Portland’s ADU SDC Waiver program could save you thousands
Portland is at a pivotal moment in its housing journey. With affordability challenges mounting and housing supply lagging behind demand, innovative solutions are more crucial than ever. One such solution is the Accessory Dwelling Unit (ADU) System Development Charge (SDC) Waiver Program, which offers homeowners a financially viable path to contribute to the city’s housing needs. At NW Tiny Homes, we specialize in crafting high-quality tiny homes that align seamlessly with this initiative, providing both community benefits and personal investment opportunities.
Understanding Portland’s housing challenges
The housing landscape in Portland has become increasingly strained. According to this Axios article, affording a typical home in the Portland metro area now requires an income of $152,000 annually, nearly three times higher than a decade ago, as reported by Redfin. Despite a slight improvement in affordability from 2023 to 2024, Portland remains an expensive city due to elevated mortgage rates, record-high prices, and limited housing stock. Oregon faces a significant housing shortage and needs to build 29,500 homes each year to address the issue, warned the state’s chief economist Carl Riccadonna. In 2024, only 14,270 residential permits were secured, marking a 19% decrease from the previous year. Compounding the issue, Portland’s homeowner vacancy rate has reached near all-time lows since the onset of the pandemic, indicating a tight housing market with limited availability. In 2024, the city’s housing permits issued dropped by 47.43% from 3,089 to 1,624, further highlighting the challenges in increasing housing supply.
To address these challenges, the City of Portland offers the ADU SDC Waiver Program, incentivizing homeowners to build ADUs by waiving certain development fees. This waiver applies to new ADUs that are owner-occupied or rented long-term (on a month-to-month basis or longer); short-term rentals are not eligible. By participating in this program, homeowners can save thousands in fees, making the construction of ADUs more accessible and financially feasible. The program requires a 10-year commitment to not use the ADU or any part of the property for short-term rentals, ensuring that these units contribute to long-term housing solutions. This approach not only benefits individual homeowners but also supports the broader community by increasing the availability of affordable rental options.
What are System Development Charges?
System Development Charges (SDCs) are one-time fees imposed by the City of Portland on new developments, additions, or changes in property use. These charges help fund the expansion of essential public infrastructure, including sewer systems, parks, water facilities, and transportation networks, to accommodate the increased demand from new construction. For instance, constructing an accessory dwelling unit (ADU) can trigger SDCs across multiple city bureaus, potentially amounting to significant costs. Specifically, a small residential unit under 700 square feet may incur over $7,500 in Parks SDCs alone, with additional fees for sewer, stormwater, water, and transportation services. By participating in the ADU SDC Waiver Program, homeowners can be exempt from these substantial fees, making the addition of an ADU more financially accessible and supporting the city’s efforts to increase affordable housing options.
Maximize your property’s potential
Integrating a tiny home as an ADU presents a compelling opportunity for homeowners. These compact, efficient dwellings are designed to maximize space and functionality, making them ideal for long-term rentals. By placing a tiny home in your backyard, you can generate steady rental income while contributing to the city’s housing supply.
To install a manufactured tiny home as an accessory dwelling unit (ADU) in Portland, homeowners must obtain a building permit for Residential (RS) accessory structures. In addition to the building permit, projects may necessitate separate electrical, plumbing, or mechanical permits, depending on the scope of work. Homeowners undertaking the project themselves can sign trade permit applications; however, electrical work must be performed by a licensed electrical contractor. Contractors involved in the project must hold valid licenses issued by the Oregon Construction Contractors Board (CCB), and their license numbers must be included in the permit application and associated materials. For detailed guidance, the City of Portland provides resources and forms related to manufactured home residential building permits on their official website.
Our tiny home models are crafted to meet the specific requirements of Portland's ADU regulations, and are built with quality materials and thoughtful design, ensuring comfort and durability for yourself or tenants. By choosing NW Tiny Homes for your ADU, you not only invest in your property but also play a part in alleviating Portland’s housing crisis.
A better build for you—and your neighbors
Choosing a manufactured tiny home from NW Tiny Homes comes with a range of practical perks compared to a custom site-built ADU. First and foremost, our homes are more affordable—thanks to streamlined factory production, we can deliver high-quality craftsmanship at a lower cost. Because the units are built off-site and delivered ready to place, you’ll also avoid the prolonged construction noise, dust, and disruption that can affect both your daily life and your neighbors’ peace and quiet. Plus, with faster installation timelines and fewer permitting hurdles, you can start generating rental income or housing loved ones much sooner. It’s a smart, neighbor-friendly alternative that doesn’t sacrifice style or comfort.
Be a part of the solution
If you’re considering adding an ADU to your property, now is the time to act. The ADU SDC Waiver Program offers significant financial incentives, and the demand for affordable housing continues to grow. By partnering with NW Tiny Homes, you can navigate the process with confidence, knowing that your investment aligns with both personal and community goals.
Explore our range of tiny homes and discover how you can make a meaningful impact on Portland’s housing landscape while enhancing your property's value.