The city may approve an application made under ORS 307.667 if it finds that:
(1) For a property that is an existing qualified dwelling unit, the qualified dwelling unit constitutes single-unit housing; or
(2) For a property that is a newly constructed qualified dwelling unit:
(a) The proposed qualified dwelling unit will constitute single-unit housing;
(b) The owner has agreed to include the design elements adopted under ORS 307.657 (3) in the construction; and
(c) The construction will result in public benefits beyond the period of exemption.