Portland’s Backyard Cottages Will Get a Permanent Exemption From Development Fees—With One Restriction

Portland City Commissioner Chloe Eudaly proposes: no more development fee waivers for Airbnbs in backyard cottages and other accessory-dwelling units; pay the fee or create permanent housing.

Snow day in a Southeast Portland neighborhood, Feb. 21, 2018. (Sam Gehrke)
By Rachel Monahan

Since 2010, Portland officials have pushed for the building of more backyard cottages (and other accessory dwelling units) by exempting them from development fees charged by the city.

But that exemption has always been temporary, if regularly renewed.

City Commissioner Chloe Eudaly, who has been working toward more ADUs throughout the city, is looking to make the exemption permanent—with a catch.

Any homeowner who gets the exemption, worth by one estimate up to $12,000 a unit, won't be able to cash in on renting the cottages on Airbnb or other short-term rental site—at least for a specified period of time after getting the fee break.

Homeowners who want Airbnb in their backyard cottages can still pay the system-development charges.

Her office has not settled on how long the restriction against using them for short-term rentals would last, in the draft policy shared with WW.

But the idea is to push to create more permanent housing in the city.

"There's no public benefit to another Airbnb," says Marshall Runkell, Eudaly's chief of staff. "There is clearly a public benefit to another long-term residence."

Eudaly has also proposed that the city put money toward new financing mechanisms to further stimulate development of ADUs.

Link: Portland City Commissioner Chloe Eudaly Seeks to Spark Increase in Backyard Cottages and Other ADUs

The policy has the support of a key advocate for ADUs.

“There will be some degree of ADU production loss as a result of this policy, but on the balance, I think the City Council is making a the right call,” says Kol Peterson, an ADU consultant and author of Backdoor Revolution-The Definitive Guide to ADU Development.
“I’ve have spoken with hundreds of Portlanders about this proposal already at various points, and am certain that a permanent SDC waiver for ADUs is very popular.”

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