I love my in-laws but I don’t particularly want to live with them. That said, there are certain life events that might necessitate that later on. What would we do? Where would we put them? Maybe an ADU would be the answer. An accessory dwelling can be internal to the main house, attached or detached. Before going any further it is important to note that each jurisdiction has different rules and regulations so check with your government entities before getting deep into your project. For this post, we’re going to use current City of Portland regulations. Most of this post is based on the continuing education class taught by Kathy at DMS Architects and Darin Walding at Advanitis Credit Union. DMS has a resource website at www.ADUpdx.com.
The City of Portland restricts the maximum size of an ADU to 800SQFT and up to 75% of the main house. That means a 1000SQFT house could have a 750SQFT ADU. There are lot coverage restrictions, height and setback requirement and that’s why it is necessary to seek City and professional advice before getting too deep into your project. Jurisdictions also have different rules as to what determines an ADU. In Portland it is a second sink. In others it is the presence of a second stove. DMS provides the links to each jurisdiction’s ADU website.
Another consideration is the construction of an ADU is enough to trigger a tax assessment (pulling a permit to remodel in Portland triggers). That means that they have the ability to reassess the entire property so if you have a sweetheart deal now that may go away.
ADUs don’t come cheap. Advantis Credit Union has a Rehab Mortgage that is ideal for this part of the project. Its styled after a “construction loan.” where the Loan to Value is calculated on the predicted finished value, not current value. There are additional hoops to go through and there are more fees as the money for construction held in escrow and paid out in draws as work is completed. The expectation is that a contractor is doing the work, not the homeowner. They will go to 90% LTV on owner occupied and 75% on investment property.
ADUs aren’t going to be for everyone but it might be the best way to get additional space without moving.