CUSTOMER & COMMUNITY NOTIFICATION
June 27, 2018
Contact: Matt Wickstrom, Matt.Wickstrom@portlandoregon.gov 503-823-6825
City Council Extends the SDC Waiver for ADUs, with Conditions
City Council passed an ordinance on June 27, 2018 to extend a waiver of system development charges (SDCs) for accessory dwelling units (ADUs) with additional requirements to contribute to Portland’s housing capacity.
- Property owners who participate in the ADU SDC Waiver Program receive a waiver of SDC fees.
- The program requires the property owner to sign a covenant stating that neither the ADU nor the house will be rented as accessory short-term rentals (ASTRs) for 10 years.
- Listing any on-site structure on a short-term rental platform is a violation of the covenant. Participating owners who violate the covenant will be required to repay waived fees at a rate of 150 percent the current SDC rates.
- The program does not restrict the rental of on-site structures including the ADU; however tenancy must be arranged on a month-to-month basis or longer.
- Property owners who don’t participate in the ADU SDC Waiver Program will pay full SDC fees and can list the ADU on a short-term rental platform.
- The revised ADU SDC Waiver Program goes into effect August 1, 2018 and doesn’t have an expiration date. The program is not retroactive and does not apply to property owners who previously received ADU SDC waivers if approval of final inspection is received no later than June 30, 2020.
Staff from the Bureau of Development Services (BDS), Water Bureau, Portland Parks & Recreation, Portland Bureau of Transportation, Bureau of Environmental Services and Revenue Division of the Bureau of Revenue and Financial Services collaborated to develop a process for development applications that involve SDC waivers for ADUs and to ensure property owners who accept the SDC waiver sign and record the covenant. Title 17 and Title 21 were also updated to reflect the ADU SDC Waiver Program.
The Revenue Division will be responsible for administering the restrictive covenant and enforcing violations. There is a $600 application fee for the ADU SDC waiver, which will help fund a position in the Revenue Division to oversee the program and administer covenants. The Revenue Division will also collect annual data about rents charged for ADUs that receive SDC waivers to report to City Council every two years.
In 2009, the year before SDC fees were waived, 24 permits for new ADUs were issued - both newly constructed and conversions of existing living space. In 2016, 615 ADU permits were issued, amounting about 10 percent of permits for new dwelling units that year.
Additionally, due to the need to complete and record the restrictive covenant, it will be less likely that permits for ADUs can be approved over the counter in the Development Services Center.
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