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We interpreted the results of a survey of accessory dwelling unit (ADU) owners in Portland, Oregon. By
comparing survey responses to Census summaries and other data, we made an initial investigation into
some common claims and questions about the effects of ADUs. This analysis finds that in Portland:

1. ADUs do provide housing. At any one time about 80% of ADUs are in use as long-term residences.
The remaining 20% have alternative uses, but can be converted to housing with no further
construction or permitting. Changing uses is part of the attraction for owners.
2. Most properties with ADUs (64%) are occupied by their owner, even though Portland has no
requirement they do so.
3. ADUs seem to be at least as attractive to renters as apartments in multifamily buildings, and may be
preferred by them.
4. ADUs are likely to have a low environmental impact compared to other dwellings. Their median area
per resident is 44% lower than newly constructed single family residences, and some ADUs have a
notable number of above-code green features.
5. ADUs are associated with an average of 0.93 cars per dwelling, lower than the Portland average of
1.31 for all new rentals. Of those 0.93, an average of 0.46 are parked on the street. Since ADUs are
also extremely rare, ADUs have had negligible impact on parking conditions citywide. ADUs may be
as effective in reducing vehicles owned per household as transit-oriented developments.
6. ADUs do serve older persons, both as places to live and assets to own, but not to a greater extent than
other forms of housing. However, many Portland ADUs are owned by 55-64 year-olds, who will be
65+ in a decade. The beneficial effect of ADUs for older persons will likely be larger then.
7. ADUs support the community economically through one-time construction costs, averaging $78,760
per unit, and ongoing property taxes, estimated to average $1134/yr (using recent tax levy rates).
8. The claim that ADUs provide affordable rental housing is a complex one to evaluate. Housing
affordability has been defined in many ways, and ADUs have unusual properties as rentals. 18% of
Portland ADUs are occupied for free or extremely low cost. This unregulated, volunteer affordable
housing has been created with little subsidy or intervention from the government. Meanwhile, about
80% of ADUs rent for market rates, or a slight premium, compared to apartments of similar size and
9. Financial gain through rental income is the most common motivation for the homeowner-developers
who create ADUs, followed by housing for a family member or helper. Construction costs, design
constraints and financing are the most common barriers to ADU development.

Overall, ADUs seem to differ from other housing in the individualistic ways they are created, owned, and
managed by typical homeowners rather than developers and investors. In Portland, this grassroots,
nonprofessionalized kind of development appears to be providing a variety of benefits to owners and

Executive Summary from 2013 Accessory Dwelling Unit Survey in Portland, Oregon
Evaluation and interpretation of a survey of ADU owners

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Accessory Dwelling Unit Planning Division
Quick Reference Guide (541)-388-5570 option 3

An accessory dwelling unit (ADU) is a small dwelling unit on a property that

contains a single-family dwelling unit as the primary use. An ADU may be attached to
or detached from the single-family dwelling. ADUs are often called mother-in-law
apartments, granny flats, or garage apartments.

See Bend Development Code (BDC) 3.6.200.B at for detailed requirements.

ADUs are permitted uses on residentially-zoned lots or parcels with a single-family dwelling or townhome.
A maximum of one ADU is allowed per lot or parcel.
The City recommends that the applicant complete their due diligence by checking any applicable private
Conditions, Covenants, and Restrictions (CC&Rs) that may limit ADUs on the subject property. The City
does not enforce or monitor private CC&Rs.
ADUs in NorthWest Crossing must comply with special standards outlined in BDC 2.7.300. For all other
properties, the standards of BDC 3.6.200 apply, summarized below.

Sizing Limits
Maximum Floor Area
if property is 6,000 sq ft. or less: 600 sq. ft. of enclosed floor area
if property is greater than 6,000 sq ft.: 800 sq. ft. of enclosed floor area
Maximum Floor Area Ratio (FAR)
(for all buildings on site) 0.55
Review BDC 3.6.200B for guidance on calculating FAR.
Adhere to existing lot coverage requirements for
Maximum Lot Coverage:
your zoning district (see BDC Chapter 2.1)
Adhere to ADU design standards (see pg. 2) and
Building Setbacks: setback requirements for your zoning district
(see BDC Chapter 2.1)
Maximum Height for detached ADU
if Primary Dwelling Unit 25 ft. or taller: 25 ft.
if Primary Dwelling Unit is less than 25 ft.: Height of the Primary Dwelling Unit
Maximum Height for attached1 ADU: Height for zoning district (see BDC Chapter 2.1)
1 Attached means that the building is connected to another building by a common wall that is fully enclosed for 25% of
the length of the side of both buildings.

Design Standards
For detached ADUs:
Minimum distance from primary single-family dwelling unit: 6 ft.
For second story ADUs over 600 sq. ft.
and abutting an SR 2 , RL, or RS zoned property:
Minimum setback for exterior staircases doorways, and outdoor living
areas oriented towards the exterior of the abutting property: 10 ft.

Updated 07/07/2016
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Site Improvements (BDC 4.2.400)
Parking and Driveways: Required parking areas and driveways must be paved

Sidewalks must be installed if sidewalks exist within 600 ft. of

Sidewalk and Curbs: the property on the same side of the street; corner lots require
ADA-compliant curb ramps (see BDC 4.2.400)
Water and Sewer Service: Must meet Oregon code for one and two-family dwellings
(Consult a licensed plumber or professional designer/architect to
determine if code requirements are met)

If property is not served by City of A will-serve letter is required from the serving water district
Bend Water Call Avion at 541-382-5342 or Roats at 541-382-3029

If property is on a septic system Septic Authorization Form signed by City of Bend and
and over 300 from City of Bend Deschutes County required

If property is on a septic system Connection to City of Bend sewer main will be required.
and less than 300 from City of
Bend sewer
Three spaces: One for ADU, two for primary dwelling
Minimum On-Site Spaces: One space may be on-street if on-street parking
credit is permitted (see BDC 3.3.300)
Minimum Dimensions
If stall is at 90 degrees: 9 x 20 ft.
If stall is parallel and on private property: 9 x 22 ft.
For stalls at other angles See BDC 3.3.300.E.1
Minimum Backup Distance for Alley Parking: 24 ft.

Required Review Process

1) File and pay fee for Minimum Development Standards Review (Review time ~30 days)
2) Review decision and file for a Building Permit (Review time varies; anticipate 4-8 weeks)
3) City issues Building Permit
4) Pay permit fees and System Development Charges (SDCs)

2016-17 Fees (effective July 1, 2016 June 30, 2017)

Minimum Development Standards (MDS) Review $842.40

E-mail for estimate

Building Permit
(Note: fee estimate includes SDCs)
System Development Charges (SDCs) $4,141 minimum
Streets $1,362
Parks $2,779
Water & Sewer Varies (only applicable if upgrading size of
water/sewer service lines)

Updated 07/07/2016
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City of Bend
Building Safety Division
Community Development Department
710 NW Wall Street Bend, OR 97701
ph: (541) 388-5528 fax: (541) 388-5519 email:
Residential Submittal Requirements / Checklist
Check each box to verify requirements are met. (Plan check fee is required at time of submittal.)

I General
Plan orientation as landscaped for reading left to right.
All plans to follow prescribed naming conventions (see eplans user manual).
Each sheet to be uploaded into eplans as separate file.
Supporting document files will be uploaded into eplans as multi-page file.
File types can be PDF or DWF.
Reserve space for City stamps (see eplans user manual).
Completed permit application and this checklist must be uploaded with submittal.
II Site Plan (site plans are not required for projects consisting of only internal remodels)
Legible, including North arrow and drawn to scale (such as 1"=20').
Orientation of footprint matches floor plan (ie garage left).
Property line locations, existing easements with dimensions, tree locations & trunk diameter.
Show location of existing and proposed utilities (water, sewer, power, gas, phone, cable/broadband) with dimensions to
property line and surrounding items. Note above grade items, including cabinets, vaults, pedestals and poles.
Show all adjacent street names.
Show outline of existing and proposed structures with distances to property lines and between structures; setbacks
shall be identified with written dimensions and drawn to scale. Include any cantilevers and eaves.
Indicate height of all structures inclusive of roof ridgelines (from finished grade).
Show building and garage entrances; driveway and access from street. Indicate driveway material (concrete, etc.).
Include catch basins/crosspipes/drywells and any sidewalks adjacent to property.
Indicate and show breakdown of building surface coverage calculations (square footage of lot, building footprint and
percentage of lot coverage). Include formula for 5% exclusion of decks and covered porches.
Include floor area ratio (FAR); may not exceed 50% of lot area, see Development Code for details.
If on septic system, show drainfield location. Submit completed septic authorization form.
Indicate elevation at property corners.
For slopes greater than 10%, show contours.
For lots with 4 ft. or more of elevation change across the building footprint, show existing and proposed elevations
at the building corners.
Show site drainage using arrows to indicate direction of flow; show methods and locations for onsite drainage detention.
Show gutters w/ down-spout locations if applicable.
For lots with impervious surface greater than 5,000 sq ft, projects disturbing more than one acre, or projects proposing
a UIC (underground injection control), include drainage calcuations (sq footage of impervious surface X .2).
III Plans
Plans must be legible, drawn to scale (such as 1/4"=1') and shall include the following:
Residential Energy Checklist.
Foundation plan showing all structural elements, including hold-down locations.
Elevations accurately representing building site and grading (1 for each side of building showing existing and
finished grades) with dimensions from finished grade to peak of highest point on roof. For sloped lots,
provide dimension at each corner and mid-point for all four elevations.
Typical cross sections for the living space & garage space.
Lateral bracing design per 602.10 or engineered design.
Any engineering provided must contain a current engineer signed stamp and design criteria.
All items from the engineering packet must be included on all appropriate plan sheets.
Detailed floor plans with square footage; include location of heat source and water heater as well as type (gas or elect.).
Indicate emergency egress windows with required dimensions and sill heights for bedrooms and basements.

** This document may be revised at any time without notice

Q:\Permit Center\Permit Center Applications\Building Division Forms and Applications\Applications & Submittal Requirements\Templates (not for public
use)\Residential Submittal Checklist 10-9-15.xl
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Floor framing (if using an engineered system, a layout will be required from the manufacturer, including the size, type
and spacing of all floor joists, as well as the size and type for all supporting beam & cross-referenced design
calculations). All floor framing sheets, details and beams must match.
Roof framing (if using Roof Trusses provide engineered details of all trusses to be used, including a layout indicating
the placement of each truss). Include engineered drag trusses and truss bracing details.
Beam calculations with all beams sized and identified and cross-referenced on the plans.
IV Special Circumstances - Demolition
A separate Demolition application must be submitted if you wish to demo prior to approved project/permit.

V Sidewalk and ADA ramp Installation Requirements

If an ADA ramp is required, provide a detailed design complying with PROWAG and City standards.
Sidewalks will be installed and need inspection and have already been reviewed on a PUD.
Sidewalks already exist on this property and have been previously reviewed and inspected.
Sidewalks are required per approved subdivision construction drawings or since they exist within 600 ft of property.
Sidewalks are NOT required per approved subdivision construction drawings, nor exist within 600 feet of property.
VI Driveway Approach / Curb Cuts / Sidewalk Cuts
The installation of a driveway approach and/or the cutting of a curb or sidewalk in the public right-of-way for any reason
requires a Work in the Public Right-of-Way permit, separate application must be submitted.
Public street access approach install, ROW permit required.
Public alley access, alteration to alley, ROW permit required.
Private street or private alley access, no ROW permit required.
Public alley access, no alteration to the alley, no ROW permit required.
Using existing approach, not cutting the curb, no ROW permit required.
Rolled curb, curb tight, not cutting the curb, no ROW permit required.
VII Grading, Excavation and Stormwater Management Questionnaire
If any of the the following apply to the site property a Grading, Clearing & Erosion control permit is required. A separate
permit application must be submitted.
Y N Please indicate if the conditions below exist on the site by marking the appropriate box (Y=Yes, N=No).
Excavation or fill exceeding 2 feet * * excavation for foundations are exempt
Excavation or fill within 2 feet of property boundary
Excavation, fill or vegetation removal within riparian corridors
Alteration or creation of slopes greater than 20%
Tree removal of trees greater than 8 inches diameter at breast on parcels greater than 1 acre
Contains impervious surface greater than 5,000 sq ft
Project disturbs more than one acre
Project proposes a UIC (underground injection control)
VIII Other
SDCs Loan applies; SDC Loan Application is attached.
Applications for SDC Financing and for the Revolving Loan require a minimum of 7-10 business
days to process. It is recommended that those applications be submitted at time of plan submission.
Energy grant loan will be applied for; Revolving Loan Application is attached.
Site contains greater than 12" of compacted fill material or less than 90% of the maximum dry density
at optimum moisture content; Geotechnical report is provided.
Permits for temporary power are sold separately, submit a separate Electrical Permit Application when ready.
to purchase your temporary power permit

By signing I acknowledge that all information contained in this checklist is true to the best of my knowledge.
Agent/Builder (I certify that I sign this application personally OR Owner
on my own behalf and as agent for the landowner.)

I am authorized to fill out this form YES NO YES NO

I am authorized to fill out this form
Signature (Agent) and Date Date Signature and Date

(Print Name) (Print Name)

** This document may be revised at any time without notice

Q:\Permit Center\Permit Center Applications\Building Division Forms and Applications\Applications & Submittal Requirements\Templates (not for public
use)\Residential Submittal Checklist 10-9-15.xl
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A Sample Site Plan ROOT
For Successful New Single Family Residential J
93.0' PROTECTION 93.0'
(NSFR) Project Submittals ZONE 50.0'
Instructions: This sample site plan provides
an example of how to prepare a site plan. U
Your submittal must include a site plan that A 96' LI IS
includes all of the existing and proposed 8'
94' EA ING
conditions included on this sample site plan. 98' SE 10
M '
Your site plan must be drawn on EN
11"x17" or larger paper and
drawn to a scale of 1" = 10'.
Please be aware that since every project 6' HIGH 96' L
is unique there may be some situations CONSTRUCTION
where you will be asked to provide FENCING
additional information.
A Existing on-site tree 98'
to be retained or removed 2" MIMOSA
TOW 98.0'
B Root protection zone/fencing - typically RETAINING

BOW 94.0'
1 foot radius per inch of tree diameter K WALL
(measured 41/2 feet above the ground)
98.0' 5' MIN.
C Proposed on-site new tree TO CENTER
with species and size 4'X5'
D Existing street tree to

be retained or removed O

10' MIN.
10'X10' 3" ABS
E Proposed street tree PAVED RAIN DRAIN
F Right-of-way configuration 98.5'
(sidewalk, planting strip, curb
and street name)
G Existing and proposed locations

of underground utilities

H Distance from building to

I Distance from garage entry ELEVATION = 101.5'
to property line

J Finished grade elevations at property
corners and building corners 5' 40' 5'

K Retaining wall with top of wall (TOW) 4'

elevation and bottom of wall (BOW) GAS
elevations FIREPLACE

L Two foot grade elevation COVERED

contours, existing J
M Two foot grade elevation ELEV. 100.0'
contours, proposed
N Location and size of existing easements 99.5'
O Stormwater disposal type and size
P White space for City stamps EXISTING 24"
LOT AREA ......................5,000 SQ FT

DRIVEWAY.........................360 SQ FT
PATIO .................................100 SQ FT 100.0' 100.0'
WALK ...................................90 SQ FT


_______________________________ PROPOSED STREET UTILITY



TOTAL .............................1,884 SQ FT F

FOOTPRINT....................1,196 SQ FT CURB OR EDGE 3' 18' 3'
R-12345X MH


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Floor plans and foundation plans
A floor plan, also known as a plan view, is what you would see if you were to look straight down at a floor or base-
ment with the roof or floors above removed. You will need to provide one floor plan for each level of the building on
which work is being done.
If you are constructing a new building or an addition, you will also need to provide us with a foundation plan. This
plan should show the layout, dimensions and details of continuous concrete slabs, footings, reinforcing steel, and
the strength of the concrete to be used. The location of the crawl space access and the foundation vents must also
be shown.

Existing wall
Existing wall to be removed
New opening
New wall
Sample Floor Plan Opening infill


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A floor plan for each level of the building being constructed or remodeled must show the location of all full and partial
height walls, the size and proposed use of all rooms affected by the work and a north arrow.
The location, size and type of each window must be shown on the floor plan.
The location of bearing walls, headers and beams supporting loads from above must also be shown on the floor plans
or shown on separate framing plans. Floor plans must show all steps and stairs.
Plumbing fixtures, heating and cooling equipment, electrical outlets, switches, etc. are typically shown on the floor
plan, but can be shown on separate plans.
The floor plan must also show the location of all smoke detectors.


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Section drawings
Section drawings, sometimes called cross sections, are what you would see if you cut vertically through a building
from the tip of the roof down through the ground, and then looked at what the cut exposed.
Section drawings are a useful way of displaying structural information and information about construction materi-
als that are needed to do our code review. Full sections for residential construction are usually drawn at a scale of at
least 1/4 inch =1 foot and wall section and details at a scale of least at 1/2 inch = 1 foot. Partial sections may be drawn
at a larger scale to show something in detail such as footings, overhangs and stairs.
To get a building permit for new construction or an addition, you must provide section drawings that show typical
building conditions.
For simple projects, a
single section drawing
the size of the foot-
ing and the distance
between ground
level and the bottom
of the footing;
the size of the foun-
dation wall and how
high it will rise above
the ground;
the size and spacing
of structural mem-
bers such as beams,
joists, studs and
rafters which are
not shown on other
wall, ceiling and roof
coverings and fin-
wall, floor
and ceiling insula-
ceiling heights;
eaves, decks and
other projections.
For more complex
buildings or additions,
full sections through
the work in multiple
directions and at differ-
ent locations may be
required to fully explain
the work. Separate
structural section draw-
ings or details may be Sample Section Plan
required, in addition to
building or architectural sections, to show the structural connections.
For buildings containing new or revised stairways, stair details must be provided which indicate the construction
materials, structural support and dimensional relationships to surrounding construction.
The purpose of building plans is to provide the City of Portland with a complete and accurate description of your pro-
posed project. If there is something you think you will need to explain when you come to the Development Services
Center, please put it on the drawings.
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Building elevation drawings
Building elevation drawings are exterior views of the building, sometimes identified as front, rear, left, right; or
north, south, east, west. Any project that requires a change in the exterior of the building must have building
elevation drawings.
Elevations must be drawn to scale,
1/4 inch = 1 foot
is the normal scale.
Elevations show the level at which the ground meets the building, the slope of the ground where it meets the building,
the vertical location, size of windows and doors, the type of siding and roofing, the height and configuration of guard-
rails and similar features on the exterior of the building.

Sample Elevations


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Newly Built Accessory Dwelling Units
Ea rn tncenttves for energy-efftcte nt ADUs

Interest m accessory dwelling untts AOUs IS

stead1ly climbmg as more and more
homeowners see the value of havmg an extra
IMng or rental space on thelf property It can
also benefit you as a builder Energy Trust
offers performance-based 1ncentr:es to bu1lders
of energy-effic1ent ADUs that earn an EP S"'
Oualifymg umts must meet spec1fic effic1ency
reqUirements and are des1gned to del"er low
energ)' costs and superior overall performance

Details Elig ibility Steps Resource s

ll Stte IS in Energy Trust terntory

ll Structure must be perm1tted as an ADU

ll ADU must be detached from the mam res1dence

ll ADU must have its own USPS matling address separate from mam
ll ADU must be mtended for use as a pnmary res1dence

ll ADU must adhere to square footage limitatiOns set forth by local

ll ADU must receive its own third-party verification

ll ADU must receive an EPS

ll Bu1lder or owner-builder must be a trade ally With New Homes program

Detail s Elig ibility St eps Resource s

Establish your eligibility {see the Eligtbthty tab)

2 Select a third-party verifier in accordance wtth Energy Trust's

requ~rements .

3 Your verifier wtll inspect your home and perform dtagnostic tests to
evaluate energy performance

4 Once the home has been built and venfied your verifier will update the
proJect model w1th mspection details and performance results confirm
your incentives and issue the final EPS

Ouest1ons? Call us at 1 877 283 0698 option 1 or email us at

n ewhomes@ene .

http :/ / ly/programs/new-homes/adu/

11 Accessory Dwelling Strategies LLC,

...._ ___ _,..)
The Permit and the ADU Design Build, Time and Cost Breakdown

Six and a half weeks after submitting the permit application to the City of Portland, we
have gotten the permit! Needless to say, I am thrilled to move forward with the
construction phase.

We're going to be moving really fast now, so I'll be posting frequent updates of the
construction process. In the next two days, I'll post pictures and videos of the
groundbreaking, excavation, and foundation wall forms.

This post however, is about the costs and time of this initial phase of the project, as well
as the cost of the ADU project overall. I know that cost is the most major factor for
everyone who is considering such a project. So, I'll be transparently reporting on the costs
of this project so that others have a good sense of the costs involved.

To start, it is very noteworthy that Portland has temporarily waived all System
Development Charges for ADUs. System Development Charges, which are the city's
administrative fees for transportation, water, and waste management for all new
construction projects, typically ran $10,000 for ADUs. This policy has obviously been a
major recent incentive for many residents to consider building new ADUs (or legalize
their existing ADUs).

Portland took this measure to actively promote ADUs to add density to the urban core.
This is one the many laudable urban planning policies that consistently keeps Portland
near the top of the list for being on the nation's most livable, walkable, and bike-able

System Development Charges for ADUs through June, 2013.

ADU Costs

One of the goals for this project is to build high-quality custom construction at a
relatively low cost; partially by making better design decisions, and partially by sourcing
Building an Accessory Dwelling Unit on Your Property in Portland Class

12 Accessory Dwelling Strategies LLC,

materials and labor astutely.

Here is a time and cost breakdown of the design phase that I just completed, which
amounted to $8,196.

Design Phase Cost Time Breakdown

Generally speaking, custom high quality construction costs $150-200 sq. ft. My original
goal was to get the whole project done for $100 sq ft, but it's looks like I won't be able to
get the project costs that low.

Here are my current cost projections. If I am able to stick to this budget of $88,196, the
project will cost ~$110 sq ft.

Of course, there's a well-known rule of thumb that says that you should always expect to
pay 20% more than what you estimated, and that the project will take twice as long as
you had hoped.

Building To Code

Many people are interested in building ADU's and the daunting capital expense is their
only deterrent. I know that some have converted garages into livable spaces for as little as
$20K without a permit, and that others spend up to $200K to build an ADU from scratch
with a permit. Since this post comes in conjunction with the permit, I've attached the line
item Portland BDS permit fees below for reference, which, for this project, amounted to

Building an Accessory Dwelling Unit on Your Property in Portland Class

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Building legally requires more work that building illegally and it comes at a cost.
However, it gives more peace of mind, legal assurance, and better financial payback to
the homeowner for rental and resale. Building legally or not is a big decision that the
homeowner must carefully consider.

If you're considering whether and how to build a new structure in accordance with the
city's rules , I've found that the City of Portland BDS is great about answering questions
about new construction by phone or in person. So, don't hesitate to sit down with them
and talk frankly about your ideas--you don't even have to give them your address if you're
still trying to decide how to proceed.

The City Of Portland permit costs amounted to $4,205.38 for this project.

I'm curious to understand how this permit fee compares other permit fees around the
country, and whether the fees are structured on a per sq ft basis.
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14 Accessory Dwelling Strategies LLC,

To me, this permit fee seems reasonable. If the $10K system development charges were
in effect, I would have balked at funding this project. So, again, I applaud Portland's
active promotion of ADUs.

Quality, Cost, and Time

There's a huge range of tactics that effect project cost. But, my Sustainable Home
Professional instructor introduced me to a great rule of thumb, called the Project
Management Triangle:

'There are three relational pillars in every design/build project: Quality, Cost, and Time-
and it's hard to optimize all three pillars.'

In other words, you can build a high quality project at low cost, if you have lots of time.
You can build a high quality project in little time if you have lots of money. And you can
build quickly and cheaply if you don't care about quality.

Finding that sweet spot in the middle is really tough. But, that doesn't mean we can't try!

A Passively Virtuous Choice

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It is a government's grander policy challenge to steer individuals towards the personal
choices that result in the best societal outcome; to purposely induce the virtuous choice
by making it a passive choice.

I'll define a 'passive choice' as the expected behavioral choice that a self-interested or
apathetic person would reasonably make.

Optimally, individuals' passive choices will collectively result in the best societal
outcome. It is in our best interest to design systems where individuals' passive choices are
the most regenerative for society. Collectively, we should design for the adoption of
individual behaviors that benefit everyone, whether or not the individual is actively
choosing to be virtuous.

For example, if driving to work is cheaper and quicker than taking the bus or biking, then
more people will surely choose to drive.

Conversely, if driving to work takes more time and costs more money than taking the bus
or biking, then more people will choose these alternatives.

Generally speaking, marketing the adoption of energy efficiency choices is easier than
marketing behavioral change. For example, most environmentalists understand that
driving alone has a bigger environmental footprint than taking the bus. But, if youre
accustomed to the ease and costs of driving alone to work, it is difficult to force yourself
to change your behavior to take a bus every day. Therefore, a policy that asks citizens to
drive alone less, is not as pragmatic as a policy that encourages us to purchase a more
efficient vehicle.

If we want people to get out of the habit of driving their car alone for their daily
commute, then driving alone cannot be the passive choice. Biking or taking transit must
actually become the best way for people to get to work in terms of cost and time savings.
If we are to bike or bus to work, society must strive to make it the more compelling
option, the passive choice.

Many environmentalists advocate for behavior change and there is a place for that. But,
out of pessimism, mixed with a cup of pragmatism, I prefer to advocate for design

ADUs have the potential to help us passively make virtuous societal choices in the face
of many looming environmental threats, not the least of which is climate change. The
building and transportation sectors are the two most energy intensive sectors in the US.

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The charts above show the energy and carbon dioxide emissions
associated with various sectors of the US economy.

Smaller, urban infill housing represents an energy cure in the building and transportation
sector. Compact, infill housing is akin to surgery intended to fix the clogged arteries of
the building and transportation sector.

Urban density is a prerequisite for a robust and healthy transit system. ADUs have
potential to organically add density to the urban core in a meaningful, personalized,
creative way.
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From 'Research on Factors Relating to Density and Climate Change'.
The chart above shows the minimum number of
residential dwelling units per acre needed
to economically justify the associated transit service.

ADUs are, by definition, smaller than the average residential dwelling; and building
smaller is arguably the single most significant factor in building greener.

ADUs have the potential for a rapid payback period. In my case, I am striving for a five
year payback period, a period which qualifies as a good business investment.

Economically, ADUs are a shot in the arm for a homeowner's personal financial
portfolio, the city's tax base and the state's unemployment rate. They also could help
satiate the nation's thirst for creating US-based "green" jobs in a down economy.

Whether or not I cared about the green house gas reduction benefits or the benefits to the
local economy, my self-interested choice to build an ADU is a societally virtuous one.

Common Forms of Living Smaller

Much residential "green building" attention has been placed on material selection,
alternative power sources, and mechanical efficiencies. These choices all play a role in
Building an Accessory Dwelling Unit on Your Property in Portland Class

18 Accessory Dwelling Strategies LLC,

building "green", but arguably, none of these charismatic green features are as important
as the energy efficiency gains achieved through building and living in smaller spaces.

Smaller houses can take many forms, and the three common forms that I'll mention in
this post, all achieve notable reductions in terms of their environmental lifecycle impact
reductions: Multi-family, ADU, and "Tiny Houses"

Let's begin with a recent EPA-sponsored report about the energy impacts of residential
housing choices. As stated on the introductory page,

"Buildings and transportation together account for about 70 percent of energy use in the
United States and are responsible for about 62 percent of U.S. greenhouse gas

The findings in this report illustrate that certifiably green buildings are not as significant
in reducing that energy as where you build (Conventional Suburban Development or
Transit Oriented Development) and the housing type (Single Family Detached, Single
Family Attached, and Multi-Family). The report findings are summarized well in this rich

For me, Im beholden to my innate desire to design and build something on my own
terms. There are strong correlations between the size of average Single Family Detached,
Single Family Attached, and Multi-Family homes. However, the impact of housing size
perhaps has a more direct correlation to energy use than those building type descriptions.

From 1950, to 2008, the average sq ft per person has increased from 259 ft to 961 ft, a
372% increase.

Building an Accessory Dwelling Unit on Your Property in Portland Class

19 Accessory Dwelling Strategies LLC,

ADUs are an accessible way for urban homeowners to make a big stand on issues that
span community building, environmentalism, urbanism, and climate change. Done well,
ADUs present a compelling personal financial opportunity for individuals to create a
regenerative, personal financial portfolio. I plan to discuss the economics of my ADU
and ADUs at large in future posts.

I have extracted some graphics from a presentation about the findings from the Oregon
DEQ report, "Life Cycle Approach to Prioritizing Methods of Preventing Waste from the
Residential Construction Sector in the State of Oregon". I anticipate that this
groundbreaking report will prove to be pivotal in the green building movement and will
help to instigate a shift toward an emphasis on living smaller.

Building an Accessory Dwelling Unit on Your Property in Portland Class

20 Accessory Dwelling Strategies LLC,

Building an Accessory Dwelling Unit on Your Property in Portland Class

21 Accessory Dwelling Strategies LLC,

Excerpts for from

I believe ADUs will naturally become more and more popular where there is sufficient
housing demand and where they are allowed by zoning laws. With a few exceptions in
the US, ADUs are not legal.

Building an Accessory Dwelling Unit on Your Property in Portland Class

22 Accessory Dwelling Strategies LLC,

Table 1. Single Family Price and Cost Breakdowns
2015 National Results
Average Lot Size: 20,129
Average Finished Area: 2,802
I. Sale Price Breakdown Average Share of Price
A. Finished Lot Cost (including financing cost) $85,139 18.2%
B. Total Construction Cost $289,415 61.8%
C. Financing Cost $6,285 1.3%
D. Overhead and General Expenses $26,345 5.6%
E. Marketing Cost $3,739 0.8%
F. Sales Commission $15,104 3.2%
G. Profit $42,292 9.0%
Total Sales Price $468,318 100%
Share of
II. Construction Cost Breakdown Average Construction Cost
I. Site Work (sum of A to E) $16,092 5.6%
A. Building Permit Fees $3,601 1.2%
B. Impact Fee $1,742 0.6%
C. Water & Sewer Fees Inspections $4,191 1.4%
D. Architecture, Engineering $4,583 1.6%
E. Other $1,975 0.7%
II. Foundations (sum of F to G) $33,447 11.6%
F. Excavation, Foundation, Concrete, Retaining walls, and Backfill $32,576 11.3%
G. Other $871 0.3%
III. Framing (sum of H to L) $52,027 18.0%
H. Framing (including roof) $44,640 15.4%
I. Trusses (if not included above) $3,884 1.3%
J. Sheathing (if not included above) $1,238 0.4%
K. General Metal, Steel $1,272 0.4%
L. Other $993 0.3%
IV. Exterior Finishes (sum of M to P) $43,447 15.0%
M. Exterior Wall Finish $20,717 7.2%
N. Roofing $10,069 3.5%
O. Windows and Doors (including garage door) $12,127 4.2%
P. Other $534 0.2%
V. Major Systems Rough-ins (sum of Q to T) $37,843 13.1%
Q. Plumbing (except fixtures) $12,302 4.3%
R. Electrical (except fixtures) $12,181 4.2%
S. HVAC $12,623 4.4%
T. Other $738 0.3%
VI. Interior Finishes (sum of U to AE) $85,642 29.6%
U. Insulation $6,467 2.2%
V. Drywall $11,744 4.1%
W. Interior Trims, Doors, and Mirrors $12,409 4.3%
X. Painting $9,002 3.1%
Y. Lighting $3,517 1.2%
Z. Cabinets, Countertops $16,056 5.5%
AA. Appliances $4,463 1.5%
AB. Flooring $13,367 4.6%
AC. Plumbing Fixtures $4,465 1.5%
AD. Fireplace $2,760 1.0%
AE. Other $1,393 0.5%
VII. Final Steps (sum of AF to AJ) $19,567 6.8%
AF. Landscaping $6,156 2.1%
AG. Outdoor Structures (deck, patio, porches) $4,349 1.5%
AH. Driveway $6,240 2.2%
AI. Clean Up $2,054 0.7%
AJ. Other $768 0.3%
VIII. Other $1,349 0.5%
Total $289,415 100%


23 Accessory Dwelling Strategies LLC,



1 2 3
Finance with an Finance based Finance
existing or new on existing independently
main house home equity of main home
One mortgage for the entire Home equity loans and home Besides personal loans, credit
property. Loans based on as equity lines of credit provide cards, and family loans there
completed value of the main home funding to build an ADU if you arent any currently established
+ future ADU, which provides the have sufficient equity built up second mortgage options for
funds needed to construct the ADU. in your main home. These are people who dont have sufficient
considered second mortgages. equity (option 2) or dont want
to refinance (option 1).

Accessory Dwelling Strategies LLC,

FEATURED IN THIS GUIDE!Turn over for more information FINANCING GAP!
Contact if you offer this financing.


This is not a comprehensive guide to every ADU financing option available on the market. Its a snapshot of some of the options available in the Portland, Or-
egon metro area during the Fall of 2014. This guide is an educational starting point for homeowners and is not meant to endorse any one financial institution.
Updates of this guide may occur in the future, so please contact the site administrators of if you know of any loan options that help fill
the FUNDING GAP mentioned above. We do not guarantee the accuracy of this information since it is difficult to standardize loan scenarios between different
lenders and changing market conditions may make some of this information obsolete. Contact the financial institution directly to discuss options.
Max Loan to Down Payment Max Const. Loan Max Loan
Scenario Financial Institution Loan Name ADU Type1 ADU Style2 Loan Terms Fees3 Loan Based On4
Value Minimums Amounts Amounts
renovation 15 yr fixed; 5/1 & $417,000 (SFR);
attached or 90% LTV, 75% LTV 10% (SFR), 25% No max amount as completed
Advantis Credit Union Rehab Mortgage or new 3/2 ARM; 30/10 yes high-balance loan
detached Investor (investor) within loan limits value
construction Balloon, LTVs 90%
95% LTV with MI,
renovation 5% (SFR), 10% Renovation max.
Fannie Mae attached or 15 & 30 yr fixed, 90% LTV (2nd as completed
Green Mortgage NW or new (2nd home), 15% yes is 50% of the "as $417,000 (SFR)
HomeStyle Loan detached 5/1 7/1 ARM home), 85% value
construction investor completed" value
95% LTV with MI,
renovation Renovation max.
Fannie Mae attached or 90% LTV (2nd 5% (SFR), 10% as completed
or new 15 & 30 yr fixed yes is 50% of the "as $417,000 (SFR)
HomeStyle Loan detached home), 85% (2nd home) value
construction completed" value
HomeStreet Bank Investor
Loan amounts
FHA 203(k) Renovation renovation attached or No max amount as completed
Purchase or 15 & 30 yr fixed 96.5% LTV 3.5% yes within FHA county
Mortgage only detached within loan limits value
loan limits
Refinance an
Existing Home 15, 20 & 30 yr No max amount Loan amounts
renovation attached or as completed
and Build NW Mortgage Group FHA 203(k) Renovation fixed; 5/1, 7/1, & 96.5% LTV 3.5% yes within FHA county within FHA county
only detached value
10/1 ARMs loan limits loan limits
an ADU
renovation 95% LTV with MI, Renovation max.
Fannie Mae attached or 5% (SFR), 15% as completed
or new 15 & 30 yr fixed 85% LTV (2nd yes is 50% of the "as $417,000 (SFR)
HomeStyle Loan detached (2nd home) value
construction home) completed" value
Prospect Mortgage
No max amount Loan amounts
FHA 203(k) Renovation renovation attached or 30 yr fixed or 5/1 as completed
96.5% LTV 3.5% yes within FHA county within FHA county
Mortgage only detached ARM value
loan limits loan limits
renovation 95% LTV with MI, Renovation max.
Fannie Mae attached or 5% (SFR), 10% as completed
Umpqua Bank or new 15 & 30 yr fixed 90% LTV (2nd yes is 50% of the "as $417,000 (SFR)
HomeStyle Loan detached (2nd home) value
construction home) completed" value
"All-in-One" Custom attached or 15 & 30 yr fixed; 70% LTV; 50 % No max amount as completed
Washington Federal or new 30% , 50% (refi) yes Up to $1.5 mil.
Construction detached 5/1, 3/2 ARMs LTV (Refinance) within loan limits value
Construction Permit new attached or 15 & 30 yr fixed, 90% LTV Owner , No max amount as completed
HomeStreet Bank 10% yes Up to $1.5 mil.
Loan construction detached 5/1 7/1 ARM 80% Second within loan limits value
No max Loan amounts
Construct a All-in-One new attached or 30 yr fixed; 5/1, amount within within as completed
NW Mortgage Group 80% LTV 20% yes
New Home Construction construction detached 7/1, 10/1 ARM conventional conventional value
with an ADU county loan limits county loan limits
90 % LTV up to
new attached or 5/1, 7/1, 10/1 10% (up to 850K), No max amount as completed
Umpqua Bank Custom Construction 850K; 80%LTV up yes Up to $2 mil.
construction detached ARM 20% (850K-1.5mil) within loan limits value
to 1.5 mil.

Accessory Dwelling Strategies LLC,

100% LTV
EquityFlex & renovation
OnPoint Community attached or ($20,000 No max amount Determined by current value of
EquityFlex Fixed or new Up to 20 yr fixed not applicable maybe
Credit Union detached LOC) 80% LTV within loan limits equity value. main home
Portion Options construction
($100,000 LOC)
renovation Borrow up to
Home Equity Line of attached or Variable rate tied No max amount current value of
or new 85% LTV not applicable maybe approved credit
Use Your Credit detached to prime within loan limits main home
Trailhead Credit construction limit
Existing Home Union renovation Borrow up to 85%
Equity to Build attached or No max amount current value of
Home Equity Loan or new Up to 15 yr fixed 85% LTV not applicable maybe of the value of the
detached within loan limits main home
an ADU construction home
Home Equity Loan or renovation attached or 10 & 15 yr fixed; No max amount current value of
Umpqua Bank 80% LTV not applicable maybe $250,000
Line of Credit only detached 30 yr heloc within loan limits main home
renovation Borrow up to 85%
Unitus Community attached 7, 10, 15 year current value of
Home Equity Loan or new 100% LTV not applicable maybe Up to $100,000 of the value of the
Credit Union only terms main home
construction home

NOTES1) Renovation refers to the renovation of an existing structure to create an ADU, which includes basement, attic, and garage conversions. New construction means building an entirely new structure from the ground up. This includes pouring a new
foundation and erecting a new structure regardless of whether its attached or detached from the main home.2) An attached ADU is physically attached to the main home. A detached ADU is physically detached from the main home.3) Fees vary between
lenders and may include fees for; appraisal, loan origination, credit report, 3rd party charges, extra appraisal charges, title, notary, attorney, inspection, tax return, verification, government recording, and annual fees (for home equity loans/lines of credit only). This
list may not be inclusive of all potential fees.4) As completed value means the estimated assessed value of the main home plus future improvements (which in this case is often the construction of an ADU). The as completed value is often based on set of
blueprints detailing the improvements that will be made.
Common Types of Contracts Used in the Construction Industry

Lump Sum Contract

With this kind of contract the engineer and/or contractor agrees to do the a described and
specified project for a fixed price. Also named "Fixed Fee Contract". Often used in
engineering contracts.

A Fixed Fee or Lump Sum Contract is suitable if the scope and schedule of the project
are sufficiently defined to allow the consulting engineer to estimate project costs.

Unit Price Contract

This kind of contract is based on estimated quantities of items included in the project and
their unit prices. The final price of the project is dependent on the quantities needed to
carry out the work.

In general this contract is only suitable for construction and supplier projects where the
different types of items, but not their numbers, can be accurately identified in the contract

It is not unusual to combine a Unit Price Contract for parts of the project with a Lump
Sum Contract or other types of contracts.

Cost Plus Contract

A contract agreement wherein the purchaser agrees to pay the cost of all labor and
materials plus an amount for contractor overhead and profit (usually as a percentage of
the labor and material cost). The contracts may be specified as

Cost + Fixed Percentage Contract

Cost + Fixed Fee Contract
Cost + Fixed Fee with Guaranteed Maximum Price Contract
Cost + Fixed Fee with Bonus Contract
Cost + Fixed Fee with Guaranteed Maximum Price and Bonus Contract
Cost + Fixed Fee with Agreement for Sharing Any Cost Savings Contract

This types of contracts are favored where the scope of the work is indeterminate or highly
uncertain and the kinds of labor, material and equipment needed are also uncertain.
Under this arrangement complete records of all time and materials spent by the contractor
on the work must be maintained.

Cost + Fixed Percentage Contract

Compensation is based on a percentage of the cost.

26 Accessory Dwelling Strategies LLC,

Cost + Fixed Fee Contract

Compensation is based on a fixed sum independent the final project cost. The customer
agrees to reimburse the contractor's actual costs, regardless of amount, and in addition
pay a negotiated fee independent of the amount of the actual costs.

Cost + Fixed Fee with Guaranteed Maximum Price Contract

Compensation is based on a fixed sum of money. The total project cost will not exceed an
agreed upper limit.

Cost + Fixed Fee with Bonus Contract

Compensation is based on a fixed sum of money. A bonus is given if the project finish
below budget, ahead of schedule etc.

Cost + Fixed Fee with Guaranteed Maximum Price and Bonus Contract

Compensation is based on a fixed sum of money. The total project cost will not exceed an
agreed upper limit and a bonus is given if the project is finished below budget, ahead of
schedule etc.

Cost + Fixed Fee with Agreement for Sharing Any Cost Savings Contract

Compensation is based on a fixed sum of money. Any cost savings are shared with the
buyer and the contractor.

Incentive Contracts

Compensation is based on the engineering and/or contracting performance according an

agreed target - budget, schedule and/or quality.

The two basic categories of incentive contracts are

Fixed Price Incentive Contracts

Cost Reimbursement Incentive Contracts

Fixed Price Incentive Contracts are preferred when contract costs and performance
requirements are reasonably certain.

Cost Reimbursement Contract provides the initially negotiated fee to be adjusted later by
a formula based on the relationship of total allowable costs to total target costs. This type
of contract specifies a target cost, a target fee, minimum and maximum fees, and a fee
adjustment formula. After project performance, the fee payable to the contractor is
determined in accordance with the formula.

27 Accessory Dwelling Strategies LLC,

A Practitioners Guide to Appraising ADUs

A Practitioners Guide to
Appraising ADUs
An accessory dwelling unit (ADU) is a small self-contained dwelling, typically with its
own entrance, cooking, and bathing facilities, that shares the site of a larger, single-unit
dwelling. ADUs may be attached, as in the case of a basement apartment, or detached,
as in the case of a backyard cottage. An ADU is not a separate property; it has the same
owner as the primary dwelling.

Because ADUs are an emerging type of residential development with unique legal uses,
real estate appraisers frequently misunderstand how to account for them. We
recommend you follow these four steps when appraising any property with an ADU.

Ensure ADU is legal and

1 confirm that main house +
2 Conduct the HBU.
ADU can be rented. Consider these questions: What are
market rents for the main home and
In the City of Portland and most parts
the ADU? What are the Gross Rent
of the Portland metropolitan
Multipliers (GRMs) for the area and
region, both the main home on the
property type? Does a consideration of
property and a legally created ADU on
rents for the main home and the ADU
the lot can be simultaneously
affect the test of "maximally
rented. In other words, the property
productive" for the property -- does it
owner does not need to live in either unit.
lead to a higher opinion of value
These legal, income- producing uses of
through the income approach?
the property with an ADU may affect
your opinion of the Highest and Best
Decide on which approaches
Use (HBU) of the property. If the ADU is
not in the City of Portland, then it is 3 to value will be developed in
important to check with the local the appraisal.
municipality to find out if both units can Based on the HBU, will the sales
be rented. Typically, owner comparison, cost, and income
occupancy requirements will be listed approaches be developed? The number
in the ADU section of a citys zoning of approaches being developed will
code. inform the reporting format.


4 Report the findings.
If only the main home or ADU can be
rented, but not both simultaneously, If all three approaches to value are
consider how to best develop the developed, then Fannie Mae form 1025
opinion of contributory value of the (the 2-4 unit form) may be the best way
to report your appraisal results because
ADU alone. Is income data available?
it provides a simpler income format
Is cost data available? What is the than Fannie Mae form 1004. If using
usability of the ADU's square footage form 1004, remember to check the
compared to the main home? "One with Accessory Unit" box in the
Improvements section, and add your
rent schedules to the report.

Updated May 2014

28 Accessory Dwelling Strategies LLC,
A Practitioners Guide to Appraising ADUs

ADU Configurations:
ADUs may be detached, as in the case of a backyard cottage (figure 1), or attached, as
in the case of a basement (figure 2), garage conversion (figure 3), garage conversion
above garage (figure 4), attic conversion (figure 5), or addition.

Figure 1 Figure 2 Figure 3

Figure 4 Figure 5 Figure 6

Real-World Appraisal Considerations:

Most single-unit residential appraisals do not involve the income approach to value.
Therefore, developing the HBU for an ADU property may result in a significantly more
complex appraisal. When receiving an order to appraise an ADU property, it may be
best to do a records search to determine if the ADU is legal. If it is, then the scope of
work for the assignment needs to be adjusted to resemble that of a duplex property.
For more information on how to value an ADU in the Portland area, please reference
Understanding and Appraising Properties with Accessory Dwelling Units in The
Appraisal Journal.

Tips for Homeowners:

Ask your lender to require an appraiser with knowledge of ADUs.
Talk with your lender about different lending guidelines for single-family
and income-producing properties.
Provide the appraiser with information about the ADU that could be
helpful in the appraisal process, including proof of the legality of the ADU,
rental agreements, and cost breakdowns for building the ADU.
Understand that the appraisal fee on a property with an ADU is likely to be
higher than a normal appraisal, and always remember to tell the appraiser
that there is an ADU on the property when he or she makes an
appointment to see your home.

Updated May 2014

29 Accessory Dwelling Strategies LLC,

ADU Building Resources October, 2016
Green building programs and incentives

For tax rebates on energy efficient appliances, visit Oregons Department of Energy
For local green building programs, certifications, and professionals, check out Earth
For energy rebate and incentive programs, check out Energy Trust of Oregon Contact ETO about NW Energy Star to find building verifiers
for your ADU or 1 8772830698.

Tiny House on Wheels Resources

Tiny house workshops and consulting and
Tiny house tours on selected Sundays

ADU Resources

For current ADU information, subscribe to

Personal project blog
ADU consulting, classes, tours etc

General Contractors and Design Professionals

List of 40+ ADU design and building professionals around Portland
List of 221 accredited building professionals
List of 80+ Energy Trust development and design professionals trade allies
But, dont forget to keep an eye out for the little guys one or two person design and
build teams without a website or even a business card (ask neighbors and look for
yard signs in the neighborhood, ask friends, colleagues, and family, and scour, Craigslist, Angie's List)

30 Accessory Dwelling Strategies LLC,