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Example of tiny home cottage, common in Bend

ADUs in Bend, Oregon – The New Big Deal in Bend Real Estate

Looking to move to Bend or buy real estate in Bend? If you’re like most current or potential Bend homeowners, there are several items particular to the area that you may be looking to check off on your list.

Mountain views are a frequent one. Pick your adjectives: the Oregon Cascades are beautiful, awe-inspiring, majestic, noble, captivating. And if you land the right piece of property, they will be visible from your backyard.

Then there’s walkability. If you have even a modicum of interest in fine dining, great entertainment, unique breweries, and beautiful parks, then having all of it within walking distance is a huge plus.  There’s also the Deschutes River, with its twelve miles of paved walking and bike paths.

In addition, there’s yet another item that’s become increasingly hard to ignore over the past several years. That – as you may have guessed from the title – is Accessory Dwelling Units, or ADUs for short. ADUs are increasingly becoming a fixture of the Bend, Oregon real estate landscape, and there’s a few good reasons why.

So, what’s an Accessory Dwelling Unit?

The term, often abbreviated as ADU, is pretty clunky, but people also call them “granny flats.” In the case of a detached unit, they’re called “backyard cottages” or sometimes tiny homes.

We should note that strictly speaking, a tiny home wouldn’t measure more than 400 sq. feet. Detached ADUs can be up to twice that size, 800 sq ft.

Two years ago, the City of Bend loosened regulations for ADUs and lowered application fees, while providing new incentives. Most significantly, the city removed the requirement for a conditional use permit and the resultant neighborhood meeting and approval process. This resulted in a flood of new applications, with close to 200 filed in 2017.

(Eugene, by contrast, is crawling at a turtle’s pace toward facilitating Accessory Dwelling Units. Read more about the state of ADUs in Eugene here.)

It’s no news that Bend has a tight housing market, particularly in the city center east and west of the Deschutes River. This is the area most popular with young professionals and college students. City planners hoped ADUs would increase the supply of rental housing, thereby opening up the market.

Homeowners can now build ADUs measuring up to 600 square feet on lots less than 6,000 square feet, or up to 800 square feet on larger lots. Permits cost $800 (a significant decrease), while impact fees total a bit more than $4,000. Homeowners still need to meet setback requirements and provide an additional parking space unless special permission is granted.

So, Why Should I Build an ADU on my Property?

If you’re a homeowner, having an ADU on your property can mean one of several things. You can go the literal granny flat route, using the space to house and care for loved ones. If you regularly host guests, ADUs can provide a great space for that.

You can also rent the space. More and more Bend homeowners are turning to ADUs as a lucrative income stream. Compared to apartments, detached ADUs command especially premium rates.

Nice ADUs in desirable Westside neighborhoods can fetch homeowners a particularly impressive sum. So, who’s renting them?

While we don’t have any statistics, it’s safe to say that ADUs appeal especially to millennials, who are feeling Bend’s housing squeeze more than most. This is especially true in the areas of town that appeal the most to a younger demographic. ADUs cost much less to rent than a traditional home but provide a quite comparable lifestyle for people who don’t need as much space.

Even ADUs on less premium real estate can easily provide homeowners with a worthwhile return on their investment. ADUs also help ease the rental market squeeze we’re currently experiencing here in Bend, which means that both homeowners and their community win out. What’s not to love?

One thing to keep in mind, though, is that the increase in property value coming from ADUs doesn’t quite measure up to the typical costs of building one. That’s good news for buyers and not-so-good news for sellers.

In other words, it won’t make sense to build an ADU if you’re looking to sell in the near future. However, if you’re in the market for a Bend home, having an ADU just makes economic sense if you’re willing to rent it out and can afford the up-front increase in price.

Bend Homes for Sale with attached ADUs

2 thoughts on “ADUs in Bend, Oregon – The New Big Deal in Bend Real Estate”

  1. Rebecca A Meade

    Can you build an ADU on Awbrey Butte and specifically are they allowed in the North Rim subdivision on the butte. The HOA website has been taken down so not able to see if there are any restrictions. Thank you.

    1. Hi Rebecca,

      Thanks for stopping by. We sold a lot on North Rim not too long ago. The short answer is “yes, you can,” as long as they’re architecturally consistent with the main residence and approved by the City of Bend.

      Are you considering purchasing something on North Rim? We’re happy to help with any questions that you might have!

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