ADU

Less Is More 2016 Wrap Up

our Less is More students made us a card entitled Dave visits Lina (my co-instructor Dave is as crazy about bikes and little houses as I am!) It was great fun Kicking Off 2016 with Small Home Design by teaching Less Is More at Yestermorrow. Monday and Tuesday we went on field trips to small houses in the Mad River Valley and Montpelier. We got to see five little houses this year, ranging in size from about 120 square feet to 1700 square feet. All five of these houses were owner-built, which was neat because we had the opportunity to talk to the homeowners about their challenges and successes. I had been to each of these small homes before, but I learn something new each time I visit, so that was great!

On Monday, Tuesday, and Wednesday Dave and I presented slideshows to share building basics and design tricks for small spaces. We asked the students what else they wanted to learn and ended up doing a crash course in building science, a presentation on toilet options, considerations for construction and finish materials, and sharing net zero energy information. We also introduced design exercises and drafting techniques.

One of our activities was designing a tiny house together by taping it out on the floor. I was impressed by how many different considerations came up as the students deliberated the merits of putting the door in one location or another and selecting a roof style. They were excellent at weighing their options and thinking things through. It was fun to see students design exercises morph into their individual projects as their understanding and design skills evolved. (Photos forthcoming.)

Card from Less Is More

On Thursday the students worked away the day designing their own small home projects, ranging in scale from a 200 SF tiny house on wheels to a 1800 ski house that can sleep 12. They presented their work on Friday to the class and our jurors, Paul Hanke and Kathy Meyer.

Other projects included:

  • a small home with a movement studio for dance and aikido
  • a little house inspired by medieval timber frame construction
  • a Texan live-work space with a double roof for shading
  • a small lakehouse to retire to
  • a cabin in the woods with an impressive roof
  • a round house with pop-outs
  • a multi-generational home with a turret suite

It was fun to see students design exercises morph into their individual projects as their understanding and design skills evolved. And, of course, it was great to be back in Vermont and at Yestermorrow. This was my eleventh trip out there and it looks like I may have good reason to go back again this summer to help out with a Build Blitz. One of the students in the class is excited to build a tiny house on wheels and several other students are eager to help out. Stay tuned for more about that possibility!

Meanwhile, I’m scheming my next tiny house design workshop, which will be in Asheville, NC right after the Tiny House Conference. If you’re noodling through your tiny house design, mark your calendar for April 3-8th and Contact Me to be added to the list for more information!

The Triple Whammy of ADU Financials (And Why It Might Make Sense to Create an ADU Anyway)

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Joan Grimm & Rita Haberman carved out an under-used bedroom and bath to make a studio apartment in their home As you can see from the ADU Case Studies, many homeowners recognize the social, environmental, and financial value of creating an ADU on their property. However, our financial system hasn’t quite caught up with the trend. As I talked with more than 80 ADU owners and professionals for the ADU Case Studies Project, I came to learn that there’s a triple whammy when it comes to ADU financials.

Here’s how it works:

#1 – You try to get a loan to build an ADU but the bank is wary, so you have to scrounge up at least part of the money some other way.

#2 – You build your ADU and it does indeed add value to your property (yay!) which means your taxes go up (maybe a lot!)

#3 – You are ready to sell your house with an ADU and you’ve accepted an offer but the appraiser isn’t familiar with ADUs and values your property at way less than the market rate.

Let’s break it down. Here’s what the worst case scenario might look like:

You’ve read up on How to Buy or Sell a Property with An ADU (or ADU Potential). You’ve found a great property and you’ve built your team of ADU Professionals. You’re ready to start building that ADU of your dreams, so you go to the bank.

#1 – Getting Financing

“Everyone agreed ADUs were a great idea, but none of the banking industries got on board for years. We were abandoned by financing. Banks are always fair-weather friends.” –Sam Hagerman

Hammer & Hand has been building (and advocating for) ADUs for several years - here is one of the ADUs profiled in the Hammer & Hand ADU Profiles

The bank is wary to loan on a project that doesn’t have good collateral. They might say ‘You’re just talking about finishing out the basement, right? Why is it going to cost $100,000?’ So it’s tricky for you to get a construction loan. After all, you’re not a known quantity. Sure, you’re good about paying your bills each month, but you’re not a developer. You’ve never built a house before so you don’t have a track record. How are they to know that you’ll be able to pull it off and that this ADU will really add value to your house? If you’re not able to get a loan for the full amount you need to construct your ADU, you’ll need to scrounge it up from somewhere else.

You might try one of these options:

Before you get too far along in your ADU dream, be sure you have a good plan to fund it! Before you buy a property with an ADU (or ADU potential), be sure the appraiser and loan officer have A Practitioner’s Guide to Appraising ADUs. Also make sure you and your realtor have reviewed How to Buy or Sell a Property with an ADU.

#2 – Paying Property Taxes

When Jane Doe built her little ADU her taxes jumped considerably

Even though the bank wasn’t sure your garage conversion would add value to your property, now you’ve added a new dwelling to your property and the value has indeed gone up. You might be able to have your property reappraised. And when you do you might find that it’s gone up quite a bit as Caleb & Tori Bruce and Bob & Adrienne Stacey did. At this point you might want to turn to your bank and say, “See, toldja so!” You might decide to refinance.

But then the tax assessors come by and it turns out they like what you’ve done with the place, too. So your property taxes go up. Even before Multonomah County’s Re-MAV, ADU owners such as Jane Doe were shocked by the increase in their property tax bills.

Before you build an ADU, be sure you understand the tax implications of creating a dwelling on your property, particularly if it’s detached and you live in Multnomah County where we have a wacky property tax system and a recent regulatory change that has tripled some people's taxes overnight.

#3 – Selling Your Home with An ADU

Dan Gray sold his house with an ADU last year - fortunately the buyers recognized the added value of this ADU over a garage!

You wrestled with the bank to get money to build your ADU and you paid the tax collector for all the years you owned your ADU. But you also made decent money renting your place out for the past 10 years. (After all, there are Options for ADU Owners: Rent One, Both, or Neither). Or maybe it was where your dad lived for his last decade. (And you've learned that ADUs Work for Multigenerational Families and discovered the hidden value of ADUs.) So it penciled out after all.

Now you’ve got a great opportunity somewhere else and you’ve decided you’re not going to Own Two, Rent Both or Own Two, Rent One. So it’s time to sell your place. You’ve got a great sellers agent and you've accepted a great market-rate offer.

The trouble is that the appraisal just came in and it’s way lower than you expected. It may be that the buyer's appraiser doesn’t recognize the value of your ADU. Since ADUs are illegal in many places, appraisers (especially from the big banks) may turn a blind eye and pretend they’re not there at all. Or she may still be using the comps method of evaluating the property. She might have evaluated your 2 bedroom, 1 bath house and 1 bedroom, 1 bath ADU and considered it a 3 bedroom, 2 bath house rather than 2 separate units. She compared that to other 3 bedroom houses in the neighborhood instead of calculating the rental income potential using the valuation method. (The valuation method is used for apartment buildings and other income-generating properties and it’s preferred over the comp method for evaluating ADUs.) So now you're having trouble selling your place because your buyers aren't able to get their bank to finance your property with an ADU. You don't want to take the appraised value, but your buyers can't afford to pay cash.

What a mess! So THAT is what I have come to call the Triple Whammy of ADU Financials.

So why in the world might it make sense to build an ADU anyway?

THIS is why it may all be worth it! Nancy Abens' mom loves her little ADU - in her daughter's backyard

The triple whammy described above is the worst-case scenario. If that was everyone’s experience there would probably be a lot fewer ADUs. However:

The financial industry is catching up with the trend, so it’s getting easier to get financing through a home equity line of credit, particularly with credit unions and community banks. So you may be able to finance your ADU with a home equity line of credit (HELOC) as Don Golden & Edith Casterline, Heidi Rose, Lesa Dixon-Gray, Joan Grimm & Rita Haberman, Kathleen Pequeno, Dennis & Stephanie Martin, John Baker, Michael Klepinger, Stephen Williams, Susan Moray did. However, you’ll learn as Susan Eliot did, that you need to live in your home for a while before you’ve built up enough equity to take some out for the ADU.

“ADU financing has only really become a reality because of economic change. Land prices have gone back up. There’s the advent of Airbnb. The writing on the wall is finally defined enough for the bankers to pay attention. If you build an ADU you can potentially raise the value by far more than the mortgage. When they know it will make sense, they’ll pour money into it.” –Sam Hagerman

In Portland you can take advantage of the waiver of System Development Charges. Additionally, Portland’s Accessory Structures Zoning Code Update Passed, which will potentially reduce costs associated with making your detached structure match the primary dwelling (such as matching the cedar shingles!)

More appraisers are becoming familiar with appraisal methods that take income potential into account. Before you buy or sell a property with an ADU, be sure the appraiser has A Practitioner’s Guide to Appraising ADUs. Also make sure you and your realtor have reviewed How to Buy or Sell a Property with an ADU.

Bob & Adrienne Stacey's grandkids come "camp" with them in their ADU

Meanwhile, in many cities market rate rents continue to hold strong and in some cities they’re increasing, so there are Options for ADU Owners: Rent One, Both, or Neither. Furthermore, ADUs Work for Multigenerational Families by providing both economic and emotional returns on investment.

So the best way to avoid the triple whammy of ADU financials is to do your due diligence and be well-educated about the financial implications of your decisions. Make a wise and informed decision that fits your lifestyle and current situation as well as your future plans.

Good luck!

Why Does Portland Have ALL the ADUs?

ADUs in Portland As you read through the ADU Case Studies on AccessoryDwellings.org, it may seem like ALL the ADUs in America are centered in the immediate vicinity of Voodoo Donuts. I’m here to assure you that’s not true. It’s really not about the donuts. It’s about the food carts, the craft beer, and the dream of the 1890s.

But in seriousness, there are indeed lots of ADUs in Portland, OR and several good reasons that Portland has become the epicenter of the small housing universe. There are also a couple reasons that Portland is over-represented on AccessoryDwellings.org. I’ll explain these in a moment.

But first, I want to make sure you know the ADUs are NOT all in Portland. Really. There are legal, permitted ADUs in cities all over the country. (And lots more practical ADUs that aren’t permitted, but that’s a different story.) Even within the ADU Case Studies Project, which is focused on ADUs in Oregon, there are several ADUs in Eugene, OR (see Bob & Jenny Harris, Robert Albano, Dennis & Stephanie Martin, and Caleb & Tori Bruce) and Ashland, OR (see Cheryl & Jim Levie and Dan Gray. We will continue to add information about ADUs to AccessoryDwellings.org so that over time it will be clear that the ADUs are not all in Portland.

So here’s why it seems like ALL the ADUs are in Portland:

  1. First, the creators of AccessoryDwellings.org - Kol Peterson, Eli Spevak, and Martin Brown - are Portland residents. They are also policy wonks and, of course, ADU owners, developers, consultants, and dwellers. These small space geeks write about what they know and love: ADUs and Portland. But, please be assured there’s a keen interest in continuing to include information about ADUs from across the country (and around the world). We Want Your Contributions to make the website representative of all the exciting projects happening everywhere!
  2. Second, the ADU Case Studies Project was funded by the Oregon Department of Environmental Quality to support building small as the best green building strategy. So the case studies written in 2014-2015 were all from Oregon. Now that the ADU Case Studies Project has wrapped up, you can contribute your own case study. If you’d like to submit your project, please contact us for the template and send it back to us with 5-10 high-quality photos of your ADU. Don’t be shy! Show off your ADU. We bet it’s awesome…
  3. Third, Portland is probably the best place in the country to build ADUs. Check out How Portland Became ADU-Friendly (And How Your City Can, Too). By reading through the posts on AccessoryDwellings.org, you can learn how Portland made it possible to create Discrete Density and learn Tangible Ways to Support Space-Efficient Housing, too.

Meanwhile, please look at the ADU Case Studies as a set of examples for how you, too, could create an awesome ADU. Even if the ADU regulations are different where you live, and even if it's not practical to bring a Portland-based ADU Professional on board for your project, there are great ideas here you can borrow. The ADU Case Studies Project includes all sorts of interesting information from how people created clever storage solutions to how to buy or sell a property with an ADU. So please enjoy exploring and share your ADU with us once it's built!

Small Home Weekend Wrap Up

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tiny house on Portland's Park Blocks during Build Small, Live Large Summit What an action-packed weekend it was for little houses!

On Friday I enjoyed visiting with other small home advocates and enthusiasts from all across the country at the Build Small, Live Large Summit. Alan Durning of the Sightline Institute and Dee Williams of Portland Alternative Dwellings laid the scene perfectly in their Keynote Address: The Power of Small. I especially appreciated that Alan’s point that small housing is so often illegal and his encouragement to think really BIG about how we can move forward housing options that are better for people, communities, and natural environments. It was hard to pick between the concurrent sessions, but I’m glad I went to the one about demographic shifts and housing trends because it was really interesting learning about how certain trends (towards smaller households, larger homes, longer lives, delayed marriage and childbearing, increased desire for walkability, etc.) are impacting housing choices.

The five panelists for the Space-Efficient Housing Policy Round Table (Eli Spevak, Jean-Pierre Veillet, Danell Norby, Liz Getty, and Rachel Ginis) did an excellent job describing the regulatory challenges they face in their daily work as they attempt to create small homes. They also presented clever solutions to address or work around these challenges and we left the audience with Tangible Ways You Can Support Space-Efficient Housing.

The Courtyard Clusters session with my heroes Ross Chapin, Mark Lakeman, and Eli Spevak was full of incredible ideas and images. I tried frantically (and failed miserably) to capture the poetry of how smart land use creates sustainable community. I also learned new words like “pre-legal” which I have already begun employing. (Thanks, Mark!)

The Best of Small Design Slam was fabulous, too. As he was ducking out at the end of Mark Lakeman’s presentation, Mayor Charlie Hales leaned over to me and said: “I know a vacancy coming up soon and that guy would be a good candidate to fill it!” I completely agree, Mayor Hales.

On Saturday Eli and I both lead Guided ADU Tours with 14 participants, showing them a great line-up of accessory dwellings. Many of the people in my group are considering creating an ADU on their own property so they had lots of questions about the ins and outs of the upcoming Accessory Structures Zoning Code Amendments and the impacts of Multnomah County’s new method for assessing property values on properties with detached ADUs. It poured down rain all day, so we ended up soaked, but morale remained high as we went to as many ADUs as we could fit in.

That evening we celebrated Simply Home Community’s 1 Year Anniversary with a party at our place. It’s always fun to get our friends together to mix and mingle. We hosted little parties in our tiny houses (at one point I had 17 people in The Lucky Penny!) as well as activities in the Big House. And, of course, we had singing and s’mores around the bonfire to wrap up the night.

Yesterday during our Simply Home Work Party we donned our rain coats and put our garden to bed. (Amazing how much we can get done quickly when working together!) Then Jake, Isha and I hunkered down at Bison Coffeehouse in the rainstorm to work through our Tiny House Considerations Lesson & Challenge for Week 2. (Since I've fallen in love with The Guy Next Door, I'm going through the same process of scheming a tiny house as the other participants in the E-Course!) We had a great conference call for Week 2 of the Tiny House Considerations E-Course and I look forward to sharing the Lesson and Challenge for Week 3 because it’s full of fun design exercises so participants can consider what’s most important to them. The bell rang for Community Dinner just as the conference call wrapped up, so we trooped inside for one of Lindsey’s fabulous meals. Our Heart Meeting after supper focused on capturing our Values in preparation for upcoming conversations about Vision and Mission.

If my weekends are going to be so full, I'm glad that they're full of great things and wonderful people! With a good breakfast in my belly (fried green tomatoes from yesterday’s garden harvest) I’m ready for a brand new week! Happy Monday, everyone!

Small Home Weekend in Portland

This weekend is jam-packed with small house events! Some folks are even referring to it as Tinypalooza! Build Small Live LargeThe Build Small, Live Large Summit on Friday, Nov 6th will take place at Portland State University. I'm moderating the Space Efficient Housing Policy Roundtable, which includes a great line-up of panelists. On Saturday and Sunday Dee Williams' company Portland Alternative Dwellings (PAD) is leading a Tiny House Basics Weekend Workshop.

OADU Tourn Saturday, I'll be leading a Guided ADU Tour, showing off 11 fabulous ADUs in Portland. I've lead Guided ADU Tours a couple times now and they're always a blast. This one should be, too, because the ADUs on this tour are beautiful and use lots of clever space-saving tips which I get to point out. Coordinating the ADU Case Studies Project the past two years has been a fabulous experience! I've learned a great deal about the challenges related to ADUs as well as the creative solutions homeowners, designers, and builders have developed. It will be fun to share these tips, tricks, and cautions with the group of people joining me for the tour. My guided tour is sold out, but you can still Register for the ADU Tour and take yourself on a self-guided tour. If you can't make it, keep reading the ADU Case Studies to learn about how other people have created second dwellings to create community, housing flexibility, and additional income.

TandemFinally, on Sunday Caravan - The Tiny House Hotel is hosting a Tiny House Tour and they've asked me to be there. It's always fun showing off Tandem, the tiny house I helped finish out for Orange Splot when I had my Summer Dream Job: Tiny House Design-Building.

I look forward to the chance to geek out with so many other small home lovers this weekend. Will you be there? If so, what are you most excited about?

Build Small, Live Large Summit on Friday, Nov 6th

Build Small Live LargeA couple years ago I participated in the Build Small, Live Large Summit, hosted at Portland State University. This Friday the event is happening again and it's sold out! If you didn't manage to snag a ticket you can still tour tiny houses in the Park Blocks. Meanwhile, for those of you who got one of the golden tickets, I'm excited to be serving as the moderator for the Space Efficient Housing Policy Roundtable. Here's a description:

Although demand is growing for small homes and creative residential developments, there are sometimes regulatory barriers to innovative, space-efficient housing options. Our panel of experts brings a wide range of experience with the very latest solutions in small housing policy, from affordable housing advocacy to regulations pertaining to tiny houses on wheels. This “fishbowl” style panel will acknowledge regulatory roadblocks to small housing, share how successful projects navigated those challenges, and brainstorm policy changes to help small housing options flourish.

Our session, which begins at 1 PM, will include five fabulous folks, with a wide variety of backgrounds, including affordable housing, development, real estate, and policy making.

Presenters: Liz Getty, Urban Nest Realty Rachel Ginis, Lilypad Homes Jean-Pierre Veillet, Siteworks Danell Norby, City of Vancouver, Washington Eli Spevak, Orange Splot

These are the folks I love geeking out with about the challenges we're facing in the regulatory landscape. I look forward to hearing their suggestions for policy changes that would support the creation of more small housing options. Please join us if you're coming to the summit!

Guided ADU (Bike) Tour: The Inside Scoop

Pedalpalooza Tiny House Tour - Billy UlmerLast year I had a blast leading a guided bike tour for Portland's Build Small, Live Large ADU Tour, so this year I'm doing it again! The ADU Tour sold out last year, so this year it's expanded to two days. This is one of the best chances in the nation to see the interior of a variety of accessory dwellings and to learn from the ADU owners, designers, and builders.

Guided ADU (Bike) Tour: The Inside Scoop

Saturday, May 30th OR Sunday, May 31st, 9:30AM-4pm

Tickets are $75 and available through Niche Consulting

Lina Menard will lead a special Guided ADU Tour during the Build Small, Live Large ADU Tour to share the inside scoop on the ADUs featured on the tour. Lina is the coordinator of the ADU Case Studies Project and a tiny house dweller and advocate. She will also share insights and information from the other 40+ case studies she has conducted. This guided tour option will cost $75 and will be capped at 20 people. The tour will be conducted by bike, but a carpool option will also be available. You can register for this option for Saturday or Sunday. This exclusive guided tour will go from 9:30am-4pm.

The Saturday, May 30th tour will feature ADUs in NE Portland, while the Sunday, May 31st tour will feature ADUs in SE Portland. Most of the ADUs are brand new to the tour this year so it will be fun to show them off. I've become familiar with most of the ADUs on the tour because I've been Coordinating the ADU Case Studies Project. I've had the chance to interview more than ADU owners about the challenges, highlights, and lessons learned through their ADU design and build process. I look forward to giving the inside scoop on each of the ADUs as well as sharing insights and information about the other ADUs in the Case Studies Project.

If you'd like to join us, please claim your ticket.

Less Is More Tours & Programming

2015-03-17 14.24.08We're about to begin our third day of Yestermorrow's Less is More class, which is focused on small home design. The first two days had a similar itinerary: small home tours in the morning, afternoon design lessons, and evening presentation and studio time. (Today the high is supposed to be 17 degrees, so it's probably just as well our tours have wrapped up!) In just two days we've had the chance to explore seven homes, ranging from 200 to 2000 square feet. And while the larger homes are certainly not tiny (and I wouldn't consider them small either), they did offer good ideas for clever storage, creative work-arounds, and matching layout to program. They also provided good fodder for last night's discussion about design concepts that make small spaces seem larger. We now have good examples to point to as we discuss the strategies we're using in our own small home designs. This group of students has been asking great questions and they do a wonderful job working together to understand the various considerations and trade-offs when designing a small space. I'm looking forward to seeing their designs evolve!

They've already begun exploring layouts both in our life-size mock up and on trace paper. Today we'll continue the process with elevations and sections.

Hello Again, Less Is More!

2015-03-15 20.12.56I'm back in snowy Vermont for more Yestermorrow goodness. I spent my weekend in the Design-Building a Successful Design-Build Business class, taught by Adam Cohen. He was a wealth of information and wisdom and I learned just as much from my classmates who were quick with questions and ideas. Last night we started up another round of Less Is More: Designing the Small or Tiny House. I'm honored to be teaching with Dave Cain who is a creative designer, a bicycle adventurer, and an all-around great guy!

Last night we kicked-off class with introductions, complete with inspirational imagery and then we launched into our first design project. The photos in the gallery are the result of that exercise. We have an action-packed week lined up, including tiny house tours, programming, intro to drafting, presentations, and lots of (but never enough) studio time. Final presentations will be all day on Friday and I'm already eager to see what this creative bunch will come up with!

Follow along this week on our adventures! Meanwhile, you can read about last year's class here: Welcome to Less Is More, Less Time, More Drafting, and Less Is More Presentations.