Yes, with a condition. As of October 2026, the City of Portland waives system development charges for new ADUs when the owner signs a covenant not to use the property as a short-term rental for 10 years. The covenant covers the whole property, including bedrooms in the main house.
What are system development charges?
SDCs are one-time fees that help pay for public infrastructure such as sewer, water, parks and transportation when new housing is added. For a new detached ADU, a June 2026 cost guide totaled Portland's fee schedule at about $36,720, with water, sewer, parks and transportation lines making up most of it.
Who qualifies for the ADU waiver?
As of October 2026, the city's waiver page covers new ADUs that are owner-occupied or rented month-to-month or longer. Accessory short-term rentals are excluded.
What does the covenant commit me to?
- No short-term rental on the property for 10 years from final inspection approval.
- The restriction applies to the whole property, including single bedrooms in the main house.
- Revoking the covenant, or violating it, means paying 150% of the SDCs in effect at that time.
- After 10 years, the property is no longer bound by the waiver.
How do I apply?
The city asks applicants to email its Revenue Division with the permit number in the subject line. The city says applicants who follow its instructions have a 99% approval rate. We prepare the request with you as part of design and permits.
Does Portland's housing SDC exemption cover ADUs?
No. Portland's temporary SDC exemption for new housing, for permits issued from August 15, 2025 through September 30, 2028, excludes ADUs. The city points ADU projects to the separate ADU waiver instead.
Do the suburbs offer a waiver?
Not one we could confirm as open. Milwaukie's earlier ADU waiver pilot is fully allocated and closed to new applications. Beaverton, Lake Oswego and Gresham set their own fees; we price them for each address.
Should I take the waiver?
It depends on how you plan to use the property. If the ADU will house family or a long-term tenant, the waiver usually saves money with no downside. If you might want to rent the ADU, or a room in your house, by the night within 10 years, the covenant rules that out, and breaking it costs 150% of current SDCs. Decide before you apply.
Related
Sources, as of October 2026: City of Portland, ADU SDC waiver page; City of Portland, temporary SDC exemptions for new housing units page; Block Renovation, detached ADU cost guide (June 2026); City of Milwaukie ADU Waiver Pilot Program page.
Updated October 2026