Perkins Architectural - Exchange - Recognition - What's an ADU? And why would you want one?

Hollywood Star, May 2010
by John Perkins
.pdf of the original article

The Portland city council passed an ordinance March 3rd that waived the
System Development Charges (SDCs) for Accessory Dwelling Units (ADUs)
for about three years. But what is an ADU and why would you want one?
ADUs often are called mother-in-law apartments.

For homeowners, the major hurdle in constructing an ADU has been the
$7,500 to $12,000 in city systems fees imposed. That hurdle has been
removed beginning April 15, 2010 and ending June 30, 2013. So, during this
period, the city systems fee is zero.

Zoning
The Portland Zoning Code allows every residentially zoned property to
contain an ADU in addition to the original house. The city views ADUs as a
key ingredient for increasing urban density while preserving the character of
a neighborhood. By waiving the fees for three years, the city hopes to
accelerate construction of officially recognized ADUs.

Size
ADUs are limited in area based on the size of the main house. New
standards soon will become official which will allow more flexibility
on how big an ADU can be. The new standards cap ADUs at 75 percent of
the area of the main house or 800 square feet, whichever is smaller. For
example: If your house is 1,067 square feet or larger, you can build the
maximum size allowed, which is an ADU up to 800 square feet. Less than
that and you can build only 75 percent of the size of your house. For
example, someone living in 1,000 square feet can build an ADU up to 750
square feet.

Green
ADUs are green by definition. They have two inseparable and consistent
characteristics that are standard bearers of environmentally sensitive design.
They provide a new living unit within city boundaries and have a small
physical footprint. Even if a homeowner used conventional construction
methods, the ADU will still have valid green credentials simply due to these
two characteristics. Additional provisions to green building are still a great
idea and will serve to improve the project’s already stellar “greenness.”
Adding solar heated water, sustainably certified lumber, energy efficient
equipment, sustainable materials, recycled products and low-VOC paints are
all options that can easily be incorporated in the design of ADUs. Other
green design options such as passive solar heat and natural ventilation can
also be considered as appropriate to the specific project site.

Economic sense
Accessory Dwelling Units make economic sense for many homeowners. By
investing from $30,000 to $90,000 — depending on its size, quality and
complexity — the rental income generated by an ADU can provide positive
cash flow even with an increased mortgage, or represent a reasonable return
on investment if paying in cash. Removing SDCs significantly improves the
overall financial performance of the project. Renting the new ADU is not the
only financial choice. Another strategy can involve doing a “flip flop” (see
below).

Downsizing
A couple who wants to downsize and loves their neighborhood can “flip
flop” the traditional concept and live in the ADU and then sell or rent the
main house. If they opt to rent the main house, they are able to maintain
their assets, be responsive landlords and have the flexibility to sell when the
time is right. If, instead, they elect to sell now, but want to stay in the ADU
indefinitely, an attorney can draw up the necessary papers. That option may
be a great way to sell the house to a grown child with a family and be able to
stay close to grandchildren while not being underfoot. ADUs are required to
have separate entries and can be designed so both house and ADU
occupants are able to keep their autonomy.

People who work from home can construct an ADU and use it initially as
office space. They keep the option to rent it in the future as either the
business grows and needs more space or circumstances change due to
switching careers, etc.

Mother-in-Law not required
Now may be the perfect time to build an Accessory Dwelling Unit. Interest
rates remain low, construction pricing is competitive and Portland has no
System Development Charges for the next three years. Whether you decide
to actually have your mother-in-law living next door or not, building a
“mother-in-law apartment” may be a very worthwhile investment and a
smart move.