MOVING FORWARD | Research suggests a boom in Accessory dwelling units is on the near horizon, but that requires a new generation of homeowners to jump on board. Here’s why they should.
On Aug. 1, the city of Portland’s Residential Infill Project, which allows for the construction of more housing types in formerly single-family zoned neighborhoods, went into effect. In January 2022, Oregon Senate Bill 458, which makes it easier for property owners to split their land into multiple lots, will do the same. In June 2022, Oregon House Bill 2001, which effectively eliminates single-family zoning in the state’s larger cities, will also go into effect. Taken together, these three changes clear a new path for Portland’s homeowners to tackle not just our housing shortage, but many other crises made worse by America’s overly regulated, constrictive and discriminatory housing market.
Portland has a housing crisis that is self-evident. Portland also has a growing climate crisis defined by wildfires and winter storms, and a transportation crisis taking the form of traffic congestion, unnecessary emissions and street user deaths. Lastly, Portland, like the rest of the United States, is experiencing a generational crisis as the housing traditions defining the second half of the 20th century simply no longer serve the needs of Americans today. If a new generation of homebuyers jumps on the opportunity, the housing landscape this trio of policies makes possible can help us win each of these fights.
Why Portland is poised for an ADU boom
While the Residential Infill Project (RIP) allows for many new types of housing to be built across the city — ranging from Accessory Dwelling Units (ADU) to sixplexes — research by the Sightline Institute has found the cost of demolishing an old structure to build something like a duplex doesn’t balance out in most Portland neighborhoods. The rent price needed to cover the cost of demolition and construction would be well above the current market rate (one example given is paying $4,543 to live in a duplex in Montavilla. Imagine that).
Put simply: rents will have to jump substantially before we see a wave of developers tearing down any existing housing to build a new apartment complex in most neighborhoods.
ADU are different. Unlike other new housing options made possible by the RIP, ADU don’t require demolishing existing housing, so homeowners who build them would have an easier time making their money back without jacking up the rent.
“(ADU) can really work in a lot of different neighborhoods,” according to Sightline researcher Michael Andersen. “There is a lot of East Moreland that has a big backyard that could have two ADU, and those would be the cheapest newly built homes in all of East Moreland. And it costs essentially the same to build them there as it would to build them in the Centennial neighborhood.”
While there are still a fair number of construction and design requirements for each structure, the RIP also allows several types of ADU, including garage and attic conversions, new permanent structures and homes on wheels. Andersen describes the unique advantage of a variety of ADU filling in underutilized space as allowing cities to “grow in” as opposed to out (suburban sprawl) or up (building apartments on top of what used to be a single-family home).
According to Andersen’s research, an ADU with two 800 square-foot units — “essentially a backyard duplex” — would become economically viable with a rent of $1,760 per month, per unit. These units would be slightly larger than the average apartment in Portland and about the same price as the average rental in Arbor Lodge. Unlike apartment blocks, many ADU would also be able to feature yard access as an amenity. Perhaps the most astounding finding, however, is a home on wheels hooked up to plumbing and electricity — which is also allowed by the RIP — could be rented anywhere in the city for as low as $464 per month.
It is hard to imagine many Portlanders choosing to live in a home on wheels even if it was parked in a buddy’s spacious backyard in one of the city’s most walkable districts — at least that would be the case back in 2010. But two big differences today are that millennials, America’s largest and second-most indebted generation (after Generation X), are trying to buy homes en masse in Portland, and they are buying them at inflated prices caused by the shortage of housing.
With an enormous incentive to find passive sources of income to pay off student loans and mortgages and newfound freedom to get more out of the land they just spent a fortune on, it is not hard to imagine many new homeowners finding ways to make what would have seemed like an unthinkable housing situation for many Portlanders a decade ago comfortable and even desirable.
What an ADU can do for you and your neighborhood
If you are a homeowner, the most obvious advantages of adding an ADU to your lot is the opportunity to earn a reliable passive income while reducing stress on the existing housing stock. Investing $65,000 dollars in a trailer for your backyard can earn you almost $500 at the end of every month, which, in a country where the average monthly student loan payment hovers around $400, isn’t insignificant.
But just because you are making money to pay off your mortgage or student loans doesn’t mean the benefits of an ADU are a one-way street or limited to money in your pocket.
ADU could be an ideal housing arrangement for many city dwellers. For young people, including college students who have been priced out of the neighborhoods surrounding their campuses, an ADU could provide lower-cost housing in the central city. For senior residents and their adult children, ADU offer housing in which retired Portlanders can maintain a sense of freedom and independence while staying close to their family. Just because most Americans would rather not live in a dense apartment block doesn’t mean a detached single-family home should be the only alternative.
There should be more options, and now Portlanders have the chance to provide it themselves.
A critical aspect of the RIP is that it removes off-street parking requirements in residential zones, making Portland the fifth largest city in America to do so. This is good news, as it would be tough to justify giving up a chunk of your backyard to an ADU if you also had to clear room for a new parking space, but the real benefit of this newfound flexibility is that it makes it even easier for Portlanders to reevaluate their relationship with their cars and make decisions for themselves. Now homeowners can look at their garage and think to themselves, ‘do I want to maintain a structure for a vehicle costing $8,000/year to own and loses 20% of its value after its first year, or do I want to convert that space into something that helps me pay my mortgage and increase in value over time?’
If enough people make that calculation and Portland sees more garages and driveways converted into and/or replaced with new housing, then many residents may feel pressured to give up their cars in order to avoid endless hunts for parking every day. This does not have to be a terrible sacrifice. In exchange for your expensive vehicle, you get more affordable housing options in neighborhoods where cars aren’t a necessity.
As more homeowners choose to house people rather than cars, there will be greater incentive for local governments to improve transit and active infrastructure. The benefits of shifting priorities would be myriad, as more of the public right of way currently occupied by parked vehicles could be put to other uses, like pedestrian plazas, community gardens and playgrounds. At the city level, Portlanders get a more sustainable, safe and efficient (i.e. less congested) transportation system. At the local level, a street once dominated by the sounds of speeding cars and idling engines could be replaced by the sounds of birds chirping in berry bushes and children playing without fear.
Getting cars off the street doesn’t just result in a safer, more useful street. It also helps Portland tackle the most daunting and all-encompassing crisis: climate change. For years reducing transportation sector emissions, which represent 40% of Oregon’s total greenhouse gas emissions, has been the primary focus of many sustainability advocates. Any housing putting pressure on folks to give up their cars is welcome, but the past two summers tell us reducing emissions is just one battle in the fight against climate change: the other will be improving the city’s resilience to climate catastrophes.
Again, “growing in” with ADU can help us out. Growing in reduces pressure on Portland to grow out to provide needed housing. We live in a new era where wildfires are burning down the homes of thousands of Oregonians every year and winter storms are wreaking havoc on our roads and power grid. Avoiding the construction of traditional low-density single-family suburbs means fewer roads, bridges, power lines and other infrastructure local governments are responsible for maintaining. ADU will be even more useful when the Cascadia Event earthquake finally strikes the region, as the younger structures could become vital emergency shelters after our city’s older homes are shaken off their foundations and made uninhabitable. Growing in can even make deadly heatwaves more bearable and less costly. Growing in reduces the need for new asphalt streets, which contribute to the heat island effect, and cooling 800 square foot ADU with an AC unit is much cheaper than doing the same for a house twice that size.
The economic, housing and climate resiliency benefits of ADU may be enough for many homeowners to commit to investing in an ADU, but focusing entirely on the cost benefits in the context of catastrophes overlooks the human desire to live somewhere that improves our quality of life. According to a 2019 Gallup Poll, more than half of Americans aged 30-49 would prefer to live in the suburbs of a big city (24%) or rural areas (27%), while only 13% would pick a big city like Portland. Considering how poorly we have designed our big cities for raising kids, this is not entirely surprising. Far too much new housing construction in America’s cities falls into the categories of either bland, cookie-cutter single-family homes or sterile, monotonous towers — both often designed around nuclear families who are expected to sustain themselves in isolation.
Growing in offers Portlanders the chance to provide a vital good in a time of crisis, but it also provides a new generation of homeowners the freedom to choose how they want their communities to look and feel. Instead of an out-of-town developer hiring an architecture firm to design a block-long apartment complex, or a contractor focused on cathedral ceilings and walk-in closets throwing up a McMansion, residents will be making the artistic and functional decisions for many new ADU themselves.
We live in a new era where wildfires are burning down the homes of thousands of Oregonians every year and winter storms are wreaking havoc on our roads and power grid.
These homeowners may choose to build for three-generation families, extended families and chosen families. They may choose to focus on creating better communal spaces for their tenants. Instead of a suburban environment where every essential service needed by folks who are not middle-aged, able-bodied men — from childcare to senior living — has to be paid for, homeowners can choose to build out their lot to create a healthier sense of community for themselves and their new neighbors.
It isn’t hard to imagine college students or an elder parent finding joy in an ADU or duplex, but convincing new families with kids — a growing demographic as millennials age into parenting years — to move in is a different story. Yet Andersen’s own experience starting a family in an ADU suggests the perks can be game-changing for young parents.
Andersen lived with his partner in an ADU in a friend’s backyard for 5 years. This was where the couple raised their first child, and the homeowners across the yard were doing the same, allowing for the children to become best friends who grew up together. Along with child watching duties, both households shared a babysitter and both families biked to school together. Reminiscing over his cherished memories from that period of his life, Andersen cannot recommend raising a child in that setup more. “
Parenting is such a lonely experience in many ways,” Andersen said. “Having a couple of adults to share duties with and to build a relationship with, makes a huge, huge difference.”
Throughout the 20th century, American city planners and policies made life in the city unnecessarily difficult — often revealing systemic racism, misogyny and classism in the process. Many of these planners and policymakers were reacting to a period of unprecedented economic expansion and demand among white homebuyers for a new kind of segregated community in the suburbs following the successes of the civil rights movement. The needs and ideals of the 21st century are different. We need to build more resilient, livable cities with housing options that make it easier to cut down our emissions, raise our families and provide everyone a place to call home.
The city of Portland and the state of Oregon have just opened the door for the new generation of homeowners to help alleviate this city of some of its toughest problems, but it is up to them to seize the moment.
Henry L. Miller has a master’s degree in urban and regional planning from Portland State University and a bachelor’s degree in literary studies: journalism from Eugene Lang College. He has worked as a journalist since 2013, covering transportation planning since 2018. He also co-hosted the “Small Town America” podcast and co-wrote a preparedness guidebook for young Portlanders.
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