Bend is making a significant update to its accessory dwelling unit regulations, and the change could reshape how homeowners think about their property. Proposed code amendments would allow two ADUs per residential property, doubling the current limit of one. The first ADU could be up to 800 square feet, while the second would be limited to 500 square feet. Combined with allowances for rowhouses and a second kitchen in the primary home, these changes represent the most expansive ADU policy Bend has adopted.

What Is Changing

The proposed code amendments include several key provisions:

Two ADUs per property instead of the current one
First ADU up to 800 square feet (consistent with current maximum)
Second ADU up to 500 square feet (new allowance)
Minimum 6-foot separation for detached ADUs from other structures
Second kitchen allowed in the primary residence
Rowhouses also permitted as part of the broader code update

The second kitchen provision is a detail that gets overlooked but matters a great deal. Currently, having a second kitchen in your home can trigger reclassification as a duplex, with different building code requirements. Explicitly allowing a second kitchen lets homeowners create semi-independent living spaces within their home without a formal ADU conversion.

Why This Matters for Homeowners

These changes are relevant to a wide range of homeowners, not just those looking to become landlords.

Intergenerational living. The most compelling use case for many families is housing aging parents or adult children. A 500-square-foot second ADU provides enough space for independent living while keeping family members close. With Central Oregon's high housing costs, adult children who work locally often struggle to find affordable housing. An ADU on a parent's property is a practical solution that doesn't require the child to leave the area.

Workforce housing. Bend's economy depends on workers in hospitality, healthcare, retail, and other service industries who can't afford market-rate housing. ADUs provide a pathway for property owners to offer below-market rentals while still generating income. A 500-square-foot studio is a viable housing option for a single person or couple working in Bend.

Retirement income. For older homeowners on fixed incomes, rental income from one or two ADUs can make the difference between comfortably staying in their home and being forced to sell. Property taxes and insurance costs continue to rise; ADU income can offset those increases.

Property value. A property with one or two permitted ADUs is worth more than the same property without them, all else being equal. The additional income stream or flexible space adds value that buyers recognize.

The Economics of Building an ADU

Before rushing to add ADUs, homeowners need to understand the costs. Building an ADU in Bend currently runs between $150,000 and $350,000 depending on size, complexity, site conditions, and finishes. A basic 500-square-foot detached unit with a simple foundation, standard finishes, and modest systems is at the lower end. An 800-square-foot unit with a full kitchen, laundry, bathroom, and higher-end finishes is at the upper end.

System Development Charges add $15,000 to $25,000 per ADU. Permitting, design, and engineering add another $10,000 to $20,000. Site preparation, especially if utilities need to be extended, can add more.

The rental income math depends on the market. An ADU in a desirable Bend location might rent for $1,200 to $2,000 per month depending on size and condition. At the midpoint, that's roughly $18,000 per year in gross income. Against a construction cost of $250,000, that's a simple payback period of about 14 years before accounting for financing, taxes, maintenance, and vacancy. The math works for some homeowners and doesn't work for others. Run your specific numbers before committing.

What About Parking

Parking is the most common concern neighbors raise about ADU development. The updated code addresses this with reduced parking requirements for ADUs, recognizing that many ADU residents rely on a single vehicle or none. This is consistent with the approach Bend has taken for middle housing under HB 2001.

In practice, on-street parking in residential neighborhoods accommodates most of the additional demand. Properties near transit, bike corridors, or commercial areas see even less parking pressure from ADU occupants.

Rowhouses as Part of the Update

The code changes also introduce provisions for rowhouses. These are attached single-family units, typically two to six units sharing party walls, each with its own entrance and vertical living space. Rowhouses offer a middle ground between single-family homes and apartments, and they're particularly well-suited to smaller lots or infill locations.

For the Bend housing market, rowhouses add another option in the gap between apartments and detached single-family homes. They typically offer homeownership at a lower price point than a detached home, with the privacy and individual entrance that apartment living doesn't provide.

How to Think About These Changes

Bend's ADU expansion is part of a broader strategy to increase housing supply within the existing Urban Growth Boundary. Rather than sprawling outward, the city is making it easier to add density incrementally, property by property, in ways that are compatible with existing neighborhood character.

The key word is "incrementally." Not every homeowner will build an ADU. Not every lot is suitable for two ADUs. The change creates permission and opportunity, not obligation. Over time, the cumulative effect of hundreds of individual ADU decisions adds meaningful housing supply without the disruption of large-scale development.

Financing an ADU

The financing landscape for ADUs has improved significantly in recent years. Several options are available to Bend homeowners:

Home equity loans or HELOCs remain the most common financing method, leveraging existing equity in the primary home
Construction loans that convert to permanent financing, though these require more documentation and approval time
Fannie Mae's HomeStyle Renovation loan and similar products that allow ADU construction as part of a renovation financing package
Oregon-specific programs that support ADU development as part of the state's housing affordability strategy

The key financial consideration is that a permitted ADU adds appraised value to your property, which means the investment builds equity as well as generating rental income. Work with a lender familiar with ADU financing in Oregon to understand your specific options and requirements.

If you're considering an ADU project, start by talking to a builder experienced with Bend's permitting process and a financial advisor who can help you run the numbers. Our team can also help you evaluate how an ADU might affect your property's market value. For ongoing updates on housing policy in Central Oregon, visit our housing market section.