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Apply for an Accessory Dwelling Unit (ADU) System Development Charge Waiver

Learn more about the ADU SDC waiver program. Apply for an SDC waiver for your new ADU. If you are proposing an accessory dwelling unit you can apply for system development charges to be waived. Learn more and apply for an ADU SDC waiver now. Short-term rentals are not eligible for this program.
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The ADU SDC waiver program provides an incentive to build accessory dwelling units (ADUs) that add to housing capacity in Portland. The program waives system development charges (SDCs) with a 10-year commitment. This program is for new ADUs that are owner-occupied or rented on a month-to-month basis or longer. It does not include ADUs built to be accessory short-term rentals or rented on a less than a monthly basis.

The ADU SDC waiver program approval process is not part of the permitting process. It is a separate binding ten-year agreement. It's between the City of Portland and all of the property owners who own a property during the covenant’s life span. 

The program requires property owners who are building an accessory dwelling unit (ADU) to sign a covenant. The covenant states the ADU and the house will not be rented as an accessory short-term rental for 10 years.

Apply for an ADU SDC waiver by email

Apply for the accessory dwelling unit SDC waiver by email. The application/covenant should be scanned as one document and emailed to the Bureau of Revenue and Financial Services. Please put the permit number in the subject line of the email. Please follow the instructions in the application packet carefully:

Revenue developed the application instructions to help ensure approval. Applicants who follow the application instructions have a 99% approval rating. Not following instructions or giving us incorrect information may result in delays.

About the ADU SDC waiver program 

Revenue and Financial Services, Revenue Division, ADU Compliance administers the program. We are the independent reviewers of the program’s application/covenant. Once approved, the document is added to the permitting system for Development Services and the SDC bureaus.

Revenue has strict review policies. And, there are restrictions on the type of information we can share.

Accessory short-term rentals are not eligible for ADU SDC Waivers 

An accessory short-term rental is one in which property owners rent up to five bedrooms in a structure for time periods of less than one month. Accessory short-term rentals are often advertised on platforms such as Read more about short term rental permits

The ADU SDC Waiver Program applies to the entire property. During the 10-year time period that the program applies, no structure on the property may be rented as an accessory short-term rental. This includes single bedrooms in the main house. The covenant also explicitly states that listing a structure on the property on a short-term rental platform constitutes a violation.

The ADU SDC Waiver Program begins the day the permit receives final inspection approval. Once 10 years passes, the property is no longer subject to the program. The property owner will then have the option of renting structures as accessory short-term rentals.

Find out if a property with an ADU is in the ADU SDC Waiver program 

Permit records in Portland Maps show if the ADU SDC Waiver Program is associated with a property. Once identifying the permit associated with the ADU and see if the Revenue Bureau was a reviewer. If the Revenue Bureau was a reviewer, the process line associated with their review would state “Covenant Recorded.”

Recorder of the covenant - responsibilities and fees

If a developer is building a home with an internal ADU, the recorder of the covenant would typically be the developer and not the property owner.

If a developer builds a house with an ADU, participates in the ADU SDC Waiver Program and records the covenant, the developer isn't liable for the financial penalty if the person who purchased the home and ADU rents one as an accessory short-term rental. The covenant runs with the property, not the individual who signs and records the covenant; therefore the current property owner would be liable for the penalty.

Revoking the covenant is contrary to the purpose of the ADU SDC Waiver Program which is to increase the supply of housing in Portland. A property owner wishing to revoke the covenant would be required to pay 150% of the current SDC fees, just as a property owner who violates the covenant is required.

Get help with an ADU SDC waiver application 

Please email any questions to Revenue. We will give every effort to quickly respond with clear and helpful information. Please note, Development Services doesn't approve ADU SDC waiver program applications.

There is no official due date for presenting documents to the Revenue Division. Completing the application/covenant early in the permitting process can help make the process go more smoothly.

The information on this webpage is also available as a PDF: