Those of you following this website know that for over a year (17 months, but who’s counting?) I’ve been trying to get our ADU project off the ground. We’ve won some major battles (land use adjustments) suffered some small setbacks (NIMBY neighbors) and learned a lot about urban development.

A few months ago the magazine Portland Spaces put out a brief article on the ADU “trend” (“trend” is an overstatement, but the article did make it seem as if ADUs were the next “big thing”) Anyway, one of the points made by the article was that the permit process is so expensive (at least $7500 for permits) that ADUs fees are nearly as expensive as building a “real” house.

Which segues to my main point – building an ADU in the Portland city limits is simply too difficult, time consuming, and expensive.

17 months ago I had a dream: show that yes, on a modest income, we could build a custom residence (albeit small) within the city core. Our model project would demonstrate how ordinary citizens could increase density without sacrificing quality of life. The project would show the benefits of shared spaces, savvy space planning, and smart architecture. And if that weren’t enough, our new building would show that a small footprint could support a living space and a home-based business. In short, the new building would be the fusion of economic self-sufficiency and small-footprint lifestyle.

Then came the sub-prime mortgage disaster. And the end of easy money. And the evaporation of the construction-to-perm financing programs. In short, the “home equity” era was over.

And with this has come the reality that building this sort of project isn’t really an endeavor to be tackled by those of modest income. You need cash – and lots of it – to get a building off the ground. Even if you’ve got a great track record and good income, the banks don’t want to talk to you unless you bring significant money to the table.

Which gets me back to the city and its zoning issue. I see several problems:

• The time and money involved in building an ADU, especially if it doesn’t fit within the standard guidelines, it prohibitive for all but the most determined individuals. I recently pulled the records for ADU permits and of the 74 permits on file between 2005-2006, 18 were canceled. It’s impossible to say why, but my guess is that the economics of the ADU just didn’t work out. UPDATE: I’ve obtained a list of permits from 2007-09 as well.
• Appraisers simply don’t know how to deal with ADUs. There are no standards and many appraisers make their best “guess.” Comps are difficult, if not impossible to find. In turn, this means that the ADU is often undervalued and the homeowner is unable to show enough value in the project to obtain a loan.
• Banks don’t know how to deal with ADUs. They speak the language of “multi family” “single family” and “duplexes.” ADUs don’t fit within any of these categories – they’re typically built on single family lots but can easily accommodate additional families or renters. Like duplexes, ADUs can generate income, but unlike duplexes, ADUs aren’t necessarily attached units. I can’t tell you how many banks simply refused to look at the project because it didn’t fit into a nice box.
• Unless you can fund the ADU construction out of pocket or with a home equity loan, the banks will want to hold the lien on the home in order to finance the ADU construction. What this means is that the fees/points/loan costs increase dramatically as the bank will want to combine the existing mortgage with the new construction. In addition to adding to the cost, this creates a situation where you need to “close” on the loan twice – once at the beginning of construction and again when the building is complete.

So, given all these issues, how could the city of Portland change the ADU program to encourage more buildings?

• Develop a program to help train appraisers in correctly valuating ADUs. Create a certification system so that homeowners can hire appraisers trained in evaluating ADUs. Make this list publicly available and share this with lenders.
• Partner with local and regional banks to establish formal lending programs for ADU developers. With this one step, the city could dramatically increase the ease with which ADUs are funded and developed
• Create an advisory system to help homeowners better understand the financial hurdles of construction.
• Educate architects about ADUs. Helps building designers understand the specifics of the program so they can more effectively help their clients navigate the system.
• Reduce Service Development Charges and permit fees to reflect the size of the ADU in relation to the main home. If the ADU is limited to 33% of the home’s size, then fees should be in alignment with this percentage as ADUs impose a much smaller demand on city services than full-sized homes.

These are just a few ideas. In 2003, the city of Portland published a study about the ADU program: The ADU Monitoring Project

Break out the champagne! As of July 12 we are officially approved to build our larger ADU. The even better news is that no one appealed the decision within the two week appeal period (July 12-July 26th). This means the decision is FINAL.

Below are a few of the documents from the approval letter. I will attach the full approval form if it becomes available in a PDF format.

Two requirements will need to be met as result of this process:

1) Maintain the hedge on the south side of the property.

2) Apply for a fire code exception (Fire Code Requirment). The fire department requires vehicle access within 150 feet of all sides of a structure. Since this is impossible with the current lot size, I will need to appeal this requirement and add sprinklers to the building. This will add to the cost – somewhere between $2-$3 per square ft. Here’s the appeal form. The contact person at the fire bureau is Dawn Krantz (503-823-3718).

Land Use Review Approval Elevations

Full Land Use Review Approval from City

Ironically, the neighbor who complained most vehemently is one who is himself a small-scale developer who has divided his lot and placed multiple buildings on the land. And, nimbyism has its price – nearly $1000 in design fees and a month delay.

Lessons learned:

1) Broaden the circle when approaching neighbors. Get as many on board before the city comment period. Also, it’s clear that the neighbor who objected had many incorrect assumptions about the building. I’ve since spoken with him and mostly ironed things out, but the damage is done. Fortunately, he didn’t appeal the city’s decision.

2) When talking to the city, get them to WRITE THINGS DOWN. Somewhere. Anywhere. When I began the process, they indicated I could probably get the 800 sq. ft. increase. However, later in the process, they said that they wanted the project to be closer to 700 sq. ft. If I had known this from the get-go, I would have saved a ton of time and money.

3) Shoot for the moon. Sadly, one of my take-aways from this process is that it’s more about the PERCEPTION of compromise than it is about true sacrifice. I reduced the size of the building, moved it off the property line, etc…but at the end of the day, these changes will have almost no impact on the overall building. This is why developers often ask for outrageous zoning adjustments – it allows them to “scale back” their plans, putting the designs where they wanted them all along.

4) Get it in writing. It would have been better if I could have provided written testimony and support from my neighbors who were in agreement with the project. In fact, it would have really helped to have the neighbor to the south on record – she supported the project then flipped once the nimby-neighbor riled her up.

Ok, now for the funny part: Here’s the most colorful of the letters: Gaile’s Letter

What this means: According to the letter, the city has 28 days to publish their decision. The letter gives neighbors 21 days (June 15th) to provide written comments on the project. The city must make a ruling by June 19th. UPDATE: due to design changes and neighbor complaints, the process was put on hold. The new date for their ruling is now July 12th.

Click on the image for a full copy of the city’s letter (4mb PDF)

Here’s a helpful document that shows the city’s timeline: Land Use Review Timeline (PDF)

On Tuesday, Suzanne came by the house this week to look at the property and discuss the process. She gave us kudos for a thorough presentation, and suggested that I go into ADU consulting.

Her two concerns were the permeable pathway (wanted to make sure it wasn’t a driveway) and that construction may damage the laurel hedge. I’m not particularly concerned about the laurels, since they seem to be nearly indestructible.

Suzanne says she’ll be mailing out public input notices later this week (the 31st) and that she’ll let me know if there are any objections from the neighbors. All in all, it was a very positive meeting and I look forward to working with her. She seems very approachable.

Final Proposal (PDF) – 4 megabyte file.

Land Use Application Checklist

Land Use Review Application

Adjustment Approval Criteria

In the next post I’ll upload my approval criteria and supporting documents.

• Building design didn’t present any big red flags. We can present the split-roof design, though there is no guarantee we won’t get a planner that requires a standard gable-roof design. She suggests that we apply with what we WANT, and make adjustments as necessary.
• The main concern among group members was the relationship of the secondary building to the small size of the primary residence. It would be “better” if the ADU were smaller.
• One suggestion was to expand the size of the main house to decrease the amount of adjustment needed. We discussed creating additional living space by converting the garage.
• The placement of the ADU may be problematic. One solution would be to push it closer to the main house.
• She said to make sure we were happy with whatever design we submitted – we’re effectively stuck with whatever we propose. This differs somewhat from what Patrick reported previously.
• The proposal was impressive.

At the end of the day, Marguerite said it’s a coin toss – we could get a planner who signs off on it or we could get a planner who objects to the size/scale relationship. It’s a very subjective decision. Neighbor input could play heavily into this decision.

I asked Marguerite about the review process and how flexible the planners are. For example, can we make “compromises” as part of the process in order to get approval? She says that yes, that’s part of it. We might, for instance, offer to move the ADU further from the property line to mitigate privacy issues. And, there’s always the appeal process as a last resort (though this is NOT something I’m eager to embark on).

From here, I see our next steps being:

• Contacting neighbors about the process. If possible, get their support. Possibly in writing.
• Developing elevations to submit to the city of Land Use Review.

Preliminary Land Use Review Proposal

I used a local printer (Rhino Digital) in Portland to print and bind the proposal. They did a great job and did it in almost no time. The meeting at the city went well. Marguerite had a few suggestions:

• Show setbacks on the new site map
• Make it more obvious that the adjacent property is a multi-dwelling zone. The idea here is to show that my property would be a “transition” or “buffer” lot between the higher density R2 zone, and the single-dwelling R7 zone.
• Change the language on the accessory unit. Eliminate the name “garage” from all the plans and proposals.

Several key points seemed to resonate with her regarding my proposal including:

• Lot abutting the R2 zone
• Lack of development in adjacent lots (no privacy issues)
• Existing Landscaping

I left the proposal with Marguerite – she’s going to share it with the planners who meet each Thursday morning. The hope is that they can provide feedback as to what’s missing or how I can improve the proposal. In particular, I’m hoping they will approve the “shed roof” design that Patrick worked up below.



If this design is too “modern”, then we have a fallback design (though I feel the shed-roof is vastly superior and mitigates the building scale much more effectively):



]]> http://www.shawnbusse.com/private/houseblog/preliminary-land-use-review-meeting/feed 0 http://www.shawnbusse.com/private/houseblog/site-plan http://www.shawnbusse.com/private/houseblog/site-plan#comments Thu, 08 Feb 2007 01:10:22 +0000 Shawn http://www.shawnbusse.com/private/houseblog/?p=98 Here’s two site plans – one with the ADU at the back, and sidewalk down the west side of the current house, the other with the current layout of the property. Click on either image to download a PDF of the property

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