Accessory dwelling units, sometimes called “mother-in-law suites” or “granny flats”, are growing in popularity. When you construct an ADU, you create a separate living area on your property that can be used to generate rental income or to let your mother-in-law (or other family members) live or stay in when visiting.
Before you begin constructing an ADU in Oregon, though, you need to consider a couple of things, including whether it will be legally permissible on your property, what preliminary steps must be taken to receive approval to construct an ADU, and what post-construction implications may arise (such as more taxes).
Before you make that first run to the hardware store and start pouring the foundation for your new ADU, make sure that the proposed ADU is legal. In Oregon, property is classified by zones. Commonly, zones are thought of as either residential, commercial, or industrial. However, Oregon communities typically have more specific zones, such as “Residential – Urban High Density” or “Residential – Urban Low Density.”
Within each zone, different uses are allowed. For instance, in a high density residential zone, ADUs may be “outright” permitted. On the other hand, in residential low density zones, ADUs may be allowed only as a “conditional use,” or may be even be prohibited. An “outright” use is one that is expressly permitted in the zoning ordinance. “Conditional uses,” on the other hand, are subject to various conditions if approved. Conditional uses tend to be more difficult to obtain and often require the applicant to agree to comply with a number of conditions (such as increased setbacks or additional on-site parking).
Every city and county in Oregon will have a zoning ordinance or development code. It is important to review this document to confirm that an ADU is a permitted use on your property. Most zoning ordinances are available online (but always confirm that the online version is up to date).
Once you confirm that an ADU is permitted in your zone, it is a good idea to make sure you can comply with all other requirements before beginning construction. For example, the zoning ordinance may have setback requirements that require the ADU be built a certain distance from your property lines. If you do not have room on your property to comply with the setback requirements, you may be barred from constructing the ADU (although occasionally an exception may be made).
Other requirements may relate to lot coverage (the percentage of your lot that can be built on), building height, and the size of the ADU.
It is also a good idea to visit the local planning department to confirm what you have learned and ask questions. Most counties and cities will have a planning department, and if not, they will have someone who takes on the responsibility of a city or county planner. Staff at the planning department can advise you on such things as what uses are permitted, what the application process will entail, and what the application fee will be.
Be careful though; local governments will not be liable if city of county staff advises you incorrectly. For this reason, among others, having a land use attorney review your development plans before incurring significant development costs is a good idea.
You will be required to take a number of steps before receiving final approval of your ADU. At a minimum, expect to have to:
Once you have completed all preliminary steps, the local planning department will review the application. In some cases, the planning department itself may be able to approve the ADU. This is called an “administrative decision.”
If the planning department receives objections, staff may decide to refer the matter to the planning commission, city council, or county board for review. Or, the local code may require that your ADU application be referred to one of those bodies for review in the first case.
If staff is not able to make an administrative decision, you will need to attend a public hearing. At the hearing, the public body reviewing the application will hear testimony for and against your application before making a decision to approve or deny the request.
Whether you are building an ADU by converting an old garage, building a new structure, or cordoning off a portion of your existing house, you will need to make sure it meets the applicable design standards. Depending on where in Oregon you live, those standards will likely determine:
In addition to the zoning ordinance, whether your ADU will be a remodel, reconfiguration, or new construction, the Oregon State Building Code will apply. The State Building Code is designed to make sure new buildings, renovations, and remodels meet minimum construction standards. It covers such things as the mechanical, electrical, and plumbing components of a building.
Your local building department can help you identify the building requirements and what building permits are necessary. If you retain a licensed contractor to help with the construction, the contractor should be able to help with navigating the potentially complicated building code.
As you plan your ADU, do not forget about the long-term tax impact. Under Oregon tax law, it is likely that the construction of your ADU will lead to an increase in property taxes. To determine the potential tax impact, contact your local county assessor's office. And if you plan on renting the space, remember that rental income is taxable, too.
While building an ADU for family or to generate additional income may sound easy, it is important to fully understand the process and long-term financial impact. Discussing these matters with a land use and tax professional may avoid headaches down the road. If you fail to inquire about all of the requirements that apply to the construction of an ADU, you risk fines, planning and building code enforcement actions, and possibly the loss of the ADU.