Bill would fund pilot grants to convert spare rooms into long‑term rental units; counties would administer

Senator Caden told the Senate Committee on Housing and Development on Feb. 12 that Senate Bill 58 would create a pilot program to fund modest home reconfigurations that add internal, separate living units to existing owner‑occupied houses. The bill directs Oregon Housing and Community Services to administer grants to counties, which would in turn award subgrants to homeowners for interior auxiliary dwelling unit (ADU) conversions.

Senator Caden described the program as a way to create rental opportunities without adding new utility or infrastructure burdens: the pilot would target owner‑occupied homes with existing extra bedrooms or unused space, fund remodels (the bill proposes up to $20,000 per unit), and require recipients to make the unit available at below‑market rent for up to five years. The sponsor proposed a $10 million statewide pilot to be distributed to up to 10 counties; if each county maximized awards at $20,000 per unit the sponsor said the pilot could yield roughly 500 units across participating counties (the committee discussed county caps up to $1 million each, less administrative costs).

Noel Marcus of Nesterly (a home‑sharing enterprise) described how a relatively small renovation and a placement service can make spare rooms or larger suites “shareable,” increasing affordable housing supply quickly and with low infrastructure cost. Joan Schroeder, who described local experience converting space for people with developmental disabilities, urged the committee to consider the bill’s potential to preserve community‑based living for vulnerable residents.

Committee members asked several implementation questions: whether system development charges or other city/county fees would apply; whether county governments could limit conversions for short‑term rental use; how the program would enforce the below‑market rent requirement and monitor occupancy for the five‑year period; and whether the program requires the property to remain owner‑occupied. Sponsor and staff said the bill contemplates county administration, local permitting and that counties may set compliance mechanisms and limits; the sponsor stated the pilot is intended for owner‑occupied dwellings and not for short‑term rentals.

No formal vote was taken. Committee members asked the sponsor and staff to clarify statutory language about owner occupancy and to provide a program manual describing eligibility, monitoring and possible recapture or revolving mechanisms.