Portland Waived SDCs for New Housing. Your ADU Didn't Make the List.
Chris Koss, AIA|Published August 5, 2026
Portland waived development fees on most new housing through 2028, worth tens of thousands a unit. ADUs are cut out, and still run on an older waiver that swaps those fees for a 10-year ban on short-term rentals.
Housing under construction in Portland, where the city is testing what a fee holiday does to the pace of building. Portland Permitting and Development.
Portland just handed thousands of homebuilders a fee holiday worth roughly nineteen thousand dollars a unit, and then wrote your backyard cottage out of it. The city's temporary exemption from system development charges runs from August 15, 2025 through September 30, 2028, but it does not cover accessory dwelling units, which still fall under a separate, older waiver that trades those charges for a decade without short-term rental income.
The short version:
- Portland's headline SDC exemption for new housing skips ADUs by name; a backyard unit still uses the ADU SDC Waiver, a binding 10-year covenant.
- The waiver zeroes out SDCs that run into the tens of thousands, but it bars every structure on the lot from short-term rental for ten years, and backing out costs 150 percent of the current fees.
- Across the citywide program's first 1,720 units, Portland counted 32.77 million dollars in waived charges, about nineteen thousand dollars per unit, the same money an ADU owner is bargaining over.
The number: about nineteen thousand dollars, per unit
Portland does not publish one tidy SDC figure for an ADU, because the charge is stitched together from four bureaus (sewer, parks, transportation, and water) and it shifts with your lot. The cleanest public number comes from the citywide exemption's first report. As of January 15, projects in that program represented 1,720 units, and the city put the foregone charges at 32,773,500 dollars, per its February report. Divide it out and you land near nineteen thousand dollars a unit. That is the size of the check an ADU builder is trying not to write.
If you are a Portland homeowner weighing a backyard unit, here is the ledger the waiver actually changes:
| Line item | Without the ADU waiver | With the ADU SDC waiver |
|---|---|---|
| Permit and plan review | roughly 1,900 dollars | roughly 1,900 dollars |
| System development charges (four bureaus) | tens of thousands, near 19,000 dollars on a typical lot | 0 dollars |
| Strings attached | none | 10-year covenant, no short-term rental on any structure |
| Cost to back out later | not applicable | 150 percent of the current SDCs |
The covenant is the price. The waiver is not a discount you pocket and forget. It records a 10-year agreement on your property, and Portland is blunt about the scope: during those ten years, no structure on the lot can be offered as a short-term rental, and the city spells out that this includes single bedrooms in the main house. List one room on Airbnb and you have broken it. Sell the house, and the covenant rides along to the next owner.
Backing out is expensive by design. On a nineteen thousand dollar SDC bill, revoking the covenant to open the unit to nightly stays would cost about 28,500 dollars, which is the fees you originally skipped plus a 9,500 dollar penalty for the privilege. That is the same rate the city charges if you simply violate the covenant and get caught. The waiver, in other words, is a bet that a long-term tenant beats a nightly one for at least a decade.
Why your ADU is on the outside
The exclusion is not an oversight; it is written into the ordinance. Portland's temporary exemption, adopted last July to chase 5,000 new units in three years, carves ADUs out in plain language:
The dwelling unit is not an accessory dwelling unit or caretaker quarters, as those terms are used in Title 33 of Portland City Code, or a transient lodging facility as defined in Section 24.31.010.
That sentence, from the city's exemption program page, is the whole story for a backyard builder. Apartments, infill houses, and congregate living get the clean, no-strings holiday through 2028. ADUs get pointed back to the covenant waiver, the same deal Portland has offered for years and the reason the city's ADU boom happened at all. You can read the underlying terms on the ADU SDC Waiver page and the four bureau rates on the SDC fee schedule.
Our read: excluding ADUs from the headline exemption is a quiet downgrade dressed as continuity. Portland is steering its most generous housing incentive toward apartments and infill while leaving backyard builders with a 2010-era bargain that asks them to surrender a rental option their neighbors building fourplexes now keep for free. It is defensible on paper, since the ADU waiver already exists. It still means the smallest, cheapest form of new housing carries a string the city just cut from everything else.
The cross-street check. This trade looks very different one state line away. In Washington, HB 1337 caps ADU impact fees at 50 percent of the single-family charge with no covenant attached, so a Seattle owner pays a reduced fee and keeps every rental option Portland asks you to give up. In California, there is no statewide SDC-style holiday at all: the CalHFA grant that once refunded up to 40,000 dollars has sat paused since late 2023, so an LA or San Diego owner pays local fees in full and hopes a program reopens. Portland's version is the most generous of the three on the sticker price and the only one that bills you a decade of short-term rental income to collect it.
The math has a real deadline behind it. When we toured the Wedge, a passive-solar ADU built to squeeze value out of a tight Portland lot, the SDC waiver was part of what made the budget close. The citywide exemption sunsets September 30, 2028; the ADU waiver has no such end date today, but nothing about Oregon fee policy is permanent, and the last big Portland ADU subsidy was scaled back once already.
For a Portland owner, the decision the waiver forces is simple to state and hard to answer: is ten years of guaranteed long-term-only renting worth roughly nineteen thousand dollars up front? If you were never going to run a nightly rental, the covenant costs you nothing and the waiver is close to free money. If you wanted the flexibility, price the 150 percent exit before you sign, because the city has priced it for you already.
When you are ready to turn covenant math into a real budget, A-du's build marketplace lets you compare builder bids on the same Portland scope, fees included.
The next question is whether Portland renews the citywide exemption in 2028, and if it does, whether ADUs finally get invited in.
Elsewhere on the ADU beat
- San Diego's City Council tightened its ADU Bonus Program with new community enhancement fees and a rule barring bonus projects on streets without two evacuation routes, via FOX 5 San Diego.
- Seattle is refreshing its pre-approved DADU catalog, with new plan winners expected in August and a gallery relaunch later this year, via Seattle OPCD.
- New York City's HPD and Department of Buildings rolled out new tools this spring to help homeowners turn backyards into ADUs, via NYC HPD.