By Eve Goldman | 4.5-minute read
Representing affiliate Friends of Yamhill County (FYC), 1000 Friends staff attorneys made winning arguments in a case that furthers the protection of high-value farmland. This case also strikes a crucial blow against developers attempting to exploit laws allowing home-based businesses, or “home occupations,” to justify the siting of luxury hotels in exclusive farm use zones.
In Friends of Yamhill County, LUBA No. 2022-090 (Dec. 17, 2025, Lancaster/15660 Ground), the Oregon Land Use Board of Appeals (LUBA) agreed with FYC: Hotels are not allowed in the exclusive farm use zone. Small businesses operated by homeowners in their own homes are. The applicant for a home occupation permit to allow overnight lodging in a 10,500 square-foot structure with nine guest suites, an additional “caretaker suite,” and a 23,000 square-foot parking lot with at least fourteen parking spaces, the had to show that the structure was a “dwelling” within the meaning of the home occupation statute, and not a hotel.
County records show the property was purchased by the current owner in 2019 for $480,000, approximately $6,000 per acre, but is now valued at over $60,000 per acre—a 1,000% increase in value in just six years, which is primarily attributable to the value of the hotel itself, according to Sid Friedman, Yamhill County farmer and FYC board member.
“That 1,000% increase is due almost entirely to the value of the hotel,” says Friedman. “Land speculation surrounding the demand for high-end commercial hospitality and entertainment businesses is making Yamhill County’s agricultural land unaffordable for farmers.”
In 2022, the landowner obtained a home occupation permit for the ten-suite hotel appealed in this case—which opened for business in August 2023. The landowner also obtained permits to hold an agritourism event, open a farmstand, sell alcohol at the farmstand, and create a wine tasting room.
“In zoning law, home occupations are small, inconspicuous, home-based businesses operated out of someone’s home, whether that home is in an urban neighborhood or in the country,” says Jim Johnson, 1000 Friends Working Lands Policy Director. “While the legislature wanted rural landowners to have the opportunity to run ‘accessory occupations’ such as music lessons and tax preparation within their homes, it never anticipated the current exploitation of the home occupations statute to authorize luxury hotels in the exclusive farm use zone.”
In order to reach its December decision in 15660 Ground, LUBA relied heavily on another recent FYC victory in the Oregon Supreme Court: Friends of Yamhill County v. Yamhill County, 373 Or 790 (2025)(Grange Hill III). In Grange Hill III, 1000 Friends staff attorneys again represented FYC in the appeal of a home occupation permit to operate an overnight lodging facility in an 8,200 square-foot structure that included nine guest suites, an “innkeeper’s suite,” a common area, and a fitness center.
In Grange Hill III, FYC argued that the proposed structure was not a “dwelling” within the meaning of the home occupation statute because it was not designed and used as a home or primary residence and it had many of the design characteristics of a motel or hotel. In addition, FYC argued that the applicant had failed to show that the proposed structure met the requirements for a type of dwelling approved in the zone—such as a farm operator dwelling or relative help dwelling—and that the home occupation statute required such a showing.
The Oregon Supreme Court agreed that the applicant had failed to show that the proposed structure was a type of dwelling allowed outright in the exclusive farm use (EFU) zone and held that such a showing was required. The court also recognized that a structure’s design, including applicable building code standards, was relevant to whether or not the structure was a dwelling within the meaning of the home occupation statute.
In 15660 Ground, LUBA remanded the county’s decision approving a home occupation permit for the 10-suite structure, directing the county to determine whether the structure was a type of dwelling allowed outright in the EFU zone and whether the structure's design indicated that it was a dwelling or a hotel.
"This case applies the simple proposition clarified by the Oregon Supreme Court in Grange Hill III: A home-based business or ‘home occupation’ must be operated out of someone’s home and not be a commercial building such as a hotel or motel,” says Blair Batson, 1000 Friends Senior Staff Attorney. “Counties are charged with making the distinction between a personal residence and a hotel, based on both the criteria for dwellings allowed outright in the EFU zone and the design characteristics of the structure for which the home occupation is proposed.”
These victories clarify that hotels are not allowed in Oregon’s EFU zones, which are designated for production agriculture, but are feeling intense pressure for more tourist-oriented development. This is particularly true for Oregon’s wine-growing regions. The agricultural land at issue in 15660 Ground is almost entirely within the 57,000-acre Yamhill-Carlton American Viticultural Area, one of Yamhill County’s six designated wine-growing regions.
“Vineyards make for beautiful scenery, but like farmers in the Napa Valley, we are fighting a wave of commercial businesses selling our scenery at the expense of our farming,” Jason Lett, owner and proprietor of Eyrie Vineyards. “We welcome tourism, but not on our high-value farmland that supports a $7.2 billion wine industry providing 40,000 Oregon jobs.”