORS 197.646, local governments must amend plans to align with new rules, and if they fail to do so, the new rules apply directly. While Goal 14 may not apply directly to the decision, statutes and administrative rules remain relevant.

The court affirms that upzoning to higher-density rural residential zoning requires a Goal 14 exception, per OAR 660-004-0040(7). LCDC rules explicitly prohibit such upzoning without compliance with Goal 14.

4. Oregon Shores

In Oregon Shores v. Curry County (2007), there was a challenge to a county ordinance amendment that created a new Two-Acre Zone in rural residential areas. While the ordinance required a Goal 14 exception for applying this new zone, the existing ordinance allowed upzoning from a 10-acre to a 5-acre minimum parcel size without requiring a Goal 14 exception. The petitioners argued that the county should have amended the existing ordinance to also require a Goal 14 exception for such upzoning, but the court held that OAR 660-004-0040(7) did not require this amendment.

In contrast, the current case involves a quasi-judicial amendment to rezone a specific property from a 10-acre minimum to a two-acre minimum parcel size. Unlike Oregon Shores, this case directly addresses whether OAR 660-004-0040(7) requires a Goal 14 exception for such upzoning. Oregon Shores did not address this specific issue, and therefore its relevance here is limited.

The first assignment of error is sustained.

 Second Assignment of Error:

In the second assignment of error, the petitioner contends that even if OAR 660-004-0040(7) does not require a Goal 14 exception, the application violates Goal 14 by proposing an urban use of rural land, conflicting with the Curry County factors. However, since the first assignment of error is sustained, requiring a Goal 14 exception for the zoning change to RA-2, the second assignment of error becomes unnecessary to address. It does not need to be addressed.

The county’s decision is remanded.