House Bill 2138 Adoption Process: City staff sent an official notice to the Department of Land Conservation and Development (DLCD) on September 21, 2026, regarding the City’s intention to adopt House Bill 2138 provisions into the Sandy Municipal Code. In 2025, the Oregon legislature adopted House Bill (HB) 2138 expanding allowable middle housing and applying such regulations to more jurisdictions and certain unincorporated areas. HB 2138 requires local governments to update land use regulations by January 1, 2027. Changes required by HB 2138 include:

1. Duplexes. Cities are required to allow not just attached but also detached duplexes. Sandy already allows detached duplexes, but HB 2138 will now prevent Sandy from prohibiting them in the future.
2. Single Room Occupancies (SROs). This is an unfamiliar term to many (it was introduced by the legislature in 2023) which refers to “A residential development with no fewer than four attached units that are independently rented and lockable and provide living and sleeping space for the exclusive use of an occupant but require that the occupant share sanitary or food preparation facilities with other units in the occupancy.” It has been described as similar to a dorm. These are already allowed in Sandy as required by existing law, but HB 2138 made several significant changes. For one, SROs must now be allowed to be detached, rather than just attached. It is unclear what that is intended to look like, but in theory it could look a lot like a cottage cluster, but without individual kitchens and instead some sort of share kitchen facility. In addition, the bill increases the number of units allowed for an SRO in a multi-unit zone to be three times the maximum unit density of the zone.
3. Bonus units. When one or more of the units in a middle housing development are accessible or affordable, HB 2138 requires cities to allow an additional bonus unit. This means that, in these circumstances, the City will be required to allow triplexes rather than just duplexes.
4. Retention of existing units. The City will now be required to allow an existing unit on a property to be retained when a middle housing development is proposed. In other words, when a property has an existing single-family dwelling, the owner may be able to build a duplex on the property and keep the single-family dwelling, provided the new duplex complies with siting and design standards.
5. Limitations on when the City can require a traffic impact study for middle housing developments.

The City of Sandy will hold two public hearings regarding these code amendments. The two public hearings are as follows:

• October 26, 2026 at 6:30 p.m.: Planning Commission
• November 16, 2026 at 7:00 p.m.: City Council

Bigfoot Growlers Expansion: The owners of Bigfoot Growlers at 39261 Proctor Blvd. have submitted building permits to expand the business further into the existing building. This expansion would increase seating at the facility by 14 indoor seats, and provide additional amenities, such as a pool table, fireplace, and a bar. This expansion was allowed within the current constraints of the moratorium and consent decree as the existing building space already accounted for one additional ERU of sanitary sewer capacity.

Building Division Update:
Permits Issued = 16
C of O’s Issued = 1 for Jade Leaf Chinese Fusion
ERUs Issued = 0

At the end of September, the Building Division was actively reviewing building permits for five (5) new single family homes in the Sandy Woods II and Jewelberry Meadows subdivisions. Staff anticipates issuing these five ERUs in October or November.

36795 Industrial Way Requirements: An application for Northwestern Towing Company, a regional towing company, is currently being reviewed through a Type I Design Review. The use is proposed to occupy 36795 Industrial Way. The company has informed City staff that they have contracts with both the City of Sandy and Clackamas County Police Departments. The site is 1.25 acres and fronts on both Hwy 26 and Industrial Way.

To move forward with the formal review of this application, the City is still waiting for an updated site plan that addresses requirements such as adding pavement for all vehicle storage, vehicle screening elements, and a narrative describing their overall site functionality. The site can store a significant number of vehicles so the applicant must describe how the vehicles will be screened. 

In addition, the City is requiring the applicant to provide a detailed plan on how they will be preventing engine oils, radiator fluids, transmission fluids, brake fluids, and any other liquid that may flow from a wrecked vehicle from entering the ground. City staff will need to see what type of detainment system and what type of emergency cleanup measures will be utilized. To limit environmental impacts, City staff have reached out to the Oregon Department of Environmental Quality (DEQ) to discuss any relevant permits that may be assigned to a towing company. Most of items discussed pertained to continued monitoring and protection from ground contamination.

Business Licenses Update:
14 new business licenses were applied for in the month of September.

• Inside city limits business licenses for commercial/industrial: 3
• Home based business licenses: 4
• Outside city limits business licenses: 7

Code Enforcement Report:

• 2 citations were issued in the month of September
  • 1 for Noxious Vegetation
  • 1 for Removing a Designated Retention Tree
• The ‘Annual Sidewalk Repair Audit’ identified 10 properties repair or replace damaged sidewalks and driveway approaches. All inspections of the improvements been approved by the Public Works Department.
• The former dialysis center property had several code violations including overgrown noxious vegetation, litter, and graffiti. Three citations were issued, but the property has since been brought into compliance.