Cities shall adopt a housing capacity analysis as provided in OAR 660-008-0045. A city with a population of less than 10,000 may also elect to adopt a housing capacity analysis, as provided in ORS 197A.280(2)(d).

1. (1) At a minimum, the housing capacity analysis must include the following components:

   1. (a) An inventory of buildable land and determination of housing capacity;
   2. (b) An analysis of residential land need based on the needed housing types and allocated housing need; and
   3. (c) A comparison of residential land need and housing capacity.
2. (2) The buildable lands inventory must document the amount of buildable land in each plan designation that allows residential use under clear and objective standards in accordance with sections (4) through (9) of this rule. Sufficient buildable land shall be designated on the comprehensive plan map or in the zoning map to accommodate needed housing by type and density range in accordance with the allocated housing need. For cities described in ORS 197A.015(3), the needed housing types are determined in the contextualized housing need. Needed densities are determined in the housing capacity analysis.
3. (3) When preparing the buildable lands inventory, the local government must coordinate with public entities on any publicly owned land they own to determine if the land may be suitable and available for the development of needed housing. Public entities include school districts, colleges, universities, and transit districts.
4. (4) When inventorying partially vacant land to accommodate housing needs, a local government may utilize a reasonable land market supply factor to account for land that will not develop over the 20-year planning period with quantifiable validation and documentation of methodology used consistent with Goal 2 requirements. As a safe harbor, when utilizing the land market supply factor, a local government may reduce the total estimated residential capacity for partially vacant land by ten percent.

5. (5) As safe harbors, a local government, except a city with a population over 25,000 or a metropolitan service district described in ORS 197.015(13), may use the following assumptions to inventory the capacity of buildable land to accommodate housing needs:

   1. (a) The infill potential of developed residential lots or parcels of one-half acre or more may be determined by subtracting one-quarter acre (10,890 square feet) from the unconstrained acreage for the existing dwelling and assuming that the remainder is buildable land;
   2. (b) Existing lots of less than one-half acre with an existing dwelling may be assumed to be fully developed.

6. (6) As a safe harbor, a local government with a population over 25,000 may use the following assumptions to inventory the capacity of buildable land to accommodate housing needs:

   1. (a) The infill potential of developed residential lots or parcels smaller than one-half acre in the lowest-density residential comprehensive plan designation may be determined by subtracting one-quarter acre (10,890 square feet) from the unconstrained acreage for the existing dwelling;
   2. (b) Existing lots of less than one-quarter acre, in the lowest-density comprehensive plan designation, with an existing dwelling may be assumed to be fully developed;
   3. (c) Except for lots in subsection (b), if the infill potential value determined in subsection (a) or as otherwise quantified, is equal to or greater than two times the minimum lot size, the land in excess of one-quarter acre is inventoried as buildable land.
7. (7) When determining capacity for each plan designation included under section (2), a local government must use the data described in ORS 197A.270(4) and cannot estimate the forecasted capacity for any residential designation to be greater than the average achieved density since the last review without quantifiable validation for such departures.
8. (8) As a safe harbor, when inventorying vacant and partially vacant land to accommodate housing needs, a local government subject to ORS 184.455 may progressively discount the estimated residential capacity by one-third each HCA cycle for individual lots or parcels that have been inventoried as development-ready but have not yet developed or experienced infill.

9. (9) If not using the safe harbor in section (8) of this rule for estimating capacity on vacant and partially vacant land, a local government must discount the estimated capacity by:

   1. (a) Fifty percent for individual lots or parcels that did not develop or experience infill and were inventoried as development-ready land in two consecutive HCA cycles; and
   2. (b) One hundred percent for individual lots or parcels that did not develop or experience infill and were inventoried as development-ready land in three consecutive HCA cycles.

10. (10) For purposes of preparing housing capacity analyses as provided in OAR 660-008-0045, the following provisions apply to local governments that are subject to OAR 660-012-0315(1):

    1. (a) Following the initial designation of climate-friendly areas as required in OAR 660-012-0315, local governments shall maintain climate-friendly area zones with sufficient zoned residential building capacity to contain at least 30 percent of current and projected housing needs. However, the local government shall determine housing capacity within the climate-friendly area for the purpose of meeting identified housing needs as required by Goal 10 and this division in a manner consistent with ORS 197A.270(4) or ORS 197A.280, as applicable.
    2. (b) The local government shall calculate the zoned residential building capacity within climate-friendly areas consistent with the provisions of OAR 660-012-0315(2), or utilizing an alternative methodology as provided in OAR 660-012-0320(10). The local government shall include demonstration of compliance with this requirement in each subsequent housing capacity analysis.
    3. (c) The local government shall establish land use requirements in climate-friendly areas as provided in OAR 660-012-0320 for any newly designated climate-friendly area concurrent with or prior to the adoption of a housing capacity analysis.

11. (11) Beginning June 30, 2027:

    1. (a) A local government subject to OAR 660-012-0315(1) that has identified a need to expand its urban growth boundary to accommodate an identified residential land need shall designate and zone additional climate-friendly area(s) as provided in OAR 660-012-0315 concurrent with expansion of the urban growth boundary.
    2. (b) A local government shall designate and zone climate-friendly area(s) of sufficient size to accommodate the number of housing units equivalent to one-half of the number of additional housing units that cannot reasonably be accommodated within the current urban growth boundary.
    3. (c) The local government shall calculate the climate-friendly area needed based on zoned residential building capacity as provided in OAR 660-012-0315(2), or utilizing an alternative methodology as provided in OAR 660-012-0320(10), while the local government shall determine housing capacity within the climate-friendly area for the purpose of meeting identified housing needs as required by Goal 10 and this division in a manner consistent with ORS 197A.270(4) or ORS 197A.280, as applicable. Identified housing needs that would otherwise necessitate an urban growth boundary expansion shall only be accommodated in climate-friendly areas to the extent that the production of needed housing types within the climate-friendly areas may be anticipated consistent with ORS 197A.270(4) or ORS 197A.280, as applicable.
    4. (d) The local government may choose to designate a portion of the newly expanded urban growth boundary area as climate-friendly area if the area qualifies for designation as provided in OAR 660-012-0310(2), or may choose to designate additional climate-friendly area in other locations within the urban growth boundary that qualify for designation.
    5. (e) The local government may accommodate additional climate-friendly area(s) within one or more locations within the urban growth boundary. The designation and zoning of additional climate friendly area shall comply with all applicable requirements for climate-friendly areas as provided in OAR 660-012-0310 through OAR 660-012-0325.

Statutory/Other Authority

ORS 197.040

Statutes/Other Implemented

ORS 197A.015 - 197A.270 & ORS 197.012

History

LCDD 8-2025, adopt filed 12/23/2025, effective 01/01/2026