North Hideaway Hills Neighbors v. Lane County

According to ORS 215.448, a home occupation must be operated substantially in the dwelling or in buildings typically associated with uses allowed in the zone. This implies that the primary business activities should occur on-site in a way that aligns with the character of other local permissible uses.

In January 2022, Burch applied for a home occupation permit to run a dog boarding, training, and breeding facility on a 40-acre property. The facility would use outdoor areas, a dwelling, and two structures, totaling over 6,000 square feet. The plan also included a new addition. On March 30, 2023, the planning director approved the permit with conditions. An appeal was filed by NHHN on April 11, leading to a public hearing on May 4. In July 2023, the approval was affirmed with revised conditions and reaffirmed in October and November 2023, following Burch's requests for reconsideration. This appeal follows these decisions.

The subject property is zoned as Marginal Lands (ML), which allows for nonresidential uses including home occupations under ORS 215.213 and ORS 215.448. These statutes require home occupations meet specific standards, including:

1. Being operated by a resident or their employee.
2. Employing no more than five people on-site.
3. Operating primarily within the dwelling or other associated buildings.
4. Not interfering with other uses permitted in the zone.

Additionally, counties may impose further conditions but cannot regulate the home occupation in a way that is inconsistent or less restrictive than these state standards. Lane County Code (LC) has incorporated these state requirements, applying them as conditional uses for ML zones. The limits on home occupations effectively define the type of use allowed, and the home occupation must comply with sanitation, building codes, and other local regulations.

In this case, both NHHN and Burch dispute whether Burch’s operation meets the relevant provisions in LC 16.214, specifically around the nature of the buildings used for the business and the conditions required to ensure it does not interfere with other permitted uses.

NHHN argues that the hearings official misinterpreted LC 16.214(3)(d)(iii), which requires that home occupations be "operated substantially in the dwelling or other buildings normally associated with uses permitted in the ML zone." NHHN contends that the hearings official's decision lacks adequate findings because it approved a large-scale dog breeding facility on marginal land, which relies heavily on off-site contractors ("Guardians") to care for and breed the dogs.

NHHN claims that this off-site system violates home occupation standards, which mandate that operations occur primarily on the property. They argue that the use of Guardians contradicts the requirement that the business be run substantially in the dwelling or associated buildings. Furthermore, NHHN raises concerns about the number of dogs allowed on-site and suggests that the approval conditions do not ensure compliance with these limits.

The hearings official did not interpret the law in the same way. Burch responded that the home occupation criteria concern only operations occurring on the subject property, and the hearings official agreed. NHHN did not provide a strong textual argument to counter this interpretation, and the court concluded that the home occupation standards do not require off-site activities to be considered when determining compliance.

The court also rejected NHHN's claim that the findings were inadequate, noting that the home occupation criteria focus solely on on-site operations. Therefore, the hearings official was not required to address off-site activities or make additional findings related to NHHN's concerns. Both of NHHN’s arguments—misconstruction of law and inadequate findings—were denied.

Burch challenges condition 2d of the permit, which approves the use of the existing 27x40-foot dwelling and a 48x84-foot pole barn for the home occupation, but it does not approve the use of additional structures such as the shed roof wings and portable structures. The condition requires these additional structures to be removed or relocated within the approved pole barn if they are currently present.

Burch argues that this restriction is unnecessary and requests that the approval be affirmed without the condition limiting the use of the "wings" of the pole barn. Burch contends that the pole barn, including the wings, is a structure normally associated with uses in the Marginal Lands (ML) zone and that the hearings official erred by considering the size and use of the structure when applying this condition.

The core of Burch's argument relates to the interpretation of LC 16.214(3)(d)(iii), which requires that home occupations be "operated substantially in the dwelling or other buildings normally associated with uses permitted in the ML zone." Burch asserts that the full structure, including the wings, should be allowed for use in the home occupation.

In their first assignment of error, Burch argues that the hearings official improperly construed LC 16.214(3)(d)(iii) by introducing a building size "norm" to determine whether the structure is "normally associated with uses in the ML zone." Specifically, Burch asserts that the decision should not have imposed any size limitation, as no such criterion exists in the Lane County code, and doing so violates ORS 174.010, which prohibits adding or omitting requirements in statutory construction. Burch references Green v. Douglas County, in which the court ruled that structural design is not a limiting factor for whether a building can be used for a home occupation under ORS 215.448(l)(c)(B).

1. Preservation of the Issue: NHHN claims that Burch did not preserve this issue for appeal. However, Burch cites the record to demonstrate that they raised this issue during the local hearings. They argued that no size criterion exists in LC 16 or the building code. The Land Use Board of Appeals (LUBA) agrees with Burch, concluding that they adequately preserved the issue by raising it with sufficient specificity during the local process.
2. Interpretation of the Statutory and Code Requirement: ORS 215.448(l)(c)(B) and LC 16.214(3)(d)(iii) require that a home occupation be operated substantially in the dwelling or other buildings "normally associated with uses permitted in the zone." Burch contends that there is no specific size limitation for structures in the farm and forest zone and argues that the county improperly inserted this restriction.

In Green v. Douglas County, the court ruled that the limitation on home occupations is based on whether the structure is "commonly associated" with uses permitted in the zone, not on the structure’s design. However, LUBA disagrees with Burch’s interpretation, noting that while the statute doesn't explicitly address size, it does allow for the consideration of whether a building is "extreme or atypical," including being unusually large. The hearings official's interpretation of "normally" to mean "commonly" or "to a normal degree" was deemed reasonable. This interpretation allows decision-makers to disallow home occupations in structures that are excessively large or atypical for the ML zone. Thus, LUBA concludes that the size of a structure can be a valid consideration in determining whether it is normally associated with permitted uses and denies Burch's first assignment of error.

Burch, in their second assignment of error, contends that the hearings official's decision to confine the home occupation use to the pole barn alone, and not the wings, is not supported by substantial evidence. Burch argues that the combined structure of the pole barn and the wings is typical for the ML zone, citing contractor testimony and photographs as evidence. They maintain that the findings by the hearings official on building size were not based on substantial evidence, particularly regarding the size comparison with other buildings in the zone.

1. Size of the Structure: Burch challenges the hearings official’s conclusion that the pole barn, combined with the wings, was too large to be "normally associated" with uses in the ML zone, arguing that the structure should be considered typical. The county staff had noted that the pole barn's size was larger than the average residential accessory structure (1,528 square feet) and even larger than most agricultural structures, with an average size of 2,238 square feet. The only agricultural structure exceeding Burch’s pole barn in size was 15,120 square feet, which was included in the county’s data. Burch’s contractor had characterized the pole barn and wings as "medium-sized," yet the county staff's data suggested that the size was atypical.

The hearings official concluded that, aside from one outlier, no other agricultural structures exceeded 4,000 square feet, and the size of Burch’s structure (4,032 square feet plus wings) was not "normally associated" with uses in the ML zone. Burch's argument that the hearings official was required to rely on their contractor's evidence was rejected because the contractor’s claims were considered conclusory and not adequately supported by further evidence.

LUBA found that substantial evidence supported the hearings official’s conclusion. The size of the structure was unusually large compared to other structures in the area, and the county’s evidence was deemed reasonable enough for a local decision-maker to rely upon.

1. Use of the Wings: Burch further argues that the planning staff erroneously focused on residential accessory uses when evaluating the wings, rather than farm or forest uses allowed in the ML zone. The hearings official, however, did not agree with the planning staff and considered whether the wings, either with or separate from the pole barn, could be considered buildings "normally associated" with uses in the ML zone, which includes farm use. The official concluded that Burch failed to meet the burden of proving that the wings were normally associated with such uses.

Burch also claimed that there was no substantial evidence that the wings were specialized for canine use, which they argued was implied by the county’s findings. However, LUBA found no such finding in the record. Instead, the hearings official’s determination was based on the overall size of the structure, not any specialized use.

LUBA denied Burch’s second assignment of error, affirming the hearings official's imposition of Condition 2d, which restricted the home occupation use to the pole barn without the wings. This decision was based on substantial evidence in the record, including the size of similar structures in the ML zone and the failure of Burch to demonstrate that the wings met the standard of being "normally associated" with uses in the zone.