ADU vs Home Addition Portland
What’s the Difference Between an ADU and a Home Addition?
While both an accessory dwelling unit (ADU) and a home addition expand your living space, they serve different purposes.
An ADU is a separate living unit on your property. It can be detached (like a backyard cottage), attached to your main home (such as a garage conversion), or a basement apartment with its own entrance. ADUs include independent utilities, kitchens, and bathrooms; essentially, they are small houses.
A home addition expands the footprint of your primary residence. This could mean adding a new bedroom, expanding your kitchen, or even building an entire second story. Additions increase square footage in your existing home but remain part of it.
In Portland, the decision often comes down to how you want to use the space: multigenerational living, rental income, or simply a larger home for yourself.
When it Makes the Most Sense to Build an ADU
ADUs are especially valuable in Portland thanks to zoning flexibility and high housing demand. Choose an ADU if you want:
Rental Income Potential: ADUs can legally be rented out long-term, creating passive income.
Multigenerational Living: Great for aging parents, adult children, or guests who want privacy.
Future Flexibility: ADUs can later be used as home offices, studios, or guest houses.
Property Value Boost: Homes with ADUs often appraise higher, especially in dense Portland neighborhoods.
ADUs are most practical if your lot has space, you’re willing to take on permitting for a new dwelling, and you want the option of a legally rentable unit.
When a Home Addition is the Better Choice
A home addition is the right move when you want your existing home to grow with you:
More Living Space: Expanding a kitchen, adding bedrooms, or creating a new primary suite.
Second Story Additions: Popular in Portland, where lots are smaller but vertical expansion is allowed.
Lifestyle Upgrades: Sunrooms, family rooms, and larger kitchens that make the main house more functional.
Neighborhood Fit: If you want to maintain a single dwelling appearance, an addition blends seamlessly.
Additions shine when you want your home to feel larger and more livable without maintaining a second unit.
Cost Comparison: ADU vs Portland Home Additions
Costs vary widely, but here’s a realistic Portland breakdown:
ADU Costs:
Basement or Garage Conversion: $100,000 – $180,000+
Detached New Build: $180,000 – $300,000+
Home Addition Costs:
Room/Bump-Out: $75,000 – $150,000+
Second Story Addition: $200,000 – $400,000+
On a per-square-foot basis, ADUs often cost more because they require a full kitchen, bathroom, and separate systems. Additions cost less per square foot, but can escalate quickly if structural changes or high-end finishes are involved.
ROI and Long-Term Benefits of Each Option
ADU ROI:
Potential rental income (long-term or short-term rentals where allowed).
Increases property resale value by offering dual living.
High demand in Portland for homes with ADUs.
Home Addition ROI:
Expands livable square footage, which appraisers value highly.
Improves day-to-day function (bigger kitchens, family rooms).
Makes your home more competitive if you sell in suburban markets.
If your primary goal is income generation, ADUs win. If it’s personal comfort and resale square footage, additions take the lead.
Permit and Zoning Considerations in Portland
ADUs: Portland generally allows ADUs citywide, but you must follow specific rules on size, height, parking, and design. Permits are required for plumbing, electrical, and structural work. Expect multiple inspections.
Home Additions: Permits are required for any structural, plumbing, or electrical changes. Zoning laws determine setbacks, lot coverage, and height limits.
Amplified Renovations handles permitting for both, ensuring projects stay compliant with Portland’s Bureau of Development Services.
How to Decide Which Option is Right for Your Home
Ask yourself these key questions:
Do I want rental income, or just more space for my family?
Does my lot allow for a detached or attached ADU?
How much disruption am I comfortable with (building a second story vs converting a garage)?
What’s my long-term plan: staying in the home, selling soon, or passing it down?
At Amplified Renovations, we help homeowners weigh these factors with detailed design and cost estimates for both scenarios.
Frequently Asked Questions
-
Generally, a home addition is cheaper per square foot since it doesn’t require a separate kitchen, bath, or utilities. ADUs cost more because they’re essentially a small independent home.
-
Costs range from $100,000 for a conversion (basement/garage) to $300,000+ for a new detached ADU, depending on size, finishes, and site conditions. Learn more about the costs of a garage conversion compared to a new build ADU.
-
In many cases, building an ADU is more cost-effective than buying a new property in Portland’s competitive housing market, especially if you want rental income or multigenerational housing.
-
Prefab ADUs can reduce construction time and sometimes lower upfront costs, but may face delivery/installation challenges and limited customization. A site-built ADU offers more design flexibility and better long-term integration with your property.
-
An 800-square-foot ADU in Portland typically costs $200,000–$360,000, or $200–$450 per square foot, depending on the finishes, complexity, and site preparation.
-
Prefab ADUs may face transportation limitations, restricted layouts, and challenges with integrating utilities. They often don’t blend as seamlessly with your existing home as a custom build.
Next Steps: Get a Custom Quote for Your Project
Both ADUs and home additions are smart ways to invest in your Portland property, but the right choice depends on your goals and lifestyle.
If you’re a growing family in need of an extra bedroom or more functional living space, a custom home addition may be the best fit. If you want to create flexibility for adult children, guests, or even a rental, an ADU can add long-term value. Either way, the right project helps you make informed decisions about how to expand your home and increase its comfort and usability.
Contact Amplified Renovations today for a free consultation and side-by-side estimate of an ADU vs a home addition on your lot. We’ll help you design a solution tailored to your needs, whether that’s more room for a family room, a separate living space, or simply expanding your current layout into a customized home that truly works for you.
