ADU SDC Waiver Update

ADU SDC Waiver Extended, With Conditions

Portland City Council has approved extending the System Development Charges (SDC) Waiver for Accessory Dwelling Units (ADUs), though it has some conditions attached this go around. They are as follows:

  • 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.
  • 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.

We, along with the entire ADU industry, have been biting our nails over this decision. How will this effect you? How will this affect the industry? Time will tell. To date, 27% of ADUs built in Portland were built to be used exclusively for Short Term Rentals, with many more using STR to supplement the cost when not being used for personal use (friends and family, hobbies, etc.).

The Good News: At SQFT Studios, we have an option for an accessory structure that can be used for STR and is not subject to SDCs ever! Check out our Guest Suites and learn how to generate income on your property.

So, in conclusion, if you do not intend to use your ADU for STR, you will be able to qualify for the SDC Waiver! If you intend to use your ADU for STR, even once in a while, you do not qualify for the waiver. If you need a solution for a unit for STR and want to avoid the SDCs, look towards our Guest Suites.

You can read the press release here: https://www.portlandoregon.gov/bds/article/689356

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