What’s The Deal with ADUs?

small blue building as an adu or shed

Defining ADUs in the City of Bend

A'Leah Knight

By A’LEAH KNIGHT, RE/MAX Key Properties Broker
First published in the Source Weekly

ADUs, or accessory dwelling units, are a hot topic in Bend real estate. And for good reason. As of Jan. 2022, 702 ADU permits have been approved in the City of Bend since 2001. 516 of those permits have been approved in just the past five years. With increased interest in ADUs as a viable income generator and added value, we hear from more and more homeowners curious about the process.

“Does my property qualify?”
“How difficult is it to get a permit?”
“What do I need to do first?”
“What are the legal liabilities for an ADU?”
“Is the payoff worth the effort and investment?”

First, let’s define an ADU. Sometimes called an accessory dwelling unit or additional dwelling unit, an ADU is defined by the City of Bend as a permitted “ancillary or secondary living unit that has a separate kitchen, bathroom, and sleeping area existing within the same structure, or on the same lot, as the primary dwelling unit. The accessory dwelling unit may be a separate and detached unit, an attached unit to the principal structure, a repurposed existing space within the principal structure, a dwelling unit over a garage, or a similar structural form.”

In more simple terms, an ADU is an addition to the main residence on the property but not all additions qualify. While anything over 200 square-feet is considered an additional outbuilding and requires a permit, not every additional building would be considered an ADU. For example, a ‘she shed’ or a ‘man cave’ is simply another building being used for personal purposes. What sets an ADU apart is that the intent is to have someone live there and qualify under specific parameters as a dwelling.

One of the most common misconceptions I come across is that since ADUs are small, people think they will be inexpensive to build. That’s not the case. City permits are approximately $6,000, sometimes more. And licensed builders estimate that an 800 square-foot ADU can cost anywhere between $125,000 and $250,000 to build. It’s important to keep all of this in mind as you begin your research and potential project.

The upside to the investment is that it will pay off in the long run. Not only does it add significant value to your property, an ADU can be a lucrative income generator.

If you decide to move forward with an ADU build, you’ll want to be sure to plan ahead, and permitting is your first step. Permits from the City are currently taking up to 70 days to acquire. As there are different rules for the City and the County, be sure to check in with both to determine your property’s eligibility and ADU requirements. It is important to know ADUs are legal in the City of Bend, but are not currently legal in Deschutes County.

“With the recent code changes, understanding how to build an accessory dwelling unit (ADU) may not be apparent,” said Jesse Thomas, City of Bend. “Anyone interested in building an ADU but wants guidance should visit the Permit Center on the first floor of City Hall, where a city employee can help answer their questions.”

When thinking about your property’s potential for an ADU, it’s most important to connect with experts who will help you navigate the permit process, as well as connect you with quality builders to help keep your investment on schedule. And check with your real estate broker to make sure the property you’re interested in allows ADUs. Some neighborhoods don’t allow them, some HOAs have restrictions around them. Want to make your ADU a short-term rental or an AirBnB? There are restrictions around there to so ask all the questions before moving forward.