Accessory Dwelling Units at Portland Promise "smart growth"

The new City of Portland changes just put an Accessory Dwelling Unit (ADU) within the reach of most homeowners. On March 3, 2010, the Portland City Council waived the System Development Fee for ADUs for 3 years, subtracting up to $15,000 from the cost of developing an ADU. The Council also voted to increase the size limits to 800 square feet or 75% of the main structure. These policy changes have opened up a key window of opportunity for the creation of ADUs in Portland that local homebuilders say brings the promise of a new “smart growth” push just when the city’s economy needs it most.

ADUs, also called “granny flats” or “backyard cottages,” are separate, compact spaces, complete with bed, bathroom, kitchen, and entryway, that provide a second home in a residential property.

History of ADU politics in Portland

Before World War II, accessory dwelling units were a common fixture of American neighborhoods. They were easily integrated into existing communities, provided affordable housing options for young and old, and made intergenerational living easier for families.

But after World War II, national patterns of urban development shifted toward low-density sprawl, and new zoning rules emerged that segregated land uses and housing types. During this period, ADUs fell out of favor and were, in fact, banned in most urban areas across the country.

After several decades of sprawl, accompanied by urban blight, car dependency, and loss of green space, communities across the country began to advocate for smarter growth. The City of Portland became an early leader in this movement and was one of the first to re-allow ADU development. But it wasn’t until 1998 that the City began promoting ADUs by relaxing the minimum area requirements; eliminating owner occupancy requirements; and allow ADUs in most residential areas.

Despite this progress, the onerous maximum SF requirements and system development charges (SDC) of up to $15,000 remained. With an average ADU construction cost of $75,000, these SDCs and square footage restrictions caused most consumers to abandon ADU projects altogether or modify projects to avoid ADU designation and permits.

Thus, the many “smart growth” benefits of the ADU development, each firmly aligned with the city’s Portland Plan, have largely gone unrealized. These missed opportunities include:

  1. Increase the supply of affordable housing in a way that blends easily into existing neighborhoods;
  2. Support the creation of a compact urban form that supports walking, transit, and vibrant neighborhoods;
  3. Provide an independent living option for the elderly/disabled that promotes intergenerational living;
  4. Generate additional rental income for landlords and tax base for the City;
  5. Provide increased residential development without major new infrastructure.

Key obstacles removed

In 2008, the City began a review of its zoning codes and regulations that govern sustainable building technologies and forms. The effort, dubbed RICAP5 (Regulatory Improvement Code Amendment Package 5), was guided by a Citizens Advisory Committee of key stakeholders that recommended removing regulatory hurdles to ADU development.

The committee’s work met with considerable success. On March 3, 2010, the Portland City Council eliminated all SDCs for ADUs. Shortly thereafter, the Council increased the maximum size restrictions to 800 square feet or 75% of the main structure, whichever is less. In the words of Mayor Sam Adams: “This couldn’t come at a better time, given the significant challenges facing builders and the construction industry, and in terms of our community sustainability goals.”

The last ADU boom was during the Great Depression. Now, according to local builders and lawmakers, the development of ADUs could help homeowners and the local economy pull themselves out of the Great Recession. But the window of opportunity is not open forever; the relaxation of the City’s ADU development regulations ends June 30, 2013.

Potential Benefits of ADU Projects for Property Owners and the Community

ADUs promise to benefit homeowners and the community by:

  1. Local and sustainable drivers of neighborhood prosperity and vitality;
  2. Homes that significantly improve the value and marketability of properties;
  3. Economic projects with high built value and return on investment (ROI);
  4. “Plug-And-Play”, easy developments.

Many in the real estate and homebuilding community see the ADU development as a boon to the future of Portugal. “Is he people that make Portland interesting: young entrepreneurs bringing business to the city and life to the sidewalks,” says local broker Kama Dersham. “The ADUs are modern and affordable for these folks and will help keep Portland vibrant and viable.”

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