(1) As used in this section:

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(a) ‘Affordable housing’ means residential property:

(A) In which:

(i) Each unit on the property is made available to own or rent to families with incomes of 80 percent or less of the area median income;

(ii) The average of all units on the property is made available to families with incomes of 60 percent or less of the area median income; or

(iii) A manufactured dwelling park is operated that serves only households with incomes of 120 percent or less of the area median income; and

(B) Whose affordability, including affordability under a covenant as described in ORS § 456.270 to 456.295, is enforceable for a duration of no less than 30 years.

(b) ‘Area median income’ means the median income for the metropolitan statistical area in which housing is located as determined by the Housing and Community Services Department and adjusted for household size based on information from the United States Department of Housing and Urban Development.

(2) A local government shall allow affordable housing if the proposed affordable housing is on property that is:

(a) Owned by:

(A) A public body, as defined in ORS § 174.109;

(B) A nonprofit corporation that is organized as a religious corporation;

(C) A nonprofit corporation that is organized as a public benefit corporation whose primary purpose is the development of affordable housing;

(D) A housing authority, as defined in ORS § 456.005; or

(E) A manufactured dwelling park nonprofit cooperative, as defined in ORS § 62.803; or

(b) Zoned:

(A) For commercial uses;

(B) To allow religious assembly; or

(C) As public lands.

(3) A local government shall allow the conversion of a building or a portion of a building from a commercial use to a residential use.

(4) Subsections (2) and (3) of this section:

(a) Prohibit the local government from requiring a zone change or conditional use permit before allowing the use.

(b) Do not trigger any requirement that a local government consider or update an analysis as required by a statewide planning goal relating to economic development.

(c) Except as provided in paragraph (d) of this subsection, do not apply on lands where the local government determines that:

(A) The development on the property cannot be adequately served by water, sewer, storm water drainage or streets, or will not be adequately served at the time that development on the lot is complete;

(B) The property contains a slope of 25 percent or greater;

(C) The property is within a 100-year floodplain; or

(D) The development of the property is constrained by land use regulations based on statewide land use planning goals relating to:

(i) Natural disasters and hazards; or

(ii) Natural resources, including air, water, land or natural areas, but not including open spaces or historic resources.

(d) Do apply to property described in paragraph (c)(C) and (D)(i) of this subsection if more than 60 percent of the lands within the urban growth boundary that the property is within are located within a tsunami inundation zone or if more than 30 percent of the lands within the urban growth boundary that the property is within are located within a 100-year floodplain.

(5) The development of housing under subsection (2) of this section may occur only:

(a) Within an urban growth boundary; and

(b) On lands zoned to allow for industrial uses only if the property is:

(A) Publicly owned;

(B) Adjacent to lands zoned for residential uses or schools; and

(C) Not specifically designated for heavy industrial uses.

(6) The development of housing under subsection (3) of this section:

(a) Applies only within an urban growth boundary of a city with a population of 10,000 or greater;

(b) May not occur on lands zoned to allow industrial uses;

(c) May require the payment of a system development charge as defined in ORS § 223.299 only if:

(A) The charge is calculated pursuant to a specific adopted policy for commercial to residential conversions adopted on or before December 31, 2023; or

(B) The charge is for water or wastewater and includes an offset for at least 100 percent of the water or wastewater system development charges paid when the building was originally constructed; and

(d) May not be subject to enforcement of any land use regulation that establishes a minimum number of parking spaces that is greater than the lesser of:

(A) The amount that may be required for the existing commercial use; or

(B) The amount that may be required in lands zoned for residential uses that would allow the converted development.

(7) The development of housing allowed under subsection (4)(d) of this section may only occur:

(a) Within an urban growth boundary located no more than 10 miles from the Pacific Ocean;

(b) In areas that require compliance with minimum federal regulations under the National Flood Insurance Program or with local floodplain development regulations adopted by the applicable local government, provided that the local regulations are equal to or more stringent than the minimum federal regulations;

(c) In locations that do not include floodways or other areas with higher risks of greater water velocity and debris flow;

(d) In communities with emergency response, evacuation and post-disaster plans that have been updated for the housing development; and

(e) In areas that are not public parks.

(8) A local government may prohibit affordable housing or require a zone change or conditional use permit to develop affordable housing in areas described in subsection (4)(d) of this section.

(9) A local government shall approve an application at an authorized density level and authorized height level, as defined in ORS § 227.175 (4), for the development of affordable housing, at the greater of:

(a) Any local density bonus for affordable housing; or

(b) Without consideration of any local density bonus for affordable housing:

(A) For property with existing maximum density of 16 or fewer units per acre, 200 percent of the existing density and 12 additional feet;

(B) For property with existing maximum density of 17 or more units per acre and 45 or fewer units per acre, 150 percent of the existing density and 24 additional feet; or

(C) For property with existing maximum density of 46 or more units per acre, 125 percent of the existing density and 36 additional feet.

(10)(a) Subsection (9) of this section does not apply to housing allowed under subsection (2) of this section in areas that are not zoned for residential uses.

(b) A local government may reduce the density or height of the density bonus allowed under subsection (9) of this section as necessary to address a health, safety or habitability issue, including fire safety, or to comply with a protective measure adopted pursuant to a statewide land use planning goal. Notwithstanding ORS § 197.350, the local government must adopt findings supported by substantial evidence demonstrating the necessity of this reduction. [Formerly 197.308]