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83rd OREGON LEGISLATIVE ASSEMBLY--2025 Regular Session
Senate Bill 58
Sponsored by Senator HAYDEN (at the request of Clackamas County Commissioner Ben West) (Presession filed.)
SUMMARY
The following summary is not prepared by the sponsors of the measure and is not a part of the body thereof subject
to consideration by the Legislative Assembly. It is an editor’s brief statement of the essential features of the
measure as introduced.The statement includes a measure digest written in compliance with applicable readability
standards.
Digest: This Act makes OHCS award grants to counties for subgrants to home owners to create
auxiliary dwellings for rent.(Flesch Readability Score: 63.8).
Directs the Housing and Community Services Department to establish and administer a pilot
program to award grants to counties. Requires recipient counties to establish a home modification
program that awards grants to homeowners to develop and rent interior auxiliary dwelling units.
Prevents auxiliary dwelling units developed by the grant from triggering recalculation of prop-
erty value for property tax purposes. Applies to assessment years beginning January 1, 2026, and
before January 1, 2032.
Sunsets on January 2, 2034.
Takes effect on the 91st day following adjournment sine die.
A BILL FOR AN ACT
Relating to expanding the supply of affordable housing; and prescribing an effective date.
Be It Enacted by the People of the State of Oregon:
SECTION 1. Sections 2 and 3 of this 2025 Act are added to and made a part of ORS
chapter458.
SECTION 2.(1) As used in this section:
(a) “Auxiliary dwelling unit” means a rental space within a single-family dwelling that
may be occupied by a tenant under a rental agreement separate from the owner’s occupancy.
(b) “Home modification program” means a program implemented by a county that re-
ceives a grant under this section to fund auxiliary dwelling units.
(c) “Owner” means an owner of a single-family dwelling.
(d) “Single-family dwelling” means a residential structure designed for one family and
sharing no common wall with another residence of any type.
(e) “Tenant” means a tenant, as defined in ORS 90.100, of an owner’s auxiliary dwelling
unit, including a unit that shares a bathroom, kitchen or laundry facilities with the owner.
(2) The Housing and Community Services Department shall establish and administer a
pilot grant program to expand affordable housing in this state by awarding grants to counties
to develop a home modification program by which the county provides funds to owners to
develop and rent auxiliary dwelling units.
(3) To be eligible for a grant under this section, a county must:
(a) Submit a completed application in the form and manner prescribed by the depart-
ment;
(b) Agree in writing to establish a home modification program that complies with this
section;and
(c) Meet other criteria established by the department.
(4) The department shall issue grants to 10 or fewer eligible counties. Each grant may
NOTE:Matter in boldfaced type in an amended section is new; matter [italic and bracketed] is existing law to be omitted.
New sections are in boldfaced type.
LC 3024 SB58
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not exceed $1,000,000.
(5) A county’s home modification program must provide grants to eligible owners in an
amount not exceeding $20,000 per single-family dwelling.
(6) To be eligible for a home modification program grant, an owner must submit a com-
pleted application to the county in the form and manner prescribed by the department, in
which the applicant must:
(a) Demonstrate that the single-family dwelling is in a habitable condition;
(b) Demonstrate that the single-family dwelling is not in default on property taxes or on
a loan secured by the real property and that the real property is not subject to an unpaid lien
or judgment lien; and
(c) Describe how the single-family dwelling will be modified to develop an auxiliary
dwelling unit in accordance with this section and applicable building and housing codes.
(7) In consideration of an award of a home modification program grant, the owner must
agree to:
(a) Develop an auxiliary dwelling unit as described in the application;
(b) Rent the developed auxiliary dwelling unit to one or more tenants, other than a family
member, for a minimum of 60 cumulative months;
(c) Charge the tenant rent that is no higher than the market rate as determined by the
county and specified in the grant award offer;
(d) Occupy the single-family dwelling as a primary residence throughout the required
rentalperiods;
(e) Not use the auxiliary dwelling unit as a vacation occupancy, as defined in ORS 90.100,
prior to the end of the rental periods required under this section;
(f) Agree to allow a county to place a lien on the single-family dwelling securing the
agreement and the county’s right of repayment under subsection (8) of this section; and
(g) Meet any other reasonable requirements established by the department or county.
(8) No later than seven years after the receipt of the home modification program grant,
an owner shall reimburse the county a prorated amount of the grant based on the number
of months, out of the required minimum 60 months, during which the auxiliary dwelling unit
was not rented, or the owner did not reside in the single-family dwelling as a primary resi-
dence.
(9) The department shall adopt rules necessary to administer this section, including:
(a) Application standards and procedures to determine the eligibility of a county to re-
ceive a grant and the amount of the grant; and
(b) Application standards and procedures that counties must use to determine the eligi-
bility of an owner to receive a home modification program grant and the amount of funding
if an owner is eligible.
(10) A county may use up to $50,000 of a grant awarded under this section to pay for the
administrative costs of applying for and administering a home modification program.
SECTION 3. (1) The Auxiliary Dwelling Unit Fund is established in the State Treasury,
separate and distinct from the General Fund.
(2) The Auxiliary Dwelling Unit Fund consists of moneys appropriated, allocated, depos-
ited or transferred to the fund by the Legislative Assembly or otherwise.
(3) Moneys in the fund are continuously appropriated to the Housing and Community
Services Department to provide grants to counties under section 1 of this 2025 Act.
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SECTION 4. For the purposes of calculating a single-family dwelling’s maximum assessed
value or real market value under ORS 308.146 (3), an auxiliary dwelling unit that was devel-
oped by an owner who received a home modification program grant under section 2 of this
2025 Act is not “new property or new improvements”, without regard to the cost or value
of the improvement.
SECTION 5.Section 4 of this 2025 Act applies to auxiliary dwelling units developed during
the assessment years beginning on or after January 1, 2026, and before January 1, 2032.
SECTION 6.In addition to and not in lieu of any other appropriation, there is appropri-
ated to the Housing and Community Services Department, for the biennium beginning July
1, 2025, out of the General Fund, the amount of $10,000,000 for deposit in the Auxiliary
Dwelling Unit Fund established under section 3 of this 2025 Act.
SECTION 7.Sections 2 to 4 of this 2025 Act are repealed on January 2, 2034.
SECTION 8.Any unobligated moneys in the Auxiliary Dwelling Unit Fund on January 2,
2034, shall be transferred to the General Fund for general governmental purposes.
SECTION 9.This 2025 Act takes effect on the 91st day after the date on which the 2025
regular session of the Eighty-third Legislative Assembly adjourns sine die.
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