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Granny flats flourish after fee waiver

A local tiny-home industry sprouts in city of Portland


by: PAMPLIN MEDIA GROUP: JONATHAN HOUSE - Visitors learn about the making of the Peterson Backyard Cottage during last month's Build it Green! tour. The tour highlighted eight small Accessory Dwelling Units such as this one in Northeast Portland. Raynice Pawlowski doesn’t have room to throw dinner parties in her tiny house in Northeast Portland’s Cully neighborhood.

But that’s about the only thing she misses living in the cozy 325-square-foot home built alongside her sister and brother-in law’s house. 

“For one person, how much space do you need?” Pawlowski asks, while showing off her home during last month’s Build it Green! tour organized by Portland’s Bureau of Planning and Sustainability.

Small dwelling units built in basements, garages or next to existing homes have been permitted since 1998 on most Portland residential lots to encourage infill development and lifestyles with a lighter environmental impact. They’re known as granny flats, mother-in-law apartments or the more formal Accessory Dwelling Units.

But few Portlanders built ADUs — at least legally — until 2010, when the city raised the maximum unit size to 800 square feet and waived system development charges for three years. The development fee waiver shaved $7,000 to $15,000 off the price of a new ADU, which can cost less than $20,000 for a basic garage or basement conversion, and up to $130,000 or more for stylish new construction.

by: PAMPLIN MEDIA GROUP: JONATHAN HOUSE - The Peterson Backyard Cottage has nearly 800 square feet of space. A three-year city waiver of development fees for building Accessory Dwelling Units expires next June. Since the fee waiver and new size limit took effect in April 15, 2010, a new tiny-home industry has taken root in Portland.

Homeowners and builders have taken out 256 permits to build ADUs, says Ross Caron, spokesman for the Portland Bureau of Development Services. That’s equal to one-sixth of all single-family building permits issued since then.

Some of the permits were for older ADUs built under the radar by owners trying to avoid city building inspections and stiff development fees. But getting those units inspected and up to city code was one of the goals of the 2010 changes, says Eli Spevak, a green builder who lobbied for those changes. What’s clear, Spevak notes, is that ADU construction “jumped at the same time as the rest of the market plummeted.” 

With the fee waiver expiring next June 30, Portlanders considering a new ADU have less than nine months to take advantage. That should be enough time to finalize designs, arrange financing and secure a building permit.

With the looming deadline in mind, this year’s Build it Green! tour featured eight different ADUs, including the one where Pawlowski lives.

Living simply

When she moved here from Chicago three years ago, Pawlowski ditched her big-screen TV, and now watches a smaller unit placed atop her dining-room table, where she also keeps her computer.

“I gave a lot to Goodwill,” she says. “I continue to.”

Her modest living room doubles as a dining room, with enough space for a small recliner and a couple of chairs around the dining table. Her bathroom lacks space for a bathtub but has a shower.

Her bedroom is large enough for a queen-sized Murphy bed, which flips up to reveal a table suitable for a work or study space. She stores her winter clothes under the bed. A French door provides plenty of natural light and leads out to the garden.

A high ceiling makes the unit feel more roomy, and provides extra storage space above the bathroom. Three small wall heaters are all it takes to take the chill out during the winter, Pawlowski says. 

People visiting often remark how it seems much larger than 325 square feet. 

“This is just a charming little home,” gushed Melanie Wilson while visiting during the Build it Green! tour.

Walt Quade, who designed and built the 325-square-foot cottage occupied by his sister-in-law, says he can build more just like it for $40,000, plus the costs of a foundation and utility hookups.

He recently scored a deal to build a second one near Portland’s trendy Hawthorne Boulevard for about $45,000, which includes the foundation and utility hook-ups. The woman ordering the unit expects to rent it out for as much as $100 a night via the Airbnb web-based service, Quade says.

Some people build ADUs as rental units, others to have elderly parents or other family nearby. Some homeowners envision moving into their ADUs, and renting out the main house, when they are empty nesters and need less space.

Not every ADU is as cheap or small as Quade’s.

Sue Firpo spent $95,000 out-of-pocket on her 500-square-foot ADU in Northeast Portland, though that doesn’t count her labor as a designer and general contractor. She listed it for rent at $1,075 a month the night before the Build it Green! tour, and several prospective renters stopped by during the tour.

Owners of the 480-square-foot Master-Draper backyard cottage in Southeast Portland, a stylish two-story garage

converted by Portland’s Hammer and Hand, spent $130,000 on their project. That

included about $30,000 to relocate the main home’s electrical service entry.

Environmental benefits

Regardless of their size, ADUs are generally more environmentally friendly than a new home built in a traditional subdivision. They require no new land, less building materials and energy usage. They help Portland and the metro area meet population growth needs without developing farm land. Putting those residents in existing neighborhoods reduces sprawl and vehicle miles traveled, easing road congestion.

Quade says the new ADUs built since the fee waiver are just the beginning. People are “starting to come around” to the idea of living in smaller spaces, he says, some by economic necessity and some to save resources. But it takes time to change people’s thinking and willingness to live with less belongings, he says.

Quade would like the Portland City Council to extend the systems development charge waiver before it expires. He hopes to establish a small “factory,” building units just like his for use anywhere in the state.

Spevak, who specializes in smaller infill developments, says the increase in ADUs has been well-received in Portland, in contrast to neighborhoods where residents openly oppose “skinny homes” or huge McMansions that dominate lots.

ADUs are “discreet by definition,” Spevak says. “They’re not the kind of things neighbors get upset about.”

Though he’d welcome a move by the City Council to extend the fee waiver, Spevak understands there are concerns among the city parks, water, sewer and transportation bureaus about lost revenue from new construction.

Spevak suggests the city adopt development charges based on a home’s square footage. Before the fee waiver, the city levied the same development charges for a 3,000-square-foot home and a 500-square-foot ADU.

Mayor Sam Adams and City Commissioner Randy Leonard, who championed the fee waiver, won’t be on the City Council when it expires. Commissioner Nick Fish, who will be on next year’s council, notes that the city’s policy is to have new development “pay for itself,” and not burden the rest of the city to cover the costs of new public facilities needed. However, the benefits from the fee waiver are “pretty clear,” Fish says. “We’re seeing more ADUs built to code.

“I’m inclined to continue this program.”