The ADU Advantage in Central Oregon: Why More Homeowners Are Building Smart in 2025

Greg Powell
Nov 5
4 min read

As Central Oregon’s population keeps growing and housing affordability remains a challenge, Accessory Dwelling Units (ADUs) have emerged as one of the smartest ways for homeowners to add value, flexibility, and financial security.

Whether it’s a backyard cottage in Bend, a converted garage in Redmond, or a small rental unit in Sisters, ADUs are transforming how Central Oregonians think about homeownership. In 2025, new state and local laws are making it even easier to build these secondary dwellings — creating opportunities for both personal use and investment.

What Is an ADU?

An Accessory Dwelling Unit (ADU) is a self-contained living space built on the same lot as a primary home. It includes its own entrance, kitchen, bathroom, and sleeping area. ADUs come in several forms:

Detached ADU: A separate structure in your backyard.
Attached ADU: Built onto your main home.
Garage Conversion: Transforms an existing garage into living space.
Basement or Interior ADU: A private unit within the home, often with a separate entry.

Unlike guest houses or home additions, ADUs function as independent living spaces, making them ideal for rental income, multi-generational living, or private workspaces.

The New 2025 ADU Rules: Easier Than Ever in Bend and Deschutes County

Over the past few years, Bend and Deschutes County have embraced ADUs as part of their strategy to address housing shortages and promote sustainable growth.

Here are a few key updates for 2025:

No owner-occupancy requirement: You don’t have to live on-site to rent out your ADU.
Reduced lot-size restrictions: More properties now qualify for ADU construction.
Streamlined permits: Faster approval times through simplified planning reviews.
Flexible design standards: More architectural freedom to match your property’s character.

These updates, in line with Oregon’s statewide housing goals, empower homeowners to create affordable, eco-friendly housing solutions while building long-term equity.

Why ADUs Are the Smart Move for 2025

The benefits of building an ADU in Central Oregon go far beyond extra space. Here’s why they’re gaining so much traction this year:

1. A Strong Source of Rental Income

Bend and Redmond’s rental markets remain tight. A well-built ADU can bring in consistent monthly income, helping offset your mortgage or fund retirement.

2. Multi-Generational Living Made Easy

As housing costs rise, families are choosing to stay closer together. ADUs provide independent yet connected living for aging parents, adult children, or visiting relatives — all without sacrificing privacy.

3. Boosting Property Value

Homes with ADUs often sell for significantly more than comparable properties without them. Buyers see them as built-in income generators or flexible living options.

4. Future-Proofing Your Property

Whether you plan to rent now and downsize later, or use your ADU as a home office or caregiver suite, it adds long-term versatility in a changing housing market.

The Central Oregon ADU Advantage: Local Lifestyle Meets Smart Investment

Central Oregon is uniquely suited for ADU growth. The region’s mix of urban amenities and natural beauty makes small-space living appealing to renters and owners alike.

In Bend, ADUs blend modern design with outdoor-focused lifestyles, often used as income-generating Airbnb units (where zoning allows).
In Redmond, larger lots and lower costs make ADUs ideal for family housing or long-term tenants.
In Sisters and La Pine, rural ADUs help homeowners house relatives or build secondary income streams while maintaining space and privacy.

Each city in Deschutes County has its own zoning nuances — but all are trending toward greater flexibility and fewer barriers for homeowners who want to build.

Common ADU Misconceptions

Despite their popularity, there are still a few myths about ADUs that hold homeowners back:

Myth #1: ADUs are only for large lots.→ Not true. Many Bend and Redmond neighborhoods allow ADUs on standard-sized residential lots.

Myth #2: They’re too expensive to build.→ ADUs can cost anywhere from $175,000 to $300,000, but that investment often pays for itself in 8–12 years through rental income and property appreciation.

Myth #3: Permits are too complicated.→ 2025 rule changes have made the process faster and simpler than ever, with most approvals taking 30–60 days.

How to Get Started

Check Your Zoning: Confirm whether your property qualifies under Bend or Deschutes County’s current ADU standards.
Design Smart: Work with a designer who understands small-space efficiency and sustainability.
Get Pre-Approved: Explore financing options, including home equity loans or renovation loans tailored for ADU construction.
Hire Local Experts: Builders and realtors familiar with ADU laws can save you time, stress, and money.

In a housing market where flexibility, affordability, and sustainability matter more than ever, ADUs represent the future of homeownership in Central Oregon.

Whether you’re looking to support family, supplement your income, or simply make the most of your land, an ADU can turn your property into a long-term asset.

If you’re considering building one this year, now is the perfect time to explore your options — before the next wave of growth drives demand (and prices) even higher.

FAQs

Q: Can I use my ADU as a short-term rental in Bend?

Some zones allow short-term rentals with additional permits, but most ADUs are limited to long-term rentals to support local housing goals.

Q: How long does it take to build an ADU in Central Oregon?

Most projects take 6–9 months, including permitting and construction.

Q: Do I need extra parking for an ADU?

In many neighborhoods, parking requirements have been relaxed — especially near public transit or walkable areas.

Q: Will adding an ADU increase my property taxes?

Yes, but the increase is usually offset by the additional rental income and overall property value boost.

Q: What’s the best type of ADU for investment?

Detached ADUs often yield the highest rental income, while attached units or garage conversions may be more cost-effective to build.