How Accessory Dwelling Units Can Reduce Your Housing Shortage

Smaller housing units are all the rage in order to keep up with affordable housing demand. Learn more about how Portland, OR, is approaching this issue

What Happened?

Portland has made accessory and secondary dwellings available to residents seeking a home in high-demand neighborhoods suffering from a housing supply shortage. The smaller housing units offer efficient alternatives to standard homes for residents in need of less space.

The Goal

Only accounting for 3 percent of the city’s new dwellings, accessory units are very popular in the hot spots of Portland. Central neighborhoods throughout the city are redeveloping unused garages, backyards and cellars to enable small living spaces to be constructed and meet demand. The areas experiencing the highest demand for new housing options are reporting up to 15 percent of all new dwellings are accessory units.

According to a September 2013 survey of Portland demographic information, the number of ADU permits per year distributed to residents increased 400 percent between 2009 and 2013. Despite the rising popularity for accessory units, local banks are struggling to determine what financing structures should be used for the alternative housing. Portland eliminated a rule that required owners of ADUs to live on the same lot, while reducing the fees associated with adding an ADU to local property to support the movement.

Rise of the ADU

ADUs are sprouting up across the country. The living spaces must be 800 square feet or less to qualify as an ADU and consist of an entrance, bathroom and kitchen. Many ADUs do not offer residents with a place to park a car, but the majority of people living in the units do not own cars.

As more cities such as Portland are transitioning to a bike and pedestrian-friendly mentality, ADU living units fit nicely into development strategies. Many residents are interested in adding an ADU to their properties to make better use of space while generating income or housing a family member.  ADUs also arguable provide a housing unit somewhere to fill the gap between an apartment and a single-family home in terms of size and cost.

The U.S. Department of Housing and Urban Development categorizes accessory dwelling units into three types:

  • Interior: Located within the primary dwelling, built through conversion of existing space
  • Attached: Living spaces added onto the primary dwelling
  • Detached: Structurally separate from the primary dwelling

Many ADUs are built over a garage, attached to the back of a house or developed from a restructured basement.

The Perks

The HUD identified a variety of benefits attracting residents to ADUs:

  • The housing units increase affordable housing supply in areas of high demand to accommodate low and moderate-income residents
  • Families with an elderly or disabled member can house them nearby in an ADU without infringing on their independence
  • Young adults entering the workforce can attain affordable housing close to resources and employment
  • Property owners can generate another source of income by making better use of their space

Furthermore, ADUs can be integrated within surrounding architecture easily so as to minimally disrupt established neighborhoods or community character. ADUs can be connected to existing utilities from the primary dwelling, eliminating the cost of developing new infrastructure. In addition, cities will not have to deal with zoning changes that may alter neighborhoods while supporting the rising housing demand.

Housing for Change

Gov1 has followed a variety of unique housing initiatives that cater to residents with no cars, or offer alternatives such as corporate housing.

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