Portland Extends ADU Incentive to increase density
Portland’s City Council has voted unanimously to extend a popular fee waiver for accessory dwelling units, according to local blog Accessory Dwellings.
The waiver of System Development Charges, or SDCs, was set to expire in July, leading advocates for ADUs to lobby for an extension.
Accessory dwelling units, which include basement apartments and backyard tiny houses, have emerged in Portland as a popular way to increase residential housing density without sacrificing the single-family character of a neighborhood.
System Development Charges, which pay for parks and other shared city infrastructure, were first waived for ADU development by city council in 2009. The waiver saves builders of ADUs between $12,000 and $20,000, a meaningful incentive to build new infill housing.
The new waiver will extend through July 2018, but another major hurdle for aspiring ADU developers lingers: tax uncertainty.
A decision last year by Multnomah County tax assessors triggered an uproar among ADU enthusiasts when the county began reassessing entire properties where ADUs were being developed. The move increased annual tax bills by as much as $6,000 for some unsuspecting homeowners.
Though the tax implications of building an ADU remain a bit unclear, Oregon’s Department of Revenue is expected to release rule clarifications sometime this year for counties to follow that should make the process more certain.
In the meantime, the city’s ADU fee waiver extension is a tangible move to incentivize much-needed infill development. Despite a recent flurry of apartment development, Portland counts a 4,000-unit shortfall in housing inventory, one factor contributing to record-low vacancy and a sharp rise in rental rates.
The Portland City Council will review potential amendments to the fee waiver extension at its May 18 meeting.
The whole story can be found here on the Portland Business Journal website.
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