The Service Development Charge (SDC) waiver for Accessory Dwelling Units (ADUs) has been a boon for the ADU industry. Homeowners and builders alike have taken full advantage of an average savings of $17,000 when building an ADU for many years. The waiver is set to expire July 31st, 2018, but now it is going to City Council for a vote on whether to extend it, this time with a few twists.
For those unfamiliar with this topic, we will give a brief overview. SDCs are fees the Bureau of Development Services (BDS) issues for every new unit of housing. When building a new house, ADU, or apparent, SDCs are issued as part of the permit cost. These fees go to several departments (Bureau of Environmental Services, Portland Bureau of Transportation, Portland Parks and Recreation, and Portland Water Bureau) in order to service, maintain, and upgrade our infrastructure in order to support an additional family within the city. As Portland is trying to develop new innovative ways to grow up rather than out (due to our urban growth boundary) and increase density, they have embraced the ADU. To kickstart a new industry, in 2010 Portland decided to waive the SDC fees, saving owners, on average, $17,000. And it has certainly done that. Just recently have ADU permits exceeded single family home permits. ADUs are popping up everywhere.
Over the years, they have extended the waiver a few times. Each time it comes up to the expiration date, there has been a healthy amount of fear from homeowners and builders, knowing that the decision will have a substantial impact on the industry as a whole.
This time, it’s a little different.
Chloe Eudaly, Portland City Commissioner, has introduced a new idea: permanently waive the SDCs for ADUs. But there’s one catch. In order to avoid the SDCs for your ADU, you would have to agree to not use your ADU for short-term rental, such as through Airbnb. The idea behind this is that if the city is going to waive such a high dollar fee, the city should receive some benefit from that. The benefit would be additional housing stock, and hopefully, affordable housing stock. Owners can still build ADUs for short-term rental, but they would be subject to the SDCs.
If this becomes law, we believe it will help to stabilize the ADU market. The opportunity to build an ADU without these fees will be here to stay, so no rushing every few years to get permits in before the expiration date. It also helps homeowners by removing one more worry, among many, when building an ADU in their backyard.
Are you interested in helping to get these new rules passed? Well, on May 2nd, at 3:15pm, city council will hold a vote on whether to permanently extend the waiver. This is an open city council meeting, so any and all are encouraged to attend. You can speak or simply support the movement with your presence. We’ll be there in support of the new rules and hope to see you there!