Page 43 - Green Builder Magazine May-June 2019 Issue

CREDIT: ACCESSORYDWELLINGS.ORG

The big time. A believer in practicing what he preaches, Kol Peterson built an 800-square-foot Accessory Dwelling Unit that he and his wife, Deb, have
lived in since 2011.

An Accessory to Knowledge

Despite regulatory obstacles, there’s a bright future ahead for ADUs.

BY KOL PETERSON lack of sufficient comparable sales of properties with ADUs,
CCESSORY DWELLING UNITS (ADUs) are a hot and the fact that appraisers have misunderstood what ADUs
topic in many areas of the country these days. are and how they could be rented out.
Homeowner interest and demand to build these Tracking the many moving parts of this incredibly
A types of small infill units on their residential compelling but extremely dynamic housing movement is
properties is exceeded only by the market thirst for this type tricky. To actually assist customers in developing ADUs on
of housing. their properties, professionals need to be up to speed on the
But, major obstacles remain to ADU development, which many overlapping elements of ADU development, including
is why so few of them are actually built. Regulations make understanding ADU structural forms, how to design small
this form of development unappealing, challenging or spaces well, the costs of development, and the mechanisms
impossible. From onerous off-street parking requirements, to involved in financing them. Meanwhile, each homeowner must
discriminatory owner occupancy requirements, ADUs are treated like a derelict become a land developer.
of housing options within common zoning codes throughout the country. Being involved as an ADU practitioner effectively means that you almost
These regulatory barriers are why most jurisdictions that claim to allow have to become an ADU activist and evangelist. So many barriers and
ADUs actually have fewer than 10 of them ever built. In fact, only four U.S. challenges remain to getting this housing form to take off. Yet, when one
jurisdictions have more than 1,000 ADUs: Portland, Ore., Los Angeles, Austin, accounts for the small scale size of the housing units, as well as the location
Texas, and Seattle. Meanwhile, there are tens of millions of informal (read: non- efficiency of where they are built, ADUs hold the promise of being among the
permitted) ADUs throughout the United States, proving that there’s clearly a greenest form of housing development opportunity.
strong market for them. A robust market for ADUs is an inevitable outcome of how residential
Even where ADU regulations are decent, and the correct real estate market neighborhoods in increasingly tight, coastal, housing markets will have to
conditions exist, ADUs have proven to be very expensive to build. Financing evolve to still be demographically relevant to shrinking household sizes and
ADUs has plagued their potential proliferation. But 2019 is shaping up to be increasing demand to live in walkable areas.
the year of ADU financing. If you are interested in making ADUs a bigger part of your business model as
In West Coast states, where ADUs are starting to be developed in greater a builder, designer, lender, realtor, appraiser, developer or investor, I invite you to
numbers due to state legislative approaches, local credit unions and local consider attending Accessory Dwelling Academy in Portland, Ore. on June 21.
banks are creating ADU construction and renovation loan programs. These The Academy is the fast track to becoming an ADU practitioner, advocate
open the doors for homeowners to build ADUs using the future value as a and leader. Learn more and register here: https://accessorydwellings.org/
basis for the loan. academy.
Construction loan financing hinges on fair ADU appraisals which are a chicken
and egg problem. Appraisers have historically low-balled the contributory Kol Peterson is an ADU developer, dweller and consultant based in Portland, Ore. He is
value of ADUs; at times, ADUs have actually been appraised as having less author of Backdoor Revolution, the Definitive Guide to ADU Development, and is owner
contributory value than a comparable-sized home addition. This is due to the of Caravan—The Tiny House Hotel, the world’s first tiny house inn.

www.greenbuildermedia.com May/June 2019 GREEN BUILDER 41

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