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City will do away with parks, transportation fees for next four years on those building ADUs of 1,000 sq. ft. or less.

COURTESY PHOTO: CITY OF TIGARD - The Tigard City Council has approved doing away with parks and transportation system development charges for anyone building an accessory dwelling unit under 1,000 square feet for the next four years. The city of Tigard just made the cost of adding an accessory dwelling unit to a home cheaper by exempting them from some of the usual charges.

On Tuesday the Tigard City Council approved waiving system development charges — specifically charges for infrastructure costs on parks and transportation — for those constructing such units, which are designed to provide a more varied "missing middle" type of housing in the city.

System development charges are funds added by a city to the cost of building homes or other buildings to help pay for such services as sidewalks, water and sewer.

Accessory dwelling units — sometimes called ADUs or "granny flats" — can include rooms over garages or separate, small houses added to properties. They essentially create two homes on property that formerly had only one, and they can add to a community's "missing middle" housing for middle-income residents — neither low-income, subsidized housing, nor the much more expensive single-family houses that make up so much of Washington County's housing stock.

Schuyler Warren, an associate city planner for Tigard, told the council that unlike many other homes, ADUs are typically built by homeowners with budgets of $100,000 to $150,000 to construct the dwellings.

The exemptions would be $6,678 in system development charges for parks and $3,909 for transportation, for most homeowners considering such an addition.

"This provides them with an incentive to move forward," Warren said.

Still, for people who build such additional homes, there would be an increase of $200 to $300 in annual property taxes and the Washington County transportation tax would still be applied.

The caveat for anyone planning to build an ADU is that the dwellings must be 1,000 square feet or smaller. Also, short-term rentals, such as those used as Airbnb sites, would not be allowed.

City planners initially suggested a three-year sunset clause be put in place, to access the revenue loss to the city. But the council agreed to extend that length to four years.

Councilor John Goodhouse initially suggested some type of extension to make sure homeowners know the exemptions to some charges were in place.

Senate Bill 1051, which was passed by the Oregon Legislature in 2017, makes it easier to build such units. Before that, Tigard didn't have many requests for them, in part because of previous restrictions; for instance, additional units had to be attached to a home and not separate. That no longer is the case.

Cities that already have exemptions include Portland, Hillsboro, Lake Oswego, Sherwood, Tualatin and Wilsonville, Warren said.

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