As housing costs in Portland, OR continue to escalate, while access to affordable housing redefines crisis levels, it is increasingly difficult for organizations to meet their housing driven missions.
Many Portland-area Community Development Corporations (CDCs) meet their housing access missions by developing multi-family housing projects or purchasing and renovating or constructing new single family homes. Their portfolios are effective in meeting their mission, but are ultimately hamstrung by a number of factors.
As your organization looks out 5, 10 or even 15 years, does your current redevelopment model eventually lack in housing diversity? Will your budget strain under the costs of deferred maintenance? Are you ultimately limited by the physical footprint of your CDC area? Will your tenants have the ability for their families to grow and change without being dislocated?
You’re surely familiar with the recent explosion of popularity that Accessory Dwelling Units (ADUs) have enjoyed in Portland and in many other cities. Last year alone, the City of Portland received more than 250 ADU permit applications. These are great ways to add new housing stock to land you already own. Many individuals have already asked the question "Why not build a small-scale house in your backyard?" Their parents could live there; renters could live there as they generate rental income; or they could live in the ADU themselves and rent the main house to a family.
Those are all great reasons to consider building an ADU, but how can your CDC benefit from the ADU craze? At Propel Studio, we believe there are 5 key ways your Portland, Oregon CDC can benefit:
1. Quickly and inexpensively expand your housing stock within the existing footprint of your CDC.
After a thorough analysis and inventory, we can help you identify the development opportunities that exist on the properties you already own. Imagine doubling your housing portfolio without incurring any land acquisition costs. Almost every property in a SIngle Family Zone within Portland can accommodate an ADU. Often the biggest hurdle to providing more housing is the costs involved in acquiring new land. In this scenario, we can build new housing opportunity and eliminate the hurdle of purchasing the land as it is already in your portfolio.
2. Expand your housing stock without displacing current/long-term residents.
Developing multi-family projects is an effective way to meet your housing access goals, but these projects tend to displace neighbors and sometimes lead to gentrification in the neighborhood. Imagine developing a significant increase in your housing stock without displacing a single family. Instead, you can keep families in their long-term homes and potentially allow for these families to grow or multi-generational living to happen on a single lot.
3. Diversify the product mix in your housing stock.
Many times, financing and market forces dictate that a CDC’s portfolio grows in a certain direction. Maybe you’re heavy on single family homes or maybe it’s been more feasible to develop multi-family projects lately due to funding available. What if you could introduce a product mix that not only diversified your housing portfolio but also diversified residents you’re able to serve? Accessory Dwelling Units can take a lot of forms and can offer a wide range in housing types. We can design two storey 2-bedroom units for young families, or single level versions that are fully ADA compliant for ageing-in-place. There is also the option to create smaller, more affordable studio apartments. These are just a few of the wide range in housing types that can be offered through this creative project type.
4. Leverage available financing vehicles to cover deferred maintenance costs.
It’s no secret that it’s easier for a CDC to get financing for new construction than it is to find a way to cover maintenance costs. Many organizations like yours struggle with deferred maintenance costs. What if building a fleet of new ADUs helped generate the funds to cover much-needed deferred maintenance projects? One of the things we have been interested in, is using ADUs as a means to generate funds that can further your mission. ADUs can be rented as affordable units to low-income residents, but they could also potentially be rented as market-rate apartments, bringing in much-needed revenue that can be used for deferred maintenance and other costs on your existing assets.
5. Leverage existing incentives to save on development costs.
You already know that development costs in Portland are high and prices for land and construction costs are rising. What if you took advantage of the City’s ADU incentives and saved as much as $10,000-$20,000 per ADU unit in development costs? Currently, the City of Portland is waiving the majority of SDC fees until July of 2018, and permitting detatched Accessory Dwelling Units can be as low at $4,000-$5,000. Compare that to the permitting costs of a new single family house and you can see that now is a perfect time to maximize the benefits of investing in these projects.
If your organization is looking to the future and thinking you can do more to provide better access to housing; if you’re thinking you can do more to support your neighborhood and it’s diversity, consider adding Accessory Dwelling Units to your properties in Single Family Housing zones.
ADUs in Portland, Oregon can currently help you quickly, efficiently and cost-effectively increase your housing portfolio. They can help you grow and diversify your housing stock without displacing your neighbors. They can even help you save money and solve the deferred maintenance crisis you may be facing.
If you’d like to know more about our experience with the benefits of ADU development, let us know. We’ll be glad to help.