Bill allowing second homes in rural areas advances (copy)

This 2016 file photo shows a newly constructed accessory dwelling unit over a garage behind a home in Bend.

Longtime small-housing advocate Kol Peterson studied data from the city of Portland and found permits for accessory dwelling units decreased in 2019.

He thinks the decline stems from a flurry of interested homeowners applying for a permit, before the rules changed in 2018, to benefit from fee-waiver incentives with no restrictions on short-term rentals.

Some of the permits were used to build in 2019, creating “an artificial acceleration of ADU activity resulting in a ‘boom’ of ADU permits,” Peterson explains on, an online resource that posts case studies and updates on ADUs, which is still a rare form of housing.

Seven ADU permits were issued by the city in 1995 followed by small increases until 2011 when the city approved 93 permits. That number more than doubled to 206 by 2014 then quadrupled to 376 in 2015.

By 2016, there were almost six times as many permits issued – 545 – before the total fell to 511 in 2017 and 488 in 2018.

Last year, issued permits dropped to 315.

While the number of permits for self-contained, smaller second homes is down, interest remains high. So far, about 2,487 legal ADUs have been built in Portland, with another 652 under inspection.

A Portland Homeowner Report released recently by found that 84 percent of Portland homeowners who participated in the survey believe accessory dwelling units make homes more appealing to potential buyers.

In Portland, the most popular ADUs are living spaces for elderly relatives, adult children and family friends, and as income-producing apartments to rent, 36% each, respectively, according to the survey.

More developers are including a flexible living space with a separate entrance – a home within a home – that grants privacy to a member of a multigenerational family or tenant who helps pay the mortgage.

The “gen suite” was first popularized by the Lennar Corp., which introduced its NextGen floor plan in 2011 after the recession and foreclosure crisis, when extended families moved back in together to save on housing costs.

The Regional Multiple Listing Service added a new search field that allows real estate agents, appraisers, buyers and sellers to quickly find Oregon residential properties with a second, separate dwelling.

Architects and designers are increasingly being hired to plan space- and energy-efficient guest homes and manufacturers are building prefabricated micro units to sit on foundations in backyards.

Homeowners add an apartment wing to an existing house, carve out space from underused rooms inside the residence or convert an unfinished basement or structurally sound garage into new living quarters.

Or they can erect a second story to the garage or standalone, stick-framed structure on the property.

These are not the DIY basement conversions of 20 years ago, but highly specialized projects, says Matt Williams, founder and CEO of, which has a team of construction experts who work with architects, designers and engineers to build custom ADUs.

He says his clients are motivated to leverage their land to increase its value, use and enjoyment.

Population growth and thicker density also create a need and desire for separate living spaces, and accessory dwelling units are one solution, Williams says, especially for people with a low mortgage or who like their location but need more space or want to rent out an apartment for added income.

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