Case Studies on Smart Zoning Reforms, Part Two: Portland, Oregon’s Accessory Dwelling Units

This article is part of a series of case studies of positive local housing policy reforms in the United States. Each looks at a reform or set of reforms implemented at the municipal level. We have only included reforms that appear to have successfully improved housing affordability, to serve as examples for policymakers looking to do the same in their jurisdictions.

Part one: Houston, Texas

Part two: Portland, Oregon

Part three: Tysons Corner, Virginia

Part four: Buffalo, New York

The story: Reforms to Portland’s rules around constructing accessory dwelling units, or ADUs, resulted in a 600% increase in the construction of accessory apartments, secondary suites, “granny flats” and other forms of housing which can be added to an existing home property. This has helped provide much-needed housing stock for lower-income residents in the area.

Why it matters: The deregulation of ADU construction in Portland demonstrates how effective simple reforms can be at increasing housing supply and affordability for homeowners and tenants alike. As citizens and policymakers across the United States look for solutions to the housing affordability crisis, Portland’s ADU experience provides an informative model for other local-level reforms.

Details:

• In 1996, Portland began allowing small, secondary homes to be added to residential lots anywhere in the city, but the maximum allowable size of an ADU was limited to just 33% of the living area of the primary unit on the site.
• Owner-occupancy requirements limited who could build ADUs and created difficulties for homeowners seeking financing to build ADUs. Size limitations and costly permitting made ADU construction nearly nonexistent, with an average of 30 permits granted per year between 2000 and 2009.
• In the late 1990s, Portland policymakers removed the burdensome owner-occupancy requirement, but under the remaining fee requirements for ADUs, fewer than 50 were permitted in any year prior to 2010. 
• In 2010, the city increased the allowable ADU size from 33% to 75% of the living area of the primary unit and waived the prohibitively costly fees for ADU construction that had previously been in place.
• The 2010 reforms were followed by a steep increase in ADU construction, with hundreds permitted annually in the following years. On a per-capita basis, ADU permitting in Portland has exceeded other ADU success stories, such as those in Los Angeles and Seattle.
• In 2020, Portland passed further reform, allowing for two ADUs to be built on a lot regardless of configuration. The new reforms also eliminated the requirement for off-street parking, and increased the maximum square footage for a converted basement ADU from 800 to 1,000. 

The big picture: Across the United States, land-use restrictions prevent ADUs, an effective and relatively low-impact way to add housing to existing residential areas, from being built. This helps keep the cost of housing high and makes moving to locations with more economic opportunity more difficult. Portland policymakers have shown that liberalizing these regulations is both possible and productive in progressive cities.

To learn how policymakers can improve housing affordability in your area, check out our Guide for Local Policymakers.