Building an Accessory Dwelling Unit on Your Property What are ADUs? 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 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 AccessoryDwellingStrategies.com 1
Share of Households by Size, 1980 Share of Households by Size, 1990 Share of Households by Size, 2000 Share of Households by Size, 1960 Share of Households by Size, 1970 Share of Households by Size, 2010 Persons per household (in Portland) State of Oregon State of Oregon State of Oregon State of Oregon State of Oregon State of Oregon 3+ person households 1 ‐ 2 person households 1 person 1 person 1 person 16% 1 person 1 person 19% 1 person 23% 25% 26% 27% 3+ persons 3+ persons 3+ persons 3+ persons 37% 38% 39% 42% 3+ persons 3+ persons 48% 53% 2 persons 31% 2 persons 33% 2 persons 2 persons 2 persons 2 persons 35% 36% 36% 36% 700K new residents by 2040 70% of residential zoning allows ADUs Metro: 2015 growth management decision www.oregonmetro.gov/sites/default/files/Appendix%20 1a%20 ‐ %20forecast.pdf Maximum Size of ADU STREET Height STREET • 800 sq ft or • If the ADU is <15ft high… • 75% of the living area of the main SIDEWALK house ( only relevant if your house is <1066 sq ft ) 1) No design matching requirements! Parking 2) You can build within the setback! Must Building Lot Coverage • Footprint of accessory structures retain can not exceed 15% of the total lot existing space 40 ft Height HOUSE (9’x18’) HOUSE • Midpoint of the primary gable must midpoint be <20ft high 0 ft 20 ft 15 ft 5 ft 10 ft Exterior finish materials can match ADU the main house or….. • Roof pitch= 6/12 pitch or greater ADU ≤ 24ft • Trim= 3 ½” or greater • Siding reveal= 6” or less • Eaves= 1ft eaves on all side 5 ft • Windows must be at least at tall as Note: Eaves and gutters must fall within your property. they are wide (not horizontal) ≤ 24ft No windows within 5’ of property lines. AccessoryDwellingStrategies.com 2
Cost of building an ADU • Detached: garage conversions and new construction ‐ Expensive • Basement conversions ‐ Less expensive Fixed Costs vs. Variable Costs for ADU Construction Fixed costs: kitchen, bathroom, electrical connection Variable costs: framing, roofing, insulation, permit fees, painting 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, or $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, or $70K ‐ 120K, $100K. Median of ~$250 per sq ft. Jumping the Capital Hurdle: ADU Financing Options ADU Financing Options 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. …but it’s getting better 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 The SDC waiver has significantly boosted the development of What will SDCs be in 2018? ADUs in the last five years. Could be $0. Could be $20K. Build now, while the SDC waiver is in effect. SDC Waiver begins in 2010 Recent home equity growth provides this opportunity for many Portland homeowners AccessoryDwellingStrategies.com 3
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 • ADU class with three site visits ‐ June 25 th But, call Multnomah County Division of Assessment, Recording & • Tiny House Tours ‐ Sunday, June 5th and June 26th, 4 ‐ 5pm Taxation at (503) 988-3326 to get an official estimate. • Ongoing site one ‐ on ‐ one fee consultations You’ll have to provide an estimate of the “improvement value” of • ADU Tour – Sept 18 th ? the ADU. Learn more about ADUs: • AccessoryDwellings.org • pdxadu.blogspot.com • AccessoryDwellingStrategies.com AccessoryDwellingStrategies.com 4
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