Thinking about adding an accessory dwelling unit near Lebanon’s medical campus but not sure where to start? You are not alone. With steady demand from hospital staff and health sciences students, the right ADU can offer reliable income and long-term value. In this guide, you will learn how ADUs work in Lebanon, what to budget, who will likely rent, and the steps to move forward with confidence. Let’s dive in.
Why ADUs near the medical campus work
Lebanon’s medical hub includes Samaritan Lebanon Community Hospital and Western University of Health Sciences’ COMP-Northwest campus. These anchors draw a constant flow of nurses, clinicians, students, faculty, and visiting professionals who value close-to-campus housing. Proximity and convenience are your edge.
Local demand drivers
- Samaritan Lebanon Community Hospital creates consistent housing demand from nurses, allied health staff, and visiting clinicians. Learn more about the hospital’s role in the community on the Samaritan site. Samaritan Lebanon Community Hospital
- WesternU Oregon’s COMP-Northwest campus brings medical students, faculty, and rotating clinical staff who often need semester or year-long housing. WesternU Oregon campus
What tenants value most
- Walkability or a short drive to the hospital and campus
- In-unit or on-site laundry, quiet space for study, and reliable high-speed internet
- Flexible lease options, including 30 to 90 days for traveling clinicians
- Furnished units for short- and mid-term stays
What Lebanon allows for ADUs
Lebanon permits ADUs in residential zones with clear size, height, and setback standards. The city’s ADU page is your primary reference. City of Lebanon ADU standards
Size, height, and setbacks
- Maximum floor area is 1,000 sq ft or 40% of the primary dwelling, whichever is smaller.
- Detached ADU height is generally up to 25 feet in RL zones and up to 30 feet in RM/RH zones.
- Standard residential setbacks apply. Rear yard setbacks may be 10 feet.
Parking and owner-occupancy
- No off-street parking is required for ADUs under city rules.
- Oregon law limits local governments from imposing owner-occupancy and extra off-street parking requirements for ADUs in many cases. Review the state statute for context. Oregon ADU statute ORS 197A.425
Permits and fees
- Expect building permits, plan review, and inspections. The city’s Applications and Fees page lists current planning and permit fees. Applications and Fees
- System Development Charges may apply for water, sewer, transportation, and parks. Confirm site-specific SDCs early. System Development Charges
Cost, timeline, and smart design
What it costs to build
ADU costs vary by type and finish level:
- Garage or interior conversion: about $60,000 to $180,000
- Attached ADU: about $150,000 to $300,000
- New detached ADU: about $200,000 to $400,000 or more for higher-end finishes
These are broad ranges; get local bids for accuracy. ADU cost guide
Typical end-to-end timeline
Plan for concept to completion in about 10 to 18 months in many jurisdictions. A common pattern is design 1 to 4 months, permitting 1 to 6 months, and construction 5 to 12 months. ADU process overview
Design for your renter
- For students and residents: quiet layout, desk space, bike storage, strong Wi-Fi
- For traveling clinicians: turnkey furnishings, blackout shades, easy parking, flexible leases
- For long-term staff: full kitchen, storage, and durable finishes
Rent potential and simple returns
Local one-bedroom rents often range around $1,000 to $1,800 per month, with broader Lebanon averages near $1,500 to $1,600 depending on condition and location. Near the hospital and campus, well-designed ADUs can be competitive.
To sketch a return, estimate annual rent, subtract a vacancy factor and operating costs, then compare the net to your total project outlay. Keep scenarios conservative to account for timeline shifts or market changes.
Key risks to watch
Market and policy shifts
Lebanon is a smaller market, so tenant demand is steady but limited in scale. Also, rules for short-term rentals can change. Verify intended use with the city before you build.
Construction and utilities
Site conditions, utility capacity, or panel upgrades can add cost and time. Confirm sewer, water, and electrical needs early through the city’s development services and your contractor.
Step-by-step plan to get started
- Confirm what you can build
- Review Lebanon’s ADU standards and note size, height, and setback rules. City ADU standards
- Estimate fees
- Size your budget and financing
- Get two to three contractor bids for your preferred ADU type. Review loan options that allow ADUs, such as renovation or construction-to-permanent loans. Fannie Mae ADU guidance and ADU cost guide
- Plan your tenant strategy
- Decide on furnished vs. unfurnished and lease length. Students, clinicians, and staff each value different features.
- Confirm taxes and insurance
- Contact the Linn County Assessor to understand how a new ADU affects your assessment and speak with your insurer about proper coverage. Oregon property tax guidance
- Prepare a timeline
- Map design, permits, and build phases. Align delivery with the academic calendar or hospital staffing cycles. ADU process overview
Buying or selling with ADU potential
If you are buying in Lebanon, focus on lots with clear ADU pathways, utility access, and layouts that maintain privacy. If you are selling a home with an ADU, highlight permitted status, separate entry, parking ease, and proven rental history if available. Professional presentation and accurate documentation help buyers see long-term value.
Ready to explore ADU-friendly properties near Samaritan and WesternU or position your home for the best result? Connect with Dieter Wehner and the iHomes Team for local guidance rooted in experience across the mid‑Willamette Valley.
FAQs
What is an ADU and is it allowed in Lebanon?
- An accessory dwelling unit is a smaller, independent home on the same lot as a primary residence, and Lebanon permits ADUs in residential zones under its published standards. City ADU standards
How big can an ADU be in Lebanon?
- The maximum size is typically 1,000 sq ft or 40% of the primary dwelling, whichever is smaller, with standard setbacks and zone-based height limits. City ADU standards
Do I need off-street parking or owner-occupancy for an ADU?
- Lebanon does not require off-street parking for ADUs, and Oregon law limits owner-occupancy and additional parking requirements in many cases. ORS 197A.425
How long does it take to build an ADU in Lebanon?
- Many projects run 10 to 18 months from planning to completion depending on design, permit timing, and construction. ADU process overview
Can I use an ADU for short-term rentals near the hospital?
- Short-term rental rules vary by city and can change, so confirm your intended use with Lebanon’s planning staff before you invest. Applications and Fees
Will adding an ADU raise my property taxes?
- Yes. ADUs are assessed as new improvements, which usually increases assessed value and taxes. Contact the county assessor for estimates. Oregon property tax guidance
What loan options can help fund an ADU?
- Common choices include home equity, cash-out refinance, renovation loans, and construction-to-permanent loans that recognize ADUs. Fannie Mae ADU guidance
