AccessoryDwellingStrategies.com 1 Share of Households by Size, 1980 - - PDF document

AccessoryDwellingStrategies.com 1

Building an Accessory Dwelling Unit on Your Property a one hour primer Presented by Kol Peterson‐ Accessory Dwelling Strategies Willie Dean‐ Ground Up Design Works Annie Rose Shapero‐ Urban Nest Realty

Agenda Kol: What are ADUs Willie: Detached ADU zoning and design Kol: costs/financing Annie Rose: real estate/condoization Kol: current news, taxation, resources, upcoming events, book info

What are ADUs?

There’s confusion about the differences between ADUs and tiny houses on wheels …but they’re very different

Image of Caravan‐ The Tiny House Hotel

Graphic reference: http://www.jasonmclennan.com/articles/righteous_small_house_tt_winter09.pdf

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1 person 16% 2 persons 31% 3+ persons 53%

Share of Households by Size, 1960 State of Oregon

1 person 19% 2 persons 33% 3+ persons 48%

Share of Households by Size, 1970 State of Oregon

1 person 23% 2 persons 35% 3+ persons 42%

Share of Households by Size, 1980 State of Oregon

1 person 25% 2 persons 36% 3+ persons 39%

Share of Households by Size, 1990 State of Oregon

1 person 26% 2 persons 36% 3+ persons 38%

Share of Households by Size, 2000 State of Oregon

1 person 27% 2 persons 36% 3+ persons 37%

Share of Households by Size, 2010 State of Oregon

Persons per household (in Portland)

1‐2 person households 3+ person households

70% of residential zoning allows ADUs

Metro: 2015 growth management decision www.oregonmetro.gov/sites/default/files/Appendix%20 1a%20‐%20forecast.pdf

700K new residents by 2040

40 ft 5 ft 5 ft 0 ft Height

• Midpoint of the primary gable must

be <20ft high Exterior finish materials can match the main house or…..

• Roof pitch= 6/12 pitch or greater
• Trim= 3 ½” or greater
• Siding reveal= 6” or less
• Eaves= 1ft eaves on all side
• Windows must be at least at tall as

they are wide (not horizontal) ADU HOUSE

STREET

SIDEWALK

20 ft Maximum Size of ADU

• 800 sq ft or
• 75% of the living area of the main

house (only relevant if your house is <1066 sq ft) Building Lot Coverage

• Footprint of accessory structures

can not exceed 15% of the total lot Parking Must retain existing space (9’x18’) Height

• If the ADU is <15ft high…

1) No design matching requirements! 2) You can build within the setback! ADU HOUSE

STREET

≤ 24ft ≤ 24ft

Note: Eaves and gutters must fall within your property. No windows within 5’ of property lines.

15 ft midpoint 10 ft

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• Detached: garage conversions and new construction ‐ Expensive
• Basement conversions ‐

Less expensive Design/build cost for basic, custom new construction around Portland generally ranges between $125‐$250/sq ft for a fully livable detached dwelling unit. For an 800 sq ft custom ADU, owners should count on spending $125‐$250,

• r $100‐200K, $160K. Median of ~$200 per sq ft.

Smaller detached structures cost more per square foot. For a 400 sq ft custom ADU, people spend closer to $175‐$300 per sq ft,

• r $70K‐120K, $100K. Median of ~$250 per sq ft.

Cost of building an ADU

Fixed Costs vs. Variable Costs for ADU Construction

Fixed costs: kitchen, bathroom, electrical connection Variable costs: framing, roofing, insulation, permit fees, painting

ADU Financing Options

…but it’s getting better

Easiest and most common ways to fund ADU development ‐Liquid assets (savings, stocks etc) ‐Family loans Home Equity Line of Credit Loans‐– With a “HELOC” you wouldn’t need to refinance the existing property but need at least 20% equity. Every bank has a different program but you can use these loans for just about anything, including ADUs Sweat Equity rule of thumb: Half for material, half for labor. Work on the project yourself. Or, even barter have a handy friend build the ADU in exchange for X years of free rent. Upfront, you only pay for materials and subcontractors. Conventional Renovation Financing Options

• Homestyle loan– Conventional loan for updating homes upon purchase or refinance.

Prospect Mortgage, Umpqua, Homestreet, Eagle Home Mortgage

• 203K loan‐ FHA backed loan for updating homes upon purchase or refinance.

HomeStreet Bank and Prospect Mortgage

• Construction loan‐ For tearing down and starting from scratch. Requires getting a

bank to appraise value of property with future ADU at a rate high enough to allow them give you a loan. ADU construction loans have been issued for ADU’s through Advantis Credit Union, Washington Federal, Unitus

Jumping the Capital Hurdle: ADU Financing Options The SDC waiver has significantly boosted the development of ADUs in the last five years.

SDC Waiver begins in 2010

What will SDCs be in 2018? Could be $0. Could be $20K. Build now, while the SDC waiver is in effect. Recent home equity growth provides this opportunity for many Portland homeowners

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Average Property Taxes Increases in Multnomah County

Taxes (pre ADU) - $3390 Original tax hike (per reMav + ADU) - $6688 Reduced taxes (after first Mult county change) - $5812 NEW TAXES (after DOR mandate) - $5015 Total Tax increase after ADU - $1625

NO MORE WHACKY PROPERTY REASSESSMENTS! YAY!!!!!!!!

An easy way to estimate tax impact of any property improvement (including an ADU) Assumed ADU property improvement value x 0.014 Example: $100K ADU x 0.014= $1,400/year increase But, call Multnomah County Division of Assessment, Recording & Taxation at (503) 988-3326 to get an official estimate. You’ll have to provide an estimate of the “improvement value” of the ADU.

• ADU class with three site visits‐ June 25th
• Tiny House Tours‐ Sunday, June 5th and June 26th, 4‐5pm
• Ongoing site one‐on‐one fee consultations
• ADU Tour – Sept 18th?

Learn more about ADUs:

• AccessoryDwellings.org
• pdxadu.blogspot.com
• AccessoryDwellingStrategies.com