Arizona’s ADU law made headlines in 2024. Oregon quietly settled the same question back in 2017, and Portland has permitted thousands of units since. So if the right to build is old news here, what is left to figure out?
The money. And one trade-off most homeowners have never heard of until it is in front of them.
The part Oregon settled
State law (ORS 197A.425) requires nearly every city to allow at least one ADU wherever a detached single family house is allowed. It also bans the two conditions that used to kill these projects: a city cannot require you to live on the property, and it cannot require extra parking.
That is the guarantee. Notice what it does not include: size, height, how many units, or what the city charges you. All of that stayed local. Which is why the same project can look very different across a city line.
The fee nobody budgets for
Before a city issues your permit, it charges system development charges, or SDCs. Think of them as a buy-in for the infrastructure your new unit will use: roads, parks, sewer, stormwater, water. They are legal under state law (ORS 223.299), they are charged per dwelling, and on an ADU they can run into five figures.
This is the number that catches people. The construction budget is planned. The SDC bill arrives with the permit.
And here is where your city matters enormously.
The 10 year trade-off
Portland will waive all SDCs on a qualifying ADU (City Code 17.14.070(F)). Lake Oswego will too (LOC 39.06.105(5)). On a project where those charges run five figures, that is real money.
The catch: you sign a recorded covenant against short term rental use, and it runs for 10 years. Portland’s version covers not just the ADU but every structure on the property. Lake Oswego’s blocks rentals under 31 consecutive days.
So the waiver is really a choice: take the savings now and give up the Airbnb option for a decade, or keep your options open and pay the full charge. Neither answer is wrong. But you want to make that choice on purpose, not discover it at the permit counter.
The same project, four different bills
- Portland: all SDCs waivable, 10 year covenant, property-wide
- Lake Oswego: all SDCs waivable, 10 year covenant against stays under 31 days
- Tigard: partial. Transportation and parks charges can be waived on units up to 1,000 square feet (TMC 3.24.100.F), but water, sewer, and stormwater charges remain. Same 10 year covenant. And the exemption is currently scheduled to sunset in July 2027, so the window is not permanent.
- Oregon City: no waiver. The city publishes an ADU fee schedule, and the 2026 version starts around $18,000 in base charges before parks and water are added.
Same state. Same guaranteed right. Four very different checks.
Beaverton, Hillsboro, West Linn, and Happy Valley each land somewhere on this spectrum too, and their current numbers change often enough that we keep them on our city pages rather than in an article.
Size is local too
The guarantee is one unit. How big is up to the city, and the range is wide: Hillsboro runs 250 to 750 square feet, Portland and most of the metro land at 800, West Linn allows up to 1,000. Happy Valley caps a detached unit at half the size of your house or 1,000 square feet, whichever is less. If your project is size-sensitive, the city line matters before the design does.
One more thing worth watching
Oregon is not finished. A 2025 law (HB 2138) directs the state to define, by 2028, when local siting and design requirements create unreasonable cost or delay, and to work on model SDCs. Translation: the state thinks the remaining friction is exactly the local layer this article describes, and it is coming for it next.
Where to start
Two questions before anything gets drawn. What does your city charge, and what will it waive? And if the waiver requires the covenant: is short term rental part of your plan for the next decade? Our city pages carry the current numbers, with the code section behind each one.
Sources: ORS 197A.425. ORS 223.299. SB 1051 (2017). HB 2138 (2025). Portland City Code 17.14.070. Portland Zoning Code 33.205. LOC 39.06.105. TMC 3.24.100.F. Oregon City 2026 ADU SDC schedule. Hillsboro CDC 12.40.100. West Linn CDC 34.030. Happy Valley MC 16.44.050. Last checked August 2026.