The ADU Hour

[00:02:18] Kol Peterson: Welcome, Ethan, good morning. [00:02:22] Ethan Stuckmayer: Thanks for having me.[00:02:23] Kol Peterson: Yeah. I'm excited for this, I was bantering with Ethan before this and I was kinda thinking what is exactly is the professional experience that you need to have to do this job that nobody else in the country has ever done before?What an interesting position you've been put in. For people's benefit, could you describe kind of your particular role within DLCD as far as your relationship to House Bill 2001, which we will describe in a minute?[00:02:47] Ethan Stuckmayer: Yeah. So I'm the Senior Housing Planner at the Department of Land Conservation and evelopment, which is really state of Oregon's land use department.We regulate what are called the Statewide [00:03:00] Planning Goals, and there's 19 of them, one of those is Goal 10. Goal 10: Housing, which is my domain, I guess, and this is the area which we implement the intent and the purpose of Goal 10. House Bill 2001 in 2003 are two pieces of legislation that advance DLCD's work in housing.And prior to House Bill 2001 and 2003, really, the 2019 session DLCD did not have a housing team, which we do have now, which is really exciting.[00:03:30] Kol Peterson: Do other states have a Goal 10 equivalent that is like a statewide housing goal mandate or is that unique to the state of Oregon?[00:03:39] Ethan Stuckmayer: I don't think it's unique to the state of Oregon. What is unique about the state of Oregon is just the context within which that sits. The state of Oregon is one of the few growth management states, Washington, there's others, that have high preference on preserving forest and farm lands and regulating the development [00:04:00] within a certain geographic boundary, urban growth boundary or, or similar.So I know that the state of California has things like The Housing Element that their Housing Community Services Division at the state level manages. But from my understanding, the state of Oregon is, is really quite unique in that. [00:04:17] Kol Peterson: All right. So let's describe House Bill 2001 in two minutes for a random Planner in N ew Hampshire, who's never heard of it. What is House Bill 2001? [00:04:26] Ethan Stuckmayer: Sure, so House Bill 2001, really pretty simply end s exclusive single family zoning in big and medium sized cities and the state of Oregon. So as a requirement to House Bill 2001, cities must basically update their development codes to allow certain middle housing types, which I'll define in just a bit, but those need to be allowed in every residential zone that also allows for the development of a single family detached home.So, converting those lower densities zones into a little bit higher density zones. Cities are still [00:05:00] allowed to regulate the citing and design and the look and the feel of middle housing, as long as those standards don't cause what's called unreasonable cost and delay. So basically those cities can apply only standards that they might only apply to single family detached homes, previously, things like building height, setbacks, lot coverage, all of those standards can't place an undue burden on the development of middle housing. That's pretty short version of House Bill 2001.[00:05:25] Kol Peterson: And describe for us this term, middle housing you're using that term that most people have been familiar with was coined by Daniel Parolek, "Missing Middle"housing. What is it? Are those the same thing? Why, why are we using the term "middle housing"? [00:05:38] Ethan Stuckmayer: Yeah. So middle housing, for the state of Oregon is a well-defined term. It's a collection of missing middle housing types that Perolek talks about. For the Oregon context, there is five: duplexes, triplexes, quadplexes, townhomes, and cottage clusters. And the reason why Oregon's not using "missing middle" housing is because it's [00:06:00] a long-term policy.We're hoping that in 20, 50 years, we're not missing those middle housing types anymore. It's just called middle housing. It's just part of our housing continuum.[00:06:10] Kol Peterson: Now House Bill 2001, unfortunately did not capture ADUs within this middle housing definition, which has some weird administrative history that we don't need to go into, but can you describe what House Bill 2001 did for ADUs, explicitly? [00:06:26] Ethan Stuckmayer: Yeah, I think the beauty of House Bill 2001 is that it's got so many different layers. For ADUs House Bill 2001 followed up the previous bill that you were just talking about, Senate Bill 1051, that required cities to allow ADUS in conjunction with a single family detached home. And city could only subject those ADUs to what are called reasonable standards. So basically House Bill 2001, with some years of experience of implementing Senate Bill 1051, the legislature identified a couple standards that cities were using that were maybe more unreasonable than reasonable.So [00:07:00] basically House Bill 2001 clarified that off-street parking requirements and owner occupancy of either the primary or accessory dwelling were quote unquote unreasonable for ADUs specifically. Yeah. [00:07:11] Kol Peterson: Right. For those who are on the call, it's the opinion of many people, including myself, that owner occupancy and off-street parking requirements are the two most common largest poison pills for ADUs that you will see prominently throughout regulations across most of the country. If you look at cities that actually do allow ADUs, they are oftentimes have those provisions in effect, so this is a really good example of a very simple one line legislative effort that effectively changes the course of the potential for ADUs to happen. Not that not to say that they will happen in great numbers, but that they can now potentially happen in Oregon cities. So how many cities does House Bill 2001 impact in the state of Oregon? And what does the total population that House Bill 2001 effects compared to the [00:08:00] overall state policy? [00:08:02] Ethan Stuckmayer: Yeah. So House Bill 2001, applies to cities and counties, but cities outside of the Portland Metro with a population of 10,000 or greater, and then cities within the Portland Metro of 1000 or greater. And there's different thresholds within those broad categories, but in total that's 56 cities across the state and three metropolitan counties. And then there's quite a few cities who are just under those thresholds. There's maybe about five or six cities that are definitely coming online in the next couple of years, but that's pretty close to two and a half million people in the state of Oregon. In the whole state, that's about 60% of the population. [00:08:43] Kol Peterson: Yeah. So 60% of the population is captured by hospital 2001. Okay. You know, and, and that's we have, I guess it's a fairly small population relative to a lot of us states. But th but the majority of the population is covered by this.[00:09:00] All right. So tell us about the history of house bill 2001 came into being.[00:09:03] Ethan Stuckmayer: Yeah, well that's tough, because there's a lot of history, there's kind of like two major history threads here. The first is the long-term history of race and income segregation in America. And then that plays into the short-term history of just rising home prices brought on by housing market that's really failed to keep up with the number and the capacity of the units that we've really needed over the past decade or so.  Naturally that short term history is influenced by that long-term history and the conversation about middle housing is is important because it used to be part of our housing market, right? It used to be these row houses, multiplexes kind of all over our, our state and our country. And they're even referenced as kind of like traditional housing types because that's traditionally what we've seen built across the country. But I think in [00:10:00] the even shorter term, House Bill 2001 came into being as part of a follow-up to what the city of Minneapolis did in 2018, which was the first kind of city-wide elimination of exclusive single family zoning.And Oregon kind of took that a step further and did that on a statewide level, but really it learned from the success of Minneapolis, where they will able to create these coalitions of, of, of interest groups or advocates that don't usually play on the kind of same team and brought them together for this, this greater purpose of creating more housing, housing choice, housing options, and then leading to more affordable housing. And I think the lead up to House Bill 2001 saw a lot of housing advocates teaming up with the home builders association and Realtors teaming up with their housing advocates. Some of those things you just don't really see on a regular basis legislative session to session. So House Bill 2001 really I think, learned and was successful in [00:11:00] part because of City of Minneapolis. [00:11:02] Kol Peterson: Yeah. I think one of the themes this week has been the impact of this coalition building at a local, regional, and now a state level and the importance that that's had in terms of this general movement towards small infill housing or middle housing or whatever we're going to call it.So, what is your role and DLCD's role, more broadly, in developing regulations for House Bill 2001. For those who aren't familiar with the general rule making process, there's the law, the legislation, then there's the rulemaking process. So what is DLC D's role within the rulemaking or regulatory development process?[00:11:37] Ethan Stuckmayer: Yeah. So DLCD has got a very singular role in the state process. Like I mentioned, there's these 19 statewide planning goals and we're kind of like the protector of those statewide the Oregon statewide land use system. I say protector. I think some others would probably say more like passive observers or even some other people might

Michael Andersen:  Thanks for the invitation. Kol Peterson:  I'm just gonna start by having you say a few more words about yourself that are not covered by your bio, that you would like for people to know about you. You've done a lot of things over the years that are relevant to the questions we'll be talking about today is so  provide a little context for things about you that we should know.Michael Andersen: Sure. I, I became obsessed with housing policy and transportation sort of in tandem. When I was a reporter in suburban Portland covering Clark county, Washington I was covering county government and like two parts of county government are covering poor people who are interacting with the criminal justice system and covering rich people who are building new homes or even middle class people who are building new homes on the fringe of the urban landscape.And I was seeing all these poor people, but get being screwed by the fact that they were being forced to live in [00:03:00] places without that we're not designed for people without cars. And then they would own a car, but it'd be a crappy car. And then their car would fall apart. Then their life would fall apart.And I was like, there's got to be better. Our solution. Meanwhile, I was spending time with all my 20 something, friends in Portland who didn't have cars and they didn't care. Like, and so I was like, it's not as simple a story as that. Like there's a lot of privileges both ways, but that was sort of what got me thinking about transportation and housing.So since I've been working on public transportation, journalism and biking journalism, and since more recently housing advocacy, I've been sort of  doing content in various ways. Kol Peterson: So tell us a little bit about your own family's experience, living in an ADU. Michael Andersen: Yeah.  It started with just trying to continue to live with our housemates.So I was interested in living with housemates when I started a little business 10 years ago because I was new, I was going to be socially isolated otherwise, and I needed to save money it worked in both dimensions. And then my wife moved in and then  our housemates had a kid and then we were going to have a kid.We [00:04:00] were like, this is too much for this 1942 building. And we're gonna have to figure out some way to do it. And we decided that best way was for us to keep them whole while they built an ADU. And so we lived as tenants for several years. And it was great. It was a perfect setup for both of our kids to grow up together as best friends and the they had to move for a job recently.So we've relocated since, but it was a really rewarding thing. Kol Peterson: All right, so you have some direct personal experience with ADUs  in particular, and we're going to talk about ADUs for sure, but we're also going to focus on this broader conversation of middle  housing today. So let's start off with talking about Sightline Institute first. Tell us a little bit about what Sightline Institute is and  what's the mission of Sightline Institute? How would you describe it to other people for those who are not familiar with it? Michael Andersen: Sure. We're a sustainability think tank founded in 1993 based in Seattle, but covering the Pacific Northwest.So my, my boss's big idea is that you can't get people to care about their planet. The evidence seems to suggest, but maybe you can get people to care about their [00:05:00] ecosystem. And so we focus on the Pacific Northwest as an ecosystem across the border states and nations, and write about the ways that we can make it the best, most welcoming, most sustainable version of itself as a model to other ecosystems.Kol Peterson: Is there any other examples of similar Sightline Institute types of think tanks out there in other regions or comparable institutions that you can think of in the United States. Michael Andersen: We're definitely weird, but Rocky Mountain Institute is a little bit similar. There are a lot bigger now founded in Colorado, I think.And there's my my colleague Eric is trying to working on creating one for Appalachian actually. So there may be more.Kol Peterson:  Cool. All right. So how tell us about the scope of the material that you cover for the  Sightline Institute. Michael Andersen: I write mostly about housing, a little bit about transportation and that overlap, which is parking, which I love talking about parking, in the Portland and Oregon areas.So mostly focusing on the statewide level and regional level and what we can do there, but also a little bit of Portland stuff to the extent that it's [00:06:00] like a model for other cities. Kol Peterson: And how does the material that you cover for  Sightline Institute fit into the institutes larger mission? Michael Andersen: I think one of our niches is that we are a sort of environmental organization that is really into economics and harnessing the power and insights of economics for our progressive sustainability sort of vision.And one of our insights, or one of our decisions, our perspective is that  we desperately need to reduce the need for energy over the longterm without making it feel like we're giving anything up. And the way to do that is to allow urbanization, but we've banned urbanization because of zoning laws that have made it impossible for people to basically choose where they want to live, which is good for lots of reasons.So we try to work to undo that while also not being blind to the other complications that creates for disruption and so on. Kol Peterson: You previously wrote for a bike blog, local [00:07:00] bike blog. That's quite beloved, quite popular called Bike Portland. Can you talk about the material that you wrote for Bike Portland and how it relates to what you covered at the Sightline Institute?Michael Andersen: Yeah. So when I came to Bike Portland, it was just 2013. Portland was sort of swinging into a big boom in home building was coming out of a four year, like plateau, like almost no home building. So like there was, it was obvious that there was going to be some sort of a rent crisis. We already had a rent shortage and then the rents were starting to climb.And I was really interested in like, we should be solving this problem, but we should be solving it in a way that makes things more proximal. Like if you look at the greatest biking cities in Southeast Asia or Northern Europe, they're all full of these little close together homes. And that's the bedrock.People are not biking that many miles, they're just biking a lot because there are a lot of short trips. And the only way we create short trips is by building ADUs  and attached homes and apartment buildings that are all close to jobs and everything [00:08:00] else. So that was the case I was making. And I had a weekly column about that and got more and more obsessed with sort of that side of how to improve biking and  by living in the places where biking is already good.Instead of having to spend all our wheels, trying to make biking great in more and more places, which we should be doing both of.Kol Peterson:  This is off topic, but in South Asia, Southeast Asia, and I would imagine Europe electric, motor scooters are becoming more common, right? That's not really taking off in the US.I mean, those little like ride on hop on scooters are really taking off, but not like the kind of ride on scooters that give you longer distances. And they're electric. What are your thoughts about electric scooters and their potential. Are those as good as bikes or what are the differences? What are the ways in which like electric scooters are?Provided serving the same role that bikes could play. And how does that deal? How do you think about that in terms of urban form? Yeah, that's a good question. I don't really have a strong perspective, I guess. But they're better than cars. They're worse [00:09:00] than bikes. Bikes are better than scooters and worse than skateboards.Michael Andersen: So yeah, I mean, I think it's like if a, if a tool is going to work, you should be able to use it. I'm pro transportation to the extent that it infringes on the other types of trends of more efficient transportation, that's a problem. So like when those, when like a motor vehicle is using a bike lane to the exclusion of it, being comfortable for people to bike or scoot in, then that's a problem.But I don't know exactly where you draw that line. Kol Peterson: Yeah. Okay. I've just been, I have an electric ride on scooter. I love it. And I'm just surprised that it's there's so few of them in the U S wherein, I would imagine they're that they're quite popular now. Michael Andersen: Yeah. I don't know why. I mean, it's taken over in Northern Europe too, I think.Yeah. Not taken over, but there's a lot of it Kol Peterson: Anyway, that was a side topic, but I figured you'd have some thoughts about that. All right. So what sources do you rely upon for staying abreast of the latest legislative policy discourse related to [00:10:00] housing nationally? Michael Andersen: My main filter is Twitter. So I use Tweet Deck as like a Twitter app that lets use like organize it all by, you know, most recent first.And so it takes away some of the poisonous dunking fixation that the Twitter algorithm pushes you towards. So I highly endorsed that. And then it lets you segregate by topic. So I can have a column for housing people and  a column for transportation people. If anybody's interested, you can look at my housing list on Twitter, it's a public list.And I use that to constantly update that. Kol Peterson: I bet you people are interested in that. Cause the fire hose is a real deal.  I guess if you're not a reporter, it's like, it's just overwhelming. So I guess my, I guess my question is like following up on that, is there a primary source of like information source that TweetDeck tends to push you towards, or is it individual DIY blogs out there across the, across the internet? Michael An

This week's guest is Morgan Tracy.   Morgan Tracy, a member of the American Institute of Certified Planners has been actively involved in the Oregon land use planning in both long range planning, projects and development review for the last 25 years. He has worked  for the cities of [00:01:00] West Linn, Lake Oswego, Tigard and has been with the City of Portland for the past 15 years in both the Bureau of Development Services and the Bureau of Planning and Sustainability. Currently, he is a staff project manager for Portland's Residential Infill Project, which seeks to increase the range of permitted housing types while lowering housing costs in single dwelling neighborhoods.Kol, what are your thoughts on our interview with Morgan? Morgan has been very deep in the weeds and details of overhauling, a complex residential zoning ordinance for the City of Portland for the last five years. This task was daunting and a journey, not just for him, but for all of the engaged citizens who saw this overhaul as a great opportunity to make a difference in the future of the city that likes to chart new territory nationally in matters, related to urban planning and infill. Capturing his perspective on how this process could be translated to other jurisdictions is hopefully going to be valuable for future research and application of middle housing, zoning, rewrites. Kelcy, what were some of your takeaways?[00:02:00] Morgan gives great examples of how one can participate in city council meetings in an effort to make change in one's local jury state. And why it's crucial that citizens get involved with the process of rulemaking as a planner, as a planner, deeply involved in quite possibly the most progressive zonings shift in the country.Morgan shares his experience as someone on the front lines, as the liaison to the community and rule makers. Let's get to our interview with Morgan.  Kol Peterson: [00:02:25] Good morning, Morgan Tracy: [00:02:26] Morning, morning, Kol and Kelcy, it's great to be here, thanks for having me. Kol Peterson: [00:02:30] Thanks for being here.   Morgan,  the Residential Infill Project is familiar to those of us who are in Portland, obviously, let's assume that people are not familiar with it, but they're fairly sophisticated in this general urban infill topic, very familiar with ADUs. Can you describe for us what RIP is for somebody who might be unfamiliar with it from outside of the city of Portland?Morgan Tracy: [00:02:52] Yeah.  It's a bit, it's a bit challenging to do this in a condensed form cause it took five years of work. So boiling that down, I can [00:03:00] concise.As a big challenge, but here, here we go.  I would say that the Residential Infill Project was the city's first major overhaul of the single dwelling zoning since corner lot duplexes were allowed in 1991. So it had been about 25 years when we got started. Now, these changes expand the types of housing allowed on most lots to include duplexes, triplexes, fourplexes, and options to create additional ADUs in nearly 90% of the single dwellings zone neighborhoods, simultaneously new tools to limit building sizes will ensure that this development maintains the look and feel of those neighborhoods.And together, these changes allow a broader range of compatible housing types that are comparatively less expensive than new single family homes, making neighborhoods more accessible, more inclusive, and more sustainable over time. Kol Peterson: [00:03:45] All right.  I should have asked you this , but I'm gonna ask you, now, what is a good title for you to give some framework for what your role was within the residential input project? Morgan Tracy: [00:03:56] So my, my official title with the city is  a City Planner II, which [00:04:00] doesn't mean much to many people. So, but extensively, the work that I'm doing is, is managing the project.I coordinate our team, our staff, our consultant work, work on the project timelines and make sure that we deliver a project on schedule when we can. Generally, I go by the title of project manager. Kol Peterson: [00:04:18] So this project running five years,  how did the history of Residential Infill Project come to be and why in the world did it take so long to get there? Morgan Tracy: [00:04:29] Well, as you can imagine, it's a bit of a complicated project, a little bit of, a little bit of controversy involved. But let's, let's start with the history.So the project began in 2015 and in 2015, we are hearing a lot of calls about concerns resulting from outcomes from infill development. So we were seeing lots of small homes being demolished and replaced by big, expensive new homes. We, we're seeing about more than a house per day being demolished on average.And we're also seeing the housing prices in 2015 were beginning to price out families earning a hundred percent of the Median [00:05:00] Family Income. So that essentially translates to about half of the families in Portland would be unable to afford to purchase a house in the city. So recognizing the city could not prohibit tear downs and simply applying stricter limits to new development would tighten the supply of new housing, which exacerbates housing costs.We brought together two objectives, which was addressing the scale of new development and increasing housing options in neighborhoods. And part of the, I think the real challenge in this project were these are two almost at-odd objectives that we had to balance  and bet with the public in multiple scenarios, multiple occasions So you know, you, you asked why it took so long.There were several steps along the way, either fortunate or unfortunate. But first off  we started under a different administration  under Charlie Hale as mayor, and he had decided towards the end of his term that he wasn't gonna run again, but he wanted to see some product.And we weren't at a point where we can deliver a new code and new maps and all that stuff. So, [00:06:00] we 'd agreed to bring forward a concept plan, which  essentially lays out the basic trajectory that the project is going to follow. And the positive side of that is it's good to take the temperature of your decision makers to see if you're going in the right direction before you really invest a lot of time and effort.The downside of that is the project took so long that by the time we got back to city council, four years later, it was an almost entirely new council. We just had one city council left. So that was a bit of a fruitless exercise. We also spent 14 interesting, exhilarating months with the planning and sustainability commission.We went through almost every single detail of that project, point by point by point by point in a series of monthly meetings. And about two thirds through that process, the planning and sustainability commission, after hearing public testimony and considering the objectives, and then the proposals, gave us some rather very different direction, which caused us to go back to the drawing board and start over on our code.[00:07:00] Not entirely, but it really  changed the fundamental building blocks that we  come to them with. So we had to redo our analysis, redo the code, and that took  some more time. Unfortunate outcome of that was we were also about to lose two of our planning commissioners, they were terming out.And so by the time we got back to them, we were really  in a rush to get a decision from them. And so we came back to them with this revised proposal and said, here it is, here are the stats, the data, and the analysis, what do you think? And we'd unveiled a displacement risk report and didn't really spend a lot of time going through that report. Understanding the implications, what the data was really telling us.And so they felt rushed to a decision and they had a rather split decision. It was a five to four decision. And so that created a little uncertainty at city council. We had to take time to work with the council offices, go through these reports, help people understand what they were telling us. We started the city council process and right before we were about to finish, COVID struck and that's through another five months [00:08:00] on the end.So now a little bit of that's me, but a lot of that's just the circumstances of the project. Kol Peterson: [00:08:05] Just as an observer slash public participant, I could tell this was an extreme, highly engaged public process and there was so much commentary from the public on this.And I, I couldn't imagine having to balance all of those different  inputs that you guys had to manage. So we're going to talk a little bit more about that, but just to give people some context for that, how many public comments would you say the City of Portland received on the residential infill project?Morgan Tracy: [00:08:33] Close to 15,000. We also were, at one point we sent out 123,000 notices to property owners. Kol Peterson: [00:08:41] Yeah. So  this would be  on the scale of a very highly, both engaging and engaged topic in terms of the impact that it was going to have on people and the level of input that they wanted to provide, relative to most public processes. Would you say that? Morgan Tracy: [00:08:58] Yeah,  it was [00:09:00] both super engaging, everybody had an opinion, no matter where you were what, what sort of venue you were at.  Just about everybody you talk to either lives in, or has lived in a single family home or single family neighborhood and has opinions about that.So there's that, and then  the geography was city-wide. So that's you know, that's  a lot of area, a  lot of peoples that are involved. Kol Peterson: [00:09:19] Can you talk about  Bureau of Planning and Sustainability's role in developing policies and regulations for RIP, and maybe  talk about, just as a general 101 for those of us who aren't familiar with the process, the Planning and Sustainability Commission's role relative to the Bureau of Planning and Sustainability its role, and the

Alexis Stevens is the co-founder of tiny house expedition, the DIY tiny house, dweller and advocate. Along with our partner Christian Parsons, they inspire others to rethink housing  through thought, provoking storytelling, educational events, and resource sharing.Their work includes the acclaimed educational documentary [00:01:00] series. Living tiny legally. Living, tiny legally. It was featured on Washington post NPR business, insider parade magazine, curved entry, hugger. Cool. What were some of your takeaways from listening to this episode? Well, I'm in a real kick right now with mobile dwellings.So it's really fun to banter with Alexis who is equally wonky about tiny house on wheels regulations. The tiniest moment is very fractured and stealthy by nature. So it's fun to try to anticipate how the stealthy movement will actually play out. In the future technology has enabled mobile dwellings, like RVs vans, tiny homes, and park model RVs to be far more convenient and practical than they would have been for living 20 years ago.And I expect that we will look back almost consoling only to the days when tiny houses on wheels weren't even legal to live in, in residential zones. And think how weird it was that we didn't allow people to live in mobile dwellings. Kelsey, what were some of your takeaways? Alexis is incredibly personable and we had a great time chatting with her.She has traveled the country in search of knowledge [00:02:00] and experience of how tiny house communities are collecting and advocating to improve local regulations, to make this lifestyle more accessible.   Let's get to our interview with Alexis. Kol Peterson: As, as Kelcy was introducing you, my Alexa device was responding and I was like,oh shoot, ,that's going to happen this whole episode -got unplug that. That that must be so annoying. It is so annoying. Alexis Stephens: We recently filmed in like three tiny houses with Alexas and they had to turn them off and yeah, it gets old and Alexa got creepy. I don't know if it was because I was there and she felt competition, Kol Peterson: What a bummer, huh? [00:03:00] I mean, you can change for your own self. You can change the name of Alexa to somebody else, but like everybody else is still going to have the default Alexa. So it's going to pester  you for the rest of your life. Your bio was just read, but let's just hear a little bit about your personal endeavors with living in tiny homes. Some people have a little bit of context for your history, with the you know, living in one. Alexis Stephens: Sure. Back in 2014 Christian and I ordered our, our trailer and built our tiny house over the next nine months.And he was the main builder, but I helped, I learned a lot of new skills and we had a lot of great help for friends and family. And like so many people in tiny houses, we fell pretty hard down the rabbit hole. Before we decided to build and research like crazy for, you know, for personal choice to simplify.It was a time in my life that where that just felt so right, [00:04:00] but I'm just an all or nothing person. And as I was researching, you know, I really fell in love with the movement and how creatively tiny homes are being used to address personal and community needs. And so I got the idea to travel around with our tiny house and document the movement.And so I pitched Christian on both at the same time, I was like, let's build a house. Like I want to build a house and I have this documentary idea. Do you want to do it with me? Because we'd only been dating for a year at that time when I pitched it. Fortunately he was a really good sport and really loved the idea of it.The rest is history. And after we finished our house at 2015, we ended up traveling for about four and a half years zigzagging across the United States, peaking into Canada. And it had just the most wonderful adventure. And most of that was around documenting as much as we could of the tiny house movement, the people, communities legal action that was happening.And then of course we threw in some, some fun stuff [00:05:00] and some family visits, but I'm really happy to say that now we just traveled three months out of the year and have a home base in central Oregon. Kol Peterson: Awesome. So this is not going to be so much focused on your personal experiences but  rather the tiny house movement at large and specifically the regulatory things that are occurring in the U S so, and, you know, tying that into ADUs  to some extent, but just more generally legalization of tiny homes on wheels.We're going to talk about your specific documentary series on that later, but let's talk more about the nuts and bolts of it. So can you attempt to define tiny homes on wheels? Alexis Stephens: Yeah, absolutely. You know, the term tiny  house is a slippery one. That's for sure, especially in the media, but a tiny house on wheels, also known as a movable tiny house is built on a trailer using traditional housing materials and techniques for the most part, but at its core, it's a hybrid [00:06:00] structure that has a lot in common with like a travel trailer, as far as mobility, but with more durable materials construction, more kin to a traditional house than at RV, which makes it more suitable for a year round living, you know, think insulation, you know, is a big one.The difference between an RV and a tiny house is night and day it's, it's a residential house versus a camper. It's,  that's what we're talking about. Kol Peterson:  Would you say that there's a universally agreed upon definition of a tiny house on wheels in terms of size? Obviously it's on wheels. Aside from that, is there any other like core definitions that we should bear in mind or is it kind of all over the map? Alexis Stephens: The term is, is still squishy, so to speak. And, but I will say that in tiny house, on wheels or movable tiny house zoning ordinances it is starting to get a little bit more formalized.And in most of most of those you know, what I, a version of what I said and more formalized language [00:07:00] is, is becoming more widely accepted. Typically they'll say a chassis instead of a trailer. And, and in some areas, particularly California, they do like to distinguish a tiny house from an, a traditional RV, because, well, I'm sure we'll get into this word later.They are trying to discourage, you know, RVs in backyards and, and want something that looks like a cottage that resembles an ADU. Kol Peterson: So what roles do you see tiny homes on wheels playing in housing, a formal legal housing on residential properties?Alexis Stephens: You know, I love a tiny house on a residential property because it's so, so flexible is great as a caretaker unit and not necessarily, you know, it could go either way. It could be like your mom, your mom, you know, comes to live in your backyard. Cause you've had a baby and she just can't stand to be away, but you maybe can't send, have her in the house.You know, or vice versa where you, you or a [00:08:00] nurse comes and lives in a backyard in a temporary fashion to take care of someone. We just visited someone in Eldorado Hills, California doing just that. Her parents health is starting to wane and she lives on their property, but doesn't plan to be there forever.So very, very flexible. Yeah. Besides this, the caretaking idea is just another housing option. A long-term more affordable housing option. That's very mutually beneficial for the homeowner and the tiny dweller. You know, I think sometimes people look down on tiny houses on wheels in this like temporary mobile fashion that they are as, you know, taking advantage not paying their fair share.When in reality, the majority, I mean the majority of tiny houses  in my personal experience on residential property are helping pay the mortgage, the property taxes. We just visited a great situation where a woman was divorced, a single income. [00:09:00] What is she going to do? Her whole life is there.And so she welcomed a couple of tiny houses onto her property to pay her bills. Kol Peterson: So sounds pretty similar to ADUs in that way. How would you differentiate the roles that tiny houses on wheels and ADUs can play in housing on residential properties?Alexis Stephens: You know, it's, there's a lot of similarities, like you said. I think the main difference is the flexibility, you know, it's flexible infill housing that can be removed as needed, which is kind of, kind of great because you know, dedicating to an ADU is a very long-term permanent situation where, you know, this, the cost of it alone, you know, I mean, you're not going to want to take it down once it's up where a tiny house like it, you know, if you need it to back could be gone for when you need to sell the house or if your situation changes.Kol Peterson: And I'll chime in with a couple of responses after my questions, because I have a lot of thoughts about this [00:10:00] too. So forgive me. So I would also say that tiny homes on wheels are vastly less expensive than ADUs in general. And B to your flexibility point. There, this opens up this whole other marketplace of potential things that don't yet exist, but marketplace actors such as third parties that could own the tiny houses and lease it to either the dweller or to the owner of the property could exist.Whereas with with ADUs, you could theoretically come up with some way to do that, but it would be really challenging. Tiny homes on wheels definitely afford some really innovative new business models. Alexis Stephens: Yeah, excellent points. You know, the cost is a big one. You know, it's, it's incredible how much money you can save when you, when you skip the foundation.And the price range of tiny houses. This is so great. I know people complain about that, but you really can get something that's suitable to you. And the loans are just becoming more available all the time. Kol Peterson: This  wasn't one of my questions,  but  like how much does

Kelcy King: Kol Peterson is an ADU expert based in Portland, Oregon. He has helped catalyze the exponential growth of ADUs in  Portland over the last decade through ADU advocacy, education, consulting, policy work and entrepreneurship. He is the author Backdoor Revolution, The Definitive Guide to ADU Development, and also happens to be the host of this podcast.    For this episode of the ADU [00:02:00] Hour, we decided to shake it up a little bit, and I take on the role of the interviewer. So Kol, what were some of your takeaways from listening to this episode?  Kol Peterson:  In this episode, we talked about building coalitions. Now that ADUs  being folded into broader policy conversations about middle housing, more generally. A conversation that has really taken off in a big way in the last year.I think that this idea of coalition building and meeting regularly with that coalition has even more salience. The power of a disparate group with diverse expertise, but with a common mission of getting more ADUs built cannot be overstated. Groups like this can definitely,  help change regulations, change laws, impact financing opportunities, raise awareness about ADUs and much more.Kelcy, what were some of your takeaways?Kelcy King:  Well, I will second that your interview offers some great nuggets in regard to forming coalitions in an effort to advocate for ADUs as a piece of the puzzle for  building greener, resilient cities, and as affordable housing, you've also built quite a few ADUs on your properties and you offer a few [00:03:00] design tricks that you've used offer highly enjoyable living spaces in a small structure.Let's get to our interview with you. A quick heads up to our listeners. My audio in this episode is subpar. So sorry about that. We also had some technical issues during the original recording and lost the introduction. So we'll start here with the second question I asked Kol.  For those looking to advocate at their local municipal level. Where would one start to address ordinances that only allow ADUs in certain zones within a city? For example, some residential zones, but not other residential zones.    Kelcy, just to be clear here. So the question is if you're aware of the best practices, as far as what regulation should be,  how should you go about making those changes? Correct, yes. Kol Peterson: So,  this ties into a later point that we'll get into, but I think  there's so many different things that need to be changed in local regulations to make the regulations for ADUs good.  It's not as though, if you are able to [00:04:00] address, say off street parking requirements that you will have a good ADU code.Rather, there's like  20 or 30 different little things that will all significantly impact whether or not a code is good. So let me just pick on one example, California has an incredibly good state code. However, they have one element of their state code that says by right you can build a 16 foot ADU. Well, that is a big poison pill, in my opinion, that isn't a good policy.  They have this incredibly good ADU regulations statewide, except they have this one thing that makes a whole lot of ADUs is not possible, which is you can only build a one story ADU. Which is a killer, that doesn't work. ADUs will not pencil if you have that in place.And that's a minor thing, but that's very major in a lot of ways, like sure. A lot of people will still want to build ADUs in California and some jurisdictions will have liberalized height standards, but statewide, most jurisdictions will not. And therefore they're killing [00:05:00] 20% of their market without one bad regulation. Having visited several hundred ADUs in Portland, where that isn't in place, most of the ADUs that are built, the majority of them are two story detached ADUs. Why, because they're being built on small lots because they want more square footage in those ADUs.And so if you're requiring people to build an 800 square foot, one story ADU, they're not, they're going to lose their backyard and that isn't going to work for a lot of people. That one little example, it doesn't doesn't really matter that much, but I guess the point is there's so many different things that need to be worked on that.I think there's a need for a group of people to be working collectively. Slowly improve their regulations over time. Kelcy King: Is there a certain place where you would start? Like, would you start with zoning? Would you start with owner occupancy or is it just chisel away as you can?Kol Peterson: Yeah. So I think that depends on what level you're working on. Right? If you're working at the state level, really, if you're working at any level, I think the [00:06:00] way to go about this is understanding from an advocacy point of view. This is a hard one for people to swallow, but your code needs to be A-plus bomber for people to actually want to build an ADU. So if you have the 16 foot poison pill in your regs, it's not good enough. It needs to be much better. And that, and like that doesn't, that means that everywhere in the country has bad codes except for Portland, Seattle, and a few jurisdictions in California.So  there's a lot of room for improvement. And then you can get to these kinds of like next level ADU codes that are like two ADUs and allowing two detached ADUs.  My vantage on this is you have to aim really high, and hopefully they'll get most of that because if you incrementally chip away at these regulations over time, it's going to take a long time. For example, the entire east coast of the United States doesn't have a single city with what I would classify as a halfway decent set of ADU regulations. I would not build an ADU in any city on the entire east coast. So, a city [00:07:00] could work on chipping away at those regulations over time, but  it's really challenging. It takes decades to pass good code.  Rip off the band-aid and pass a really good code once. That's the approach that  I'm in favor of.And as a result of kind of working on this for the last decade is advocacy changing regulations, because I've now come around to thinking, you know what? This is too painful  at the jurisdictional level there's too much nimbyism too many, too much local politics to deal with. We have to do this at the state level because it's taking too long and we don't have the time to wait,  this is not a tenable approach to improving your ADU regulations,  bit by bit at the local level, across 128,000 jurisdictions and  not at the pace at which we really need this form of housing to actually take hold. Kelcy King: So this is a great segue because I'm moving into the state regulations here.So in order to advocate at the state level and have that be the most effective, first, who are the target legislators and representatives you would target? Kol Peterson: I don't know  the political scene [00:08:00] necessarily at any state let alone every state, but I would say what I've seen, what did a little bit knowledge I have about this as what I've seen as lobbyists, so to speak whether that's the Home Builders Association or AARP or an affordable housing group working with an elected state legislator, House or Senate, putting forward a proposal and then working that through the sausage making process. There's been a couple examples of statewide legislation now in Oregon, in California, in New Hampshire in I'm sure a few other places.  A lot of these have not been particularly effective in the sense that they are not getting rid of any of the poison pills, they're simply enabling ADUs to be built. That's what happened in California prior to the latest two years of legislation. That's what had happened in Oregon. That's what had happened elsewhere. you might as well not allow you to use if you're not going to have really good ADU regulations, it's the same thing.So just saying we allow ADUs,  that's pointless. Don't even bother. Go do something else. [00:09:00] If you're going to get serious about enabling ADUs, you have to have excellent ADU regulations. So. Getting back to this idea of  work with the state legislator, who's going to be open to pushing the envelope really far, making people uncomfortable.And hopefully you'll be able to build a coalition of stakeholders that really support that policy measure. And that's what it's going to take to actually set environment where hopefully at that point, maybe we'll start to see some ADUs built,  don't count on that.  Even if you have the best ADU regulations, it doesn't make it easy to build an ADU at scale. They're not going to just take off overnight. You will get a pathetic, pitiful number, ADUs being built, even in the best conditions. Like what we'll see in California, we'll see many more times ADUs being built, but it's still a very small number of ADUs overall.So I think that's kind of the good and the bad side of this stuff is  it's going to take a long time for ADUs to make a substantive dent and the kind of housing crisis that we have. But we can only start to get there if we have really good ADU regulations.  I would say working [00:10:00] on approaching it really aggressive  ask using a lot of data that I point out in the book and that's available elsewhere. As far as going for the gold standard kind of default model zoning code for your whole state is the way to go. And if you can't get that, work on it on the, at the local level.  The most controversial things to work on are owner-occupancy and off-street parking. I'd say those are the ones that, if anything, I would work on those at the state level, because locally it's really politically challenging to get rid of those two poison pills. Kelcy King: How do you show up as an advocate? You personally, are you showing up in person? Who are you showing up to see? And are you, are you like writing letters, gathering signatures on petition? How do you show up? Kol Peterson: Yeah, I do all the above. I write letters when there's draft proposed regu

Timothy is CEO of RESCON Builders the largest dedicated Granny Flat building company in Australia, and founder of Canibuild, a sales app changing how the world’s builders sell construction.

Kol Peterson: All right. So this is Willie Dean and Willie Dean is a residential designer working primarily doing ADU design and has worked [00:02:00] quite a bit in both Oregon and now in California.  I thought he would be an appropriate guest to have because yeah his experience in both those states. On top of that, Willie is also an excellent ADU designer. We're going to be talking about ADU design as a general matter. And hopefully everybody can get something out of our conversation. So, Willie why don't I give you a second to introduce yourself in a little bit more detail?Willie Dean: Sure. My name is Willie Dean. I am an architectural designer in Portland, Oregon. My company is called Ground Up Design Works and I specialize in residential design of all types. But I'd say specifically, probably 80% of my work  is accessory dwelling units here in the Portland area. And over the last few years I had a opportunity to work with a company in South bay, San Jose area and with them, we, we executed probably twelve ADUs in the South Bay, Silicon Valley area.  It's a good amount of [00:03:00] work within a short period of time. But I definitely have some observations about differences, good and bad and  in general. I got my master's degree in architecture from the University of Oregon and that's what got me out to Oregon. I'm originally from Wisconsin. I got my undergrad from University of Wisconsin, Milwaukee. Kol Peterson: So for those who don't know, I actually went to a design school myself and everybody wore black rim glasses.So is it a requirement that you wear a black rim glasses if you're an architect? Willie Dean: You know, some people with other colored glasses but it's a standard. These are actually technically navy blue. Kol Peterson: Navy blue. Okay. I'm color blind. All right. So we're going to dive right into your work in Oregon, California.So which markets specifically have you worked in ? Well, I should say in Oregon you probably just worked in Portland, correct? Willie Dean: For ADUs. Yes. I've only done ADUs in Portland. I've done a couple of remodels in Vancouver, I've done a single family house [00:04:00] out in  rural Wasco county. But as far as ADUs are concerned,  actually only the east side.Kol Peterson: I just point that out to say that I know a lot of people who work in the ADU space in Oregon and when I say Oregon, it's really just Portland because there's not a lot of activity, even  five miles away from where we are in Portland, because the regulations haven't been the same. In any event. So California, which jurisdictions have you worked in? Willie Dean: So San Jose, Campbell,  Mountain View,  Los Gatos. The interesting thing about that environment is that every few miles you're in a new town, right. And that's pretty different than Portland where we at and sort of the urban growth boundary and the rules are pretty similar for miles in any direction. Whereas down there, I mean, it's a way bigger space. There's way, way more people. And there's all of these little enclaves that all have their own specific zoning rules. So, that's one of the huge differences working down there. You have every town you go to, [00:05:00] you have to learn a whole new set of rules.And some of them base their rules on the same stuff. And some of them are just different. And then the way that the permitting offices work is always different, too. Kol Peterson: So tell us about some of the substantial differences between the ADU design work that you've done in these two markets, Portland and the San Jose zone in terms of a number of different things. So process wise, things like Title 24, net zero solar requirements, designing for dry versus wet conditions, culture wise in terms of players, actors and costs. Willie Dean: Yeah.  I know that there's a new set of rules in California in 2020, and I haven't done anything this year within the context of the new rules. So everything that I'm saying is, is a tiny bit dated in that respect. But my experiences was that the rules in that part of California, where I was working were a little bit more restrictive.  In Portland, you're [00:06:00] allowed to do 800 square feet or 75% of the existing house, whichever is smaller.And that's just across the board. Down there the lots are a lot bigger and it's based on a FAR, but a normal lot down there is 7,500 square feet and you can only do a 600 square foot ADU. So, for my experience, we could only do single story  one floor, one bedroom, one bath, which if that's the context or the constraints of the project that you're working in and it simplifies things drastically. So it was, I suppose, easier because you didn't have as many tricks that you could pull out of your hat. But also limiting in that, I felt like it's the most expensive housing market in the country and we're limiting it to these one bedroom apartments that we're building where there really is huge, huge, huge opportunities for infill, and we could be doing bigger projects. From a zoning perspective, it seemed  it was smaller and therefore simpler [00:07:00] projects then into like Title 24, that's just an interesting  different way of doing things. In Oregon, we have the energy code and it's just a part of the design review and there is no third party verification, which I mean on some level is maybe a better thing, that there is third party verification and it makes it, it maybe adds a little bit more rigor to the process, but it also makes it more expensive.You usually have to work with a specific Title 24 consultants and then you become sort of a middleman.  You're asking somebody else to verify your designs. So it's a little different. And then it's also interesting because while we just have the code here, our code is actually stricter in a lot of ways as well.So because it doesn't get cold down there,  you can still just do a two by four wall with R- 21 insulation. You do slab on grade construction, you don't have to insulate under the slab. So these are things that outward just like standard [00:08:00] designs in my kit when I went and  we ended up changing a lot of those things, 'cause when I started two by six walls and under slab insulation and all these things that even with the, the added rigor of T 24, weren't necessary because of the climate. Kol Peterson: What about drive versus wet, that change anything? Willie Dean:  I still designed it as if it was going to get rained on because it does still rain and when it happens, it's the same .  I guess one big difference is up here, we have to mitigate for storm water. And down there you don't,  for the most part. If you're in a  low land area where you're not going to have good drainage, then they might specifically single you out  to do something about it, but we weren't putting in dry wells and every single project.   It rains everywhere, but here because it rains so much, we have these onsite water mitigation systems that you don't have to do that down there.Kol Peterson: Right. Just, as a side note, Portland's  always been a little bit on the bleeding edge of stormwater management and we have a really good  [00:09:00] climate for that. This really light rain that falls a lot of the year, so it can absorb storm water on site. And I've always liked that, but it can't, you can't do that there  as much because of the rainfall patterns. So costs talk about  cost-wise some of the differences between the Portland market and the San Jose area. Willie Dean: Yeah. It's a lot more expensive, it's most expensive housing market in the country and so that just makes everything more expensive. Because the cost for the people that work down there. It's one of the reasons that I was hired.  I know what I'm doing with ADUs and so the people that I was working with met me, and thought that I was a good fit, but also I didn't live there. It was it was hard because people that are living there are already busy working in the housing market  and they were having a hard time finding people because of how busy it is. And then in terms of cost for building, it's just a lot more expensive. And you know, being a designer,  I wasn't bidding and building all of the projects, so I don't have the exact number of where and why, but just if a climate's more expensive than it's going to be more expensive to build [00:10:00] down there. Kol Peterson:  Just to dive into that, cause I had to figure this theory out for myself, and I'm sure other like economists have written about this, but if you were to go to a Home Depot, a stick, a lumber down, there would be roughly the same cost as a stick of lumber in Oregon as an Alaska as in Florida.But it's that I'm guessing it's private, primarily the labor costs that escalate significantly.   I would imagine a direct correlation between land values and labor costs and therefore construction costs. How does that mesh with what you had hypothesized about that?Willie Dean: That's right. I think that it's in the building, not in the material. It's possible that there's a slight increase in material and there's a lot of people from California on the chat here, maybe somebody else that has bought material in both places regularly could answer these questions better than me because I'm primarily drawing the designs.But I think that that idea that  the labor is for sure the most expensive part, because those people need to be able [00:11:00] to afford to live at least somewhere near there. And even if you're not living in San Jose, but you're living a half hour away, it's still expensive.  I would assume that it's just a more expensive climate to operate in. Yeah. Kol Peterson:  Let's get into a more nuanced element of that question I posed. You were one part of an ADU development process, so you might not be able to speak to all of this, but can you talk about some of the cultural differences and I'll give some context for this, my experience in the Portland market, your experience in the Portland

Ashley is the founder and president of YEGarden Suites and Calgary Backyard Suites - Alberta’s only education and advocacy-based non-profits dedicated to informing citizens on the benefits, challenges, and regulations surrounding backyard housing. She is also the CEO of Municipaction Inc., a consulting firm that supports Edmontonians in their city-building endeavours. She has experience working across sectors on projects related to affordable housing, climate change, social isolation and inclusion, infill policy, seniors housing, and demographic change. Born and raised in Edmonton, Ashley holds a BA Honours in Sustainability and Sociology from Dalhousie University, and an MA Planning degree from the University of Waterloo.[00:00:00] Kol Peterson: Good morning. Ashley Salvador: Morning, Kol.. Kol Peterson: Thanks so much for coming on today. Ashley Salvador: Thanks for having me. Kol Peterson: And I'm super excited to talk with you about the work that you've done. I've been a fan of your research for a number of years and never had a chance to really talk with you directly.  I've read your work because you put some of that content on AccessoryDwellings.Org initially, and that's kind of how I first learned about it. So let's dive right in. So tell us about yourself and where Edmonton is for those who aren't familiar with Edmonton.Ashley Salvador: Sure. So first of all, I've been tended in Alberta. Some of you may notice the Texas of the north. It's not necessarily that I would say, Hmm. Conservative. We, we actually have a lot of progressive policies here, a lot of really young folks who are looking to push the policies in a really good direction.On the, on the ADU front, things have moved quite quickly over the last couple of years to allow for,  the diversity of sizes, sizes of ADUs basically across the entire [00:01:00] city at this point as a permitted use. Yeah. And. Just for a bit of context, we're looking at getting rid of our parking minimums entirely.So if that gives you a sense of kind of where we sit as a city and where our city councilors are at that's that's Edmonton. Kol Peterson: Yeah. Cool. So how did you get involved in doing ADU research and work?Ashley Salvador: Yeah. So it actually started in my undergrad. I have a degree in sustainability and sociology from Dalhousie University.And I started to get really interested in basically cities as human habitats and the ways that our cities are helping us thrive, but also the ways that they're kind of detrimental to So from a sustainability lens, I was always interested in the ways that we can help our cities grow, grow inward as opposed to outwards forever endlessly.And at some point along the way, I came across ADUs as a way for  everyday homeowners to participate [00:02:00] in kind of the remaking and rebuilding of their cities. So that's, that's where it started. Kol Peterson: And can you tell us about some of the key findings of your undergrad and master's degree research in of garden suites and secondary suites, and actually, maybe take a second to define garden suites  for people since that's a different term. Ashley Salvador: Absolutely. So garden suites would be a detached accessory dwelling unit. Most folks will know them as that. Also known as laneway homes, granny flats. The list goes on in Edmonton attached, ADUs. So ones that are typically located in a basement, those are considered secondary suites.So most of my research focuses on detached accessory dwelling units, so independent from the main house. And I've done two studies at this point. One was in 2016 to 2017 and one I'm currently doing right now. So I, in terms of key findings just reflecting back on the study done in 2016, one of the big findings coming out of [00:03:00] that and Kol,  you know all about this is voluntary, affordable.There was a really good study actually out in Portland that did a full sample or a full survey of owners at that time. And similar findings were, were discovered there around the affordability benefits.Kol Peterson:  Let's just dive into voluntary affordability and then we'll go back to other findings.Ashley Salvador:  Yeah. So basically what I wanted to look at from my research was whether or not it user functioning as a form of affordable housing and what the relationship between the owner and attending.Has to do with that affordability conversation. So in Edmonton, it was found that close to half of the people who are building these gardens suites are doing so for family or friends to live in. The other half are doing it for a traditional rental income. And when you bring affordability into that conversation it was found that the folks who are renting to family and friends are charging ultra low, sometimes zero rent. [00:04:00] And I mean, it, it seems pretty intuitive.  You're not going to charge grandma a bunch of money, the same way you would just a, an unknown tenant. But being able to put that, that finding on paper and actually have similar findings popping up in other cities like Portland, it shows that there is a trend and it shows that ADUs in some capacity are functioning differently in a traditional rental property.And part of that has to do with the fact that these are homeowner developers, right? They're not,  these big wig professional developers who are just trying to do it for a money-making opportunity. There's social reasons in there as well.Kol Peterson: Let's go back to the original research. Aside from the, just generally speaking that voluntary affordability is one of the things that happens with ADUs, what are some other key findings from your original research?Ashley Salvador: Yeah. So from the original study I also looked at barriers to development. And one of the biggest [00:05:00] barriers at that time was cost and financing. So it turns out that around 70% of the folks who were building ADUs had a household income of over a hundred thousand dollars annually. So that also brings into question who is able to even benefit from ADUs.. And it was looking like at that time it was really reserved for folks who are in that higher income bracket..So that was, that was a big finding. One that I like is folks who are building and living in ADUs  don't own as many cars. So it is just that they are trying to. Either by choice or just by the location they live in, in the city live a more sustainable, less auto dependence lifestyle. Kol Peterson: So regarding voluntary affordability, I think you've found some interesting things. Can you go into a little bit more depth about some of the data that you were able to derive from your research?Ashley Salvador: Yeah, absolutely. And I'll, I'll bring in the current research as well. Cause there was also some findings around [00:06:00] voluntary affordability there. And so if we break down the numbers if you're looking at kind of a typical rent or comparable unit in Edmonton, you'd be looking at around,  $1,100, maybe $1,200.Whereas an ADU who is rented to not a family member---the owner does not know  the tenants. It would be comparable, sometimes slightly higher. Whereas if you renting to a family member you're looking between that $500, maybe $700 range. So there's a pretty significant gap between those two and that's not accounting for the people who are discharging zero rent at all.And I think one of the interesting things is on top of that affordability benefit, there's also some, some sharing of services. So in exchange for,  living rent-free in an ADU, maybe your friends or your grandma is helping with childcare, maybe really helping with yard maintenance, things like that.So there's some kind of informal economies [00:07:00] that are happening around ADUs as well. Kol Peterson:  Can you tell us briefly about the objectives and the model of the Cornerstone Grant Program and what your findings were about that incentive program to induce more deliberately affordable ADUs?Ashley Salvador: Sure. So. First of all the two, the two main objectives of the study were to look at affordability from both the renter's perspective and the owners and the city of Edmonton has a program that is meant to incentivize the development of ADUs. It's called Cornerstones and the Cornerstones Grant basically we'll give up to $20,000 towards the development of an ADU in exchange for renting that ADU for five years, to someone who is within a defined lower income bracket and the city sets that. When Cornerstones first came out, everyone was really excited because they're like, oh my gosh, $20,000. That's awesome. Like, that's a big chunk of change towards a project.And throughout my study, I actually found [00:08:00] that not a lot of people are using Cornerstones. They had the opportunity to apply and 75% of people chose not to. And,  reflecting on that. And crunching the numbers, I think is what makes it seem like a pretty logical choice to step away from Cornerstones.So ADUs in Edmonton due to function as a bit of a luxury rental, so you can pull in a pretty penny on a monthly basis. So if you are locked into a Cornerstones Program for five years, where you are forced to rent for a lower rate, It doesn't actually equal out. So you're actually, you could potentially be losing money in exchange for that about opportunity costs to not rent at typical rates for the five-year period.So we were seeing the cost benefit analysis that people were doing in their heads play out in that research. So Cornerstones isn't that attractive for detached accessory dwelling units. For secondary [00:09:00] suites however, it does make a lot of sense so that it also comes into play the cost of being at your building.So in Edmonton, a detached accessory dwelling unit averages around $180,000 to $200,000. Whereas the secondary suite, typically $60,000 to $80,000 to have a functional secondary suite. So as you can see, even from the sheer cost perspective, $20,000 towards a secondary suite can make a lot of sense. And they don't fu

[00:02:33] Kol Peterson: [00:02:33] Susan, come on out. Good morning. [00:02:37] Susan Brown: [00:02:37] Good morning. Good morning, Kelsey. Thank you. [00:02:40]Kol Peterson: [00:02:40] Thanks so much for joining us today. Susan, I'm really excited for this conversation. There's so much good stuff to talk about and I know that there's going to be a lot of good questions from attendees. [00:02:51]I've known Susan for  a few years and have collaborated she's also attended the ADU academy. She's very knowledgeable about a lot of things in the [00:03:00] financing world, but,  especially knowledgeable about ADU financing.  She and I are both in this coalition called the Build Small Coalition here in the Portland Metro area.[00:03:09]I'm just going to ask you to introduce yourself a little bit more. [00:03:13] Susan Brown: [00:03:13] Sure. Thanks, Kol. Appreciate it, and welcome everybody,  this has been a great resource for the last couple of weeks. Good way to spend some time and learn as much as we can from our colleagues and peers in this space.[00:03:24]I'm Susan Brown, Senior Vice President for Umpqua Bank. I run our construction and renovation loan production  for residential lending. I've been in the banking space for quite some time. I don't even want to admit how long, but a long time and got an interest in the ADU space before it was  a thing.[00:03:47] I was just talking with Kol a little earlier about this little home where my husband and I live is the garage space of what was going to be a 5,000 square foot chalet. And we ended up just building the [00:04:00] garage and that's where we live.  That was kind of my introduction to simplified life, less expensive living, and it's manifested now into bringing financing to Umpqua Bank and a little bit bigger way. So I kind of walk the talk, I guess you'd say, and have a deep passion for this kind of building. [00:04:23] Great. [00:04:24] Kol Peterson: [00:04:24] Thanks, Susan. And I keep on forgetting to mention this just program note. There's roughly 150 people on right now, just so people know, because I think only we can see that I just wanted to let you guys know how many people were on the webinar.[00:04:35] Okay. So Susan,  let's start by talking about the common ways that ADUs are  financed to get that topic out of the way, because that's not the focus of today's conversation. So can you tell us a little bit about that ? [00:04:46]Susan Brown: [00:04:46] Sure. I think it kind of starts with cash. A lot of people just dip into their own bank account and pay for the project as they go. Absent them, having [00:05:00] cash, a lot of people dip into the bank of mom and dad or other relatives who may be able to pitch into the project. Parent is going to be living in the ADU or another part of the house. It's not uncommon for that parent to contribute to the project as well. Some customers use a home equity line of credit where they can tap into the existing equity in their home and  hopefully that provides enough cash to get to the finish line on building the new addition to their property.  Moving into a brand new loan if it's a purchase transaction or a refinance loan, if they're trying to re-engineer their financing to use that project for financing.[00:05:45]And we'll talk a little bit more about that in the construction space  and how that all works, but there's a broad range of options available depending on the customer circumstances. [00:05:56] Kol Peterson: [00:05:56] So let's talk in broad strokes about construction and [00:06:00] renovation loans.  Most homeowners haven't used them before, so what are they and how do they work? [00:06:07]Susan Brown: [00:06:07] A construction loan is a very different kind of an animal and what a lot of people don't recognize. It's a, there are specialty products available for doing renovations in particular, those renovations potentially including adding an ADU to the property.[00:06:25] So the loan part of it, a lot of people are already really familiar with.  You apply for a loan, the lender looks at your credit, your income, the collateral that you're offering for the project, and they get approved and get their loan. What's added in a construction element is that we also look at the project and the builder to make sure a couple of things are happening. We want to make sure we've got a builder who is familiar with and has great experience doing the [00:07:00] kind of project where we're being asked to finance. And we also want to make sure that there's somebody who has managed their credit responsibly, paid their trades, their suppliers so that there doesn't end up being any liens against that property.[00:07:16] And then we also take a look at the full project and I'll add this is where there's the impression that it's difficult to work with a bank because we do look at a lot of those details up front and get the project very solidified before we ever start. And, and so that can be a little bit of a frustration where we're collecting plans and specifications and description of materials.[00:07:41] But all of that documentation is used for a couple of reasons. One, we want to make sure that we have a fully funded project when we get the loan in place. Is there enough money to build what you're trying to build? We also want to make sure that we have all of the materials accounted for. If you leave off [00:08:00] the cost of a foundation that can leave you a little frustrated without enough money.[00:08:04]And then we use those documents when we order the appraisal, because that appraisal is going to be based on an as complete value of the project. That's where, if there's not quite enough equity before the project, we're going to take into account the value that's added. And Abdur talked about some of those issues a couple of days ago.[00:08:26]But we do get to add whatever value that ADU brings, which allows us in some cases, to loan more money to get the project done. So all of those things we assume are going to be in place. Who've got credit, we've got a project, we've got a builder, an appraisal that comes in, we fund the loan and then the construction begins.[00:08:46] Over time we're going to do inspections and draws to pay the builder and trades for the work that they've done. That'll go through until the project is complete. And for our particular products that loan rolls [00:09:00] over to permanent financing without a new loan and the customer enjoys their home and lives happily ever after.[00:09:07]Kol Peterson: [00:09:07] The thing that I want to focus on today are the as completed value types of construction loans, as opposed to just being able to tap into what you currently have.  I might have a disproportionate interest in that particular topic relative to the number of loans that are actually done that way.  Is that nomenclature for as completed value loans that rely upon the competed value of the ADU, is that called something different than using current value than relying upon what your current market value of the real of the house is?[00:09:40]Susan Brown: [00:09:40] So I think what you're asking is what's that called in our world. We call it "As Complete Value". Some people would say finished value. The point for folks to take away. Is that we're going to ask an appraiser to look at that project as if it was already [00:10:00] complete. So when they're looking at the plans that may include that new ADU, we're asking them to compare that to other properties that also have an ADU. Hopefully we're going to get those comparables included in that report.  So whatever contributory value from a market perspective is added to the property, we're going to be able to add that to the value to loan against.  As Abdur talked about a couple of days ago, We coined it as cost does not always equal value.[00:10:33] So if an ADU costs $200,000, it may only contribute let's just say a $100,000 to the as complete value. But we would be able to then use that additional hundred thousand as we're calculating the maximum amount of loan that's available to the customer. [00:10:54] Kol Peterson: [00:10:54] So the next question was going to be how many ADU construction loans has Umpqua done, [00:11:00] but I want to be clear if you could at least try your best to tease apart what percentage of loans or how many loans have been resting upon that as complete value, if it's possible to do that, versus just, you know, HELOCS or other kind of conventional financing options that Umpqua might do for ADU construction.[00:11:17] Susan Brown: [00:11:17] Got it in my world. I only deal with the as complete product. Our division doesn't work with the HELOCs, so I don't have any data on that. [00:11:29] Kol Peterson: [00:11:29] That's great. [00:11:29]Susan Brown: [00:11:29] I wish that I did, because I think I know that there's a lot of customers who really do go out and get from a HELOC, but that's not, that's not my space.[00:11:38]My best estimate Kol is that we've done somewhere around a hundred, 125 of these loans in the last couple of years.  And they're done as an as complete appraisal, always. We've done them from brand new projects where there are subdivisions being built, where those [00:12:00] subdivisions include an ADU with the property. [00:12:03] We do renovation loans where customers are adding either an internal, an attached, or a detached ADU we've financed all of those. Additionally we've done some projects where the ADU is a modular ADU, not just site-built. Those are a little trickier because they have to be craned into the property as opposed to going through the setbacks or whatever access there might be. But all of those projects that we've done, all of them are on an as complete basis.[00:12:37] Kol Peterson: [00:12:37] I should get this one out of the way too, though, it was in my list of questions, which is what jurisdictions does Umpqua serve? [00:12:44] Great [00:12:44] Susan Brown: [00:12:44] que

Kol:   Joe Robertson and I have known each other for about a decade or so. And I learned about Joe because he was, you know, pretty involved with some ADU related conversations with the SDC waiver, which we'll talk about in a little bit more detail later. But he's also just notably the, one of the more prolific builders in the U.S. and definitely the most, or the most prolific builder in Portland. So, and the most experienced builder in Portland in terms of ADU development he corrected my marketing literature, which said he'd been building an ADU for a decade he's been building an ADU for two decades, which is very impressive given that it is, we're not really a phenomena two decades ago, at least in, in Portland. So so thank you for that correction. And it just goes to show how much Joe brings to the table. So we'll be fielding a number of questions from you guys that are just kind of all over the map in terms of design and build questions at the end today. So, and [00:03:00] Joe can answer any of these things jointly. All right. So Joe, please introduce yourself a little bit for the audience. Joe Robertson: Hi everybody.  I'm Joe Robertson, owner of shelter solutions been a builder residential construction for about 42 years and Portland for 29 years and building ADUs for about 22 years.So I'm experienced in all different types of residential construction from custom homes to production, and then of course, ADUs and other accessory structures for other reasons. So now the ADUs are pretty much all we do. Kol: How many ADUs have you built roughly in how many jurisdictions? Joe Robertson: We have someone ask us this question about well a month or two ago.And so we went back and counted. So we're finishing one next week and it'll be number one sixty nine, a hundred sixty nine ADUs . And primarily building the City of Portland but built some in [00:04:00] Clackamas county, Washington County, Tigard, and Tualitin,  but 98% in City of Portland.Kol: Yeah. Yeah. And and there's some, you know, I've mentioned that there's some really specific reasons why that's been the case that most people who are building ADUs are primarily building in Portland, but we're going to see that change probably with House Bill 2001, we'll see more market adoption in neighboring jurisdictions.But it's hard to find builders who have built in other jurisdictions around Portland at this point. Joe Robertson: Yeah. We're open to it, but we, we also need to gauge it by travel time and we  don't want to get further than about 30 minutes away in between projects and have to spend too much time on the road with the traffic situation here in Portland. Kol: I know when I think of the work that I've seen, that you do, I've seen detached new construction and I've seen bump out addition ADUs.  Do you also do internal ADUs [00:05:00] or other, you know, other forms of ADUs? Joe Robertson: Yeah. Yeah, we have we've completed a few basement conversions to ADUs and several attached ADUs, like you mentioned. The, you don't see the basement conversion so much, cause they're kind of harder to take pictures of.So I haven't posted any of those. Well, I think I do have one on my website, but we prefer to build detached standalone new construction  but also garage conversions. We do quite a bit of those and we like, we like garage conversions, but we're not opposed to basement conversions, but there's there's just a select few that are set up to where it can be done properly. So it's kind of limited. Kol: So prior to your decades of ADU construction experience, you did production home building. Can you talk about some of the lessons that you have brought to bear in  the ADU development, ADU  building space that came from your previous [00:06:00] experiences? Joe Robertson: Yeah, so years ago I was a, for many years in a custom home construction and in Ashland, North Carolina, and I noticed the other day you had somebody on your your listeners from Asheville, North Carolina.And I built primarily a timber frame homes, exposed, exposed, being construction and mortise and tenon, and post and beam construction but all types of residential custom home construction, each one designed individually. And then when I moved to Portland 29 years ago, I started working for a small builder developer that developed his own subdivisions.And we grew quite substantially over the 10 or 12 years that I worked for him. And Joel, you're one of the major builders in the area that wasn't a national builder and production. Hall's mostly mid price production homes. And that's where I kind of honed organizational techniques and scheduling and estimating and so forth.And so I've [00:07:00] applied both aspects to, to building ADUs. I, I, I like to say, ADUs are  like building a little custom home in somebody's backyard which it is to me, but we also use a lot of the principles that I use in production housing for organization estimating, scheduling, and so forth.Kol: Yeah. And I'll be prodding you about that process. Actually, let's just go into that. Can you tell us a little bit about the design build process that you use? And tips you'd have for other builders who are trying to adjust into this space. Joe Robertson: Yeah. So we, I started this system quite a few years ago.Well, actually when I started building ADUs, so  we'll go out and do a site analysis with the customer and just look it over, have kind of an informal meeting with the customer and give them our opinion, answer their questions. Then the next step after that with us is we do what we call a feasibility study.And in that we start with the [00:08:00] designs, whereas the design build part, and we, we also welcome projects from architects or customers that already had an architect and we've done numerous ones of those, but for the design build aspect we do a feasibility study and we start with the site draw site plan, determine the footprint and then work the floor plan off of that, and then develop it into exterior elevations.And there's a lot of back and forth with the customer during that stage, obviously, till we get to a point to where I say, are we close enough to where I can bid this out to all my subcontractors and suppliers, you can still move a window or change your cabinet plan and I do that a bit. I have  a system where I can send a bid package out plans and specs and do a real detailed cost estimate.And also during that time, we meet with the city over the counter in an informal review mostly with planning sometimes with structural and let them see what we're proposing to do and see if there's any issues so that we had them off before we actually apply for a building permit. [00:09:00] And we present that to the customer in a booklet form and also electronically.We charge a fee for that and when they sign up. So we try to answer all the major questions in that. And we also in designing try to design to meet their budget. And then the next step is up to them when they sign a building contract, we credit that fee against the price that we'd given them for the for the feasibility study.Kol: I think your, your feasibility study process is a good hook for getting new leads. For getting clients in your funnel, so to speak. Can you talk a little bit more about that? You know, roughly how much we're talking.  How in depth are these feasibility studies? As a point of reference, I do consultations for homeowners who are at the very beginning of the process before they've talked to a builder designer, I charge $200. No, you know, I don't do referrals. I just kind of give my own opinion of what their situation calls [00:10:00] for, what kind of builder they should look for, what should, and it's not really a feasibility study, but it's more or less my, my professional opinion of what they should anticipate the process looking like, but you're doing a much more in depth feasibility study.So let's, can you. Pull that out for us a little bit. Joe Robertson: So my first site, I call it analysis. First consultation is very much like your. It's  an informational thing, where you are answering questions basically, and sharing what's required by the code and so forth. And then the step further into the feasibility study, it gets pretty detailed and we spend a lot of time with the customer.And I don't mind saying it's on it's on my website. We charge $1,950 to do a feasibility study, which if a customer doesn't go through the building contract we've if I counted everything out, we've lost money, but. It's to cover us, hopefully part of the time, if it doesn't go through, but it's also, you know, to get a little commitment out of [00:11:00] the customer that we're going to do all this work for you.And, and if you decide you want us to build your ADU we'll, we'll give you that money back. It's built into the cost of, of the project. So it's worked out really well. And the conversion rate to that is, is pretty high. It varies a lot, but I'd say in the 70, 75% range converts to an actual build, Kol: The remaining 25%, you suspect they're going to other builders or they just not going forward with their ADU.Joe Robertson: I don't think I try to check up and I don't think I've lost too many to other builders. Like over the years, maybe. Two or three or four. Sometimes financing is the big holdup. Or  they just changed their mind or it's, it's a little too overwhelming, it's a big deal. So, and it's a long process. So some people just aren't totally cut out for it once they find out everything about it.But that's one of the beauties of the feasibility study. They definitely get their [00:12:00] money's worth out of it.Kol:  We should clarify that  when I've seen your feasibility studies they actually include preliminary drawings of the ADU  that you're talking about building. Joe Robertson: Correct. So we do floor plans. They're they're detail. I mean, everything's on the floor plans, except for all of the notes and stuff that you need to

Kol Peterson: Hey everybody. Thanks for joining us on the ADU Hour.  I am super excited for today's guest, Katherine Levine- Einstein.  This topic is  fascinating background about the way that land use decisions are made at the local level across the country and that has some important impacts in terms of understanding what advocates [00:03:00] for infill housing should consider doing strategically in terms of improving regulations for middle housing, ADUs, et cetera. Thanks so much for coming to join us today, Katherine, I stumbled upon your work through another podcast that I listened to. I want to confess right up front, I haven't read the book, but I wanted to take this opportunity to take some of the things that you've written about and researched and frame it in the context of some of the issues that come up time and time again with ADUs.Before I launch more into my questions, let me just give you a minute to introduce yourself. Katherine Levine-Einstein: Sure. So I'm an associate professor of Political Science at Boston University and I study Urban Politics and Housing Politics, and I'm one of the authors of the book "Neighborhood Defenders, Participatory Politics in America's Housing Crisis".Kol Peterson: Have you considered doing an audio book?Katherine Levine-Einstein:  It's definitely a great idea. I don't frankly know if the University Press has that kind of bandwidth. But yeah, I'm with you. Audio books are the way to go. Kol Peterson: Yeah, for me, it's just like how I [00:04:00] consume. So anyway, and this, this series will eventually become an audio podcast for what that's worth for people who are listening.So there's 19,495  incorporated cities, towns, and villages in the US, 310 cities with a population of  a hundred thousand or more. Neighborhood level politics, that is, city councils, associations. Play an outsized role in how land is developed in the United States. Americans like local democratic processes. So, why is this a problem? Katherine Levine-Einstein: Yeah. So democratic processes, I mean, you say that word, that sounds really good. Right? Like having land use be democratic? I think most people hear that, they say, "yeah, that's how it should be "people who live in a community should have a say over what goes on. And indeed, that's why we have these regulations in the first place. That when we sort of had a developer dominated system back during the Urban Renewal Days, a lot of bad things happened in neighborhoods.So there are sort of good reasons to have urban planning practices be really oriented towards neighborhood level [00:05:00] input. But in practice it can be deeply problematic because we may not be empowering a representative democratic subset of the neighborhood, right? What we show in our research is that the people who show up to these neighborhood level meetings are deeply unrepresentative of their communities in a way that actually depresses the supply of housing in the United States and the supply of affordable housing in particular. The people who show up to these meetings are privileged. They're homeowners, they're older, they're whiter, and they're overwhelmingly opposed to the construction of new housing.Kol Peterson: Let's frame your  research a little bit, so that we'll know what you did. And then tell us a little bit more about the numbers behind those findings of the demographics of people who actually show up to these meetings.Katherine Levine-Einstein: Yeah, so our book is about these participatory processes. You know, when we told people  we're going to go out and study neighborhood meetings at planning and zoning boards.  Really is that so interesting and important? But, I suspect I don't have to convince the audience here.  These are incredibly important, these meetings are what dictate whether or not housing gets built in most [00:06:00] communities in the United States.  So we really wanted to understand what happened in this sort of hyper-local politics. And so what we wanted to do is go out and document who shows up to these meetings and what do they say? And Massachusetts turns out, because of unique open meeting laws in the state, to provide an incredible opportunity to do so.So what we did is we went out and we collected meeting minutes for three years worth of meetings across 97 cities and towns in Massachusetts. And what made the data for Massachusetts really unusual is that in addition to including  a list of public comments that happened at these meetings, we were able to learn the names and addresses of the people who participated in these public forums.And when you have someone's name and address, you can link them with a lot of other administrative data and learn really interesting and important demographic information. So from those meeting minutes, we were able to learn how demographically and attitudinally representative the people are who show up to these public meetings. The first k ey finding that we had is that these [00:07:00] folks were privileged. They were about 25 percentage points more likely to be homeowners than the general population in their community. They were over 20 percentage points more likely to be over the age of 50. They were about 10 percentage points, more likely to be white, right?So these are folks who occupy positions of privilege in their communities. They also overwhelmingly do not like the construction of new housing. So we looked at public meetings that involved the construction of one or more units of housing. So we looked at everything involving meetings  had accessory dwelling units up to like big apartment complexes.And we found that only 14% of people showed up to these meetings in support of the construction of new housing. So, overwhelmingly the voices that planning and zoning board officials hear and that city councils hear, are people who are opposed to new housing developments. Kol Peterson: So 14% showed up in support of the projects and all the rests showed up as opposing the projects?Katherine Levine-Einstein:  Most of them, I think at [00:08:00] 65% showed up opposed, and the rest showed up as neutral. There were a lot of those neutral folks were in fact opposed, but they were sort of asking  clarifying questions about whether the developer had complied with parking studies or something like that.Kol Peterson: And then you took that data in your study and you contrasted it to legislative support for affordable housing so that kind of gives you a baseline of theoretically , this demographic should have one feeling towards affordable housing, but in practice when it comes to development in their own backyard this is what we see. So can you talk about the differences? Katherine Levine-Einstein: Absolutely. So another great thing about studying Massachusetts was in 2010, we actually had a ballot referendum about public support for affordable housing, so there's a piece of statewide legislation here in Massachusetts called Chapter 40 B, which allows housing developments that have a certain percentage of affordable housing to bypass local zoning regulations.And so this was up for a ballot referendum in 2010. And so it gives us a [00:09:00] rough sense in each city and town, the extent to which individuals support the production of affordable housing and  the ability to bypass local zoning to accomplish that goal. So the ballot referendum passed. So this law is still in place in Massachusetts.And what we found is in every single city and town that we studied, support for housing was higher as measured in this ballot referendum than it was when we actually went and looked on the ground at support from new housing at these planning and zoning board meetings. I think liberal Cambridge, Massachusetts is  the best illustration of this.So 80% of Cambridge, Massachusetts voters in 2010 came out in support of chapter 40 B. But only 40% of commenters at Cambridge planning and zoning board meetings show up in support of the construction of new housing. So when it comes to developments in their own backyard, the people who show up to these meetings are considerably more opposed to new housing.Kol Peterson: So what does this tell you about the disparity of those who are empowered to participate in local [00:10:00] zoning processes and the general ideological sentiment towards infill housing in general? Katherine Levine-Einstein: Yeah. I mean, what it tells me is that the people who show up to these meetings are not representative of their broader communities. And they're not representative in ways that are gonna depress the supply of housing. And it, this is really problematic, right? Because one, it's depressing the supply of housing relative to what the general public wants, right? Like if we sort of look at general public opinions, especially in these high costs, communities like Boston, San Francisco, Seattle, we see high levels of support for new housing, but when it comes to the housing actually being built in specific neighborhoods, when we empower neighborhoods to have a say over whether or not they want housing there, the evidence suggests that those neighborhoods overwhelmingly saying, "No thanks, we don't want housing".I sorta think the second important point timbers from our data, when we think about this broader housing politics is this is not just a story of people showing up in opposition to big apartment complexes, right? This is a story about people coming out in opposition for a townhouse or [00:11:00] accessory dwelling unit being built in their community.And so these neighborhood meetings get really contentious, not just when it's a big development, but sometimes when it's like a pretty modest one. Kol Peterson:  Can you explain the theory of Cost for Political P articipation in the process and let's cover both the expertise element of it, the time required element, then this theory of concentrated costs and diffuse benefits. Katherine Levine-Einstein: Yeah. Two big reasons that the folk

Kol : This is [00:02:00] kind of a interesting topic that is,  on its surface kind of a dry topic, but one that I think is really important for some big picture policy reasons. Just to set a little bit of a framework for why this topic is relevant.There's a direct correlation with where ADUs are likely to take off and an affordable housing crisis. So in areas where there's an affordable  housing crisis, we're likely to see ADUs. In areas where there's an affordable housing crisis, we're also likely to have stricter than normal rental regulations and therefore owner occupied properties, where people are prone to build  ADUs, all of a sudden they may, may maybe in statistically speaking, more likely to be subject to onerous rental regulation standards.So I wanted to have Kurt Lane on today to kind of go over some of these issues and how some of these rental regulations apply in Portland. So in any [00:03:00] event Kurt,  why don't I have you just give a brief introduction of yourself? Kurt: Yeah, sure. So my name's Kurt Lane, I've been a   rental property owner here in Portland and in Detroit, Michigan for the better part of a decade.I started Chroma property management at, towards the end of last year after,  spending a lot of time, self managing properties that I own and really just, I saw a need in the Portland market for really a more modern approach to property management. And also I saw a need or,  property management services for ADU and owner-occupied people because obviously that makes up a significant portion of our market here., Portland, I think is arguably the most heavily regulated rental market in the country. So property management then becomes,  pretty crucial here in order to help people navigate all of that regulation because,  penalties for being in  non-compliance can run into , easily into the thousands.So,  it's a full service property management company, but we do have a suite of services specific to ADU owners.Kol :  [00:04:00] So let's talk in broad strokes about the trends in terms of landlord tenant laws in West coast cities that are facing an affordable housing crisis. Can you talk about some of the big picture trends that we're seeing in those regards?Kurt: Yeah, so I think,  really this started in Portland  and really in other major cities over the last decade there was a really significant increase in the total dollar amount of money spent on rents and also on,  the percentage of rent increases. So in Portland, in particular,  2010 to 2015 they saw , over 20% increase in rents and significantly, there was a spike in 2015. Overall Portland saw a lot of economic gains in,  in the last 10 years. So it was a fast, fourth, fastest growing city , looking at income specifically, and  it was only behind Seattle, San Francisco, and I think San Jose . So Portland saw a lot of economic gains, but also saw , people feeling really [00:05:00] squeezed out of the rental market, especially with redevelopment and sort of,  inner Northeast and inner Southeast, which is,  sort of close in to our city here.That gave rise to the city, declaring a housing emergency in the fall of 2015 and the housing emergency . I'll just read the language really quick because  this language really then dictates the policies we're going to be talking about today. So the Portland city policy as of 2015, is that all Portlanders regardless of income level, family composition, race, ethnicity, or physical ability have reasonable certainty in their housing, whether publicly assisted or on the private market.And so this concept of reasonable certainty becomes very important. In defining how the city is going to implement a bunch of regulations. So primarily that's taken the form of rent control. So we have citywide rent control here in Portland. The state decided to then follow suit with the first statewide rent control legislation in the country.So that passed [00:06:00] last year. So at the state level, rents are capped at 7% plus the consumer price index annually. So this year it was 9.9%. Those rates are set every September. Portland also just incidentally has 9.9% increase year to year. So that was very fundamental shifts. Another big change was that there's this idea now of when a relocation assistance.So all of the things we're going to be talking about today, are  expansions of tenant protections in the market to try and guarantee some reasonable certainty. So rental relocation assistance, what that really means is now there's direct form of cash payments from landlords to tenants in the event of, excuse me, in the event of a no cause eviction or a rent increase over 9.9%.And then most recently as of March 1st, there's now these ordinances that are called the fair ordinances. One of those deals with screening criteria. So how you can evaluate tenants and the second deals with security deposits. So [00:07:00] what you can charge for security deposit upfront, and then also how the landlord and the tenant have to document the condition of the property throughout tenancy.And so what you're seeing these that's Portland specifically, but you've seen that replicated in Seattle. Obviously you're seeing that in California and LA and San Francisco and other communities there Seattle, this winter, the city council passed a resolution that you could not evict tenants during winter months.The mayor refused to sign that, but that's going to come back around. And I think obviously with everything going on now with COVID-19 and major economic disruptions, you're going to see cities,  make attempts essentially to guarantee housing for people. And so that's taking the form now in Oregon of there's a moratorium on evictions through the entire emergency and the state and city sort of,  big dictate when emergency period ends.Kol : It use are largely developed by amateur homeowner developers. And many of these homeowners are becoming landlords for the first time when they finish your ADU and [00:08:00] rent out the primary house or the ADU. So what are some best practices that you would like to convey to first time landlords? Kurt: I think,  really important to start thinking about the property, number one is an investment property. And, but number two also, as , you are providing , housing to people and there's a,  there's a great deal of responsibility that comes with that. And so that means that,  you need to have a legally binding lease. You need to have an application process that's equitable.You need to make sure that your screening criteria is documented. You need to make sure that how you go through the entire application processes is really well-documented. That basically you're you really in compliance with all these things. I mean, that's sort of legally, that's what you want to make sure of.I would also really advocate people , making sure you have the right insurance in place, so it's going to be a different type of insurance than you have for your home, for example . I'm a big advocate of people setting up LLCs for rental properties. I think there's a lot of protections that provides.[00:09:00] For a lot of people,  it's the first time doing this. And with ADUs, it is unique because,  typically the owner is,  intimately involved in the development of the construction of it, as well as opposed to somebody who goes and buys a duplex or a fourplex to get started.So I think you have to separate yourself from the process a little bit and start thinking about what are the steps I would, I would be taking if I had,  a standalone duplex or a standalone single family rental, and just really making sure you have everything in order to,  to be going about it legally and to really,  be taking on having tenants full-time. Kol : Do does having renters living on the same property, of  owner occupied properties, meaning an owner occupied property with an ADU or duplex or triplex provide any separate legal protections for landlords or for tenants that are not afforded to non-owner occupied investment properties and can you describe what these protections are? Kurt: Yeah, definitely. So in, in [00:10:00] Oregon, and I think you're seeing this , in other places where ADUs  becoming, an owner occupied, is becoming more and more prominent part of the mix of rental housing is, there's this trend towards creating a separate class of rental property.So a lot of times,  obviously ADUs  and owner occupied, they're,  they're treated the same as,  an apartment complex with a  hundred units or 500 units. But in other key areas, the city and state are differentiating  those types of properties. So the key things to think about when you're talking about ADU and owner occupied is the idea of the owner actually living on the property.So that means the owners that they're living in the house, which would be considered the primary dwelling or living in the ADU. It doesn't really matter, which just as long as you're living on both, if you're living on neither, then your property is just a rental property in the same way , again, a hundred unit apartment complex would be. It's treated the same legally. But if you are living onsite, which is obviously really common in the ADU world and [00:11:00] an owner occupied, in Portland and in Oregon, you are granted certain exemptions. So rental relocation assistance, which I talked about earlier that the direct cash payments and the, a bit of a no cause eviction or rental increase button 9.9%, that doesn't apply to ADU owners who live on site. They also are exempted from the screening criteria of the FAIR ordinance that passed. And what the screening criteria really was, was an attempt to standardize how tenants are screened and then also lower the bar economically to make,  a wider pool of housing available to people.So it used to be that. Tenants would have to show three times , gross income relative to the rent. And now that's been dropped to two times. Credit scores have been dropped. So I think it's 500 now crimin

Kol Peterson: We are jumping into the ADU Hour series with our guest,  Abdul Abdur-Malik.  Thanks for joining us today. It's going to be really good getting into some really technical, nitty gritty stuff that I think we're all learning about. There's no codified information about some of the things that we're covering next, we're going to be learning a lot together, so look forward to it. Alright, Abdur come on out. Abdur Abdul-Malik: Good morning, Kol. How you doing? Kol Peterson: Good man. Good to see you. Abdur Abdul-Malik: Good to see you. Kol Peterson: Thanks for thanks for being our guest today. I think a lot of people are going to be really interested in what you've been researching. Why don't we just start by having you introduce yourself to our group? Abdur Abdul-Malik: Sure. So my name is Abdul Abdul-Malik. I'm a certified residential appraiser, that's licensed to appraise in Oregon and Washington. I'm a board member of the local Portland chapter of the American Society of Appraisers. I serve as their secretary. [00:03:00] I recently completed my candidacy for designation, and I'm now a designated member of the Appraisal Institute, NSRA, and I'm also very active in teaching appraisal concepts. I assist a nationally recognized instructor, George Dell, occasionally when he comes to teach appraisers. And recently I've been really delving deep into ADU valuations. Kol Peterson: Thanks Abdur. So we're going to dive right in, tell us about a term that. I've learned from you "functional obsolescence" and its relative application to ADUs. Abdur Abdul-Malik: Sure. So to explain that I'm going to use basically what's known as the Bible for real estate appraisers is called the Appraisal of Real Estate. And I'm going to read from the 13th edition, a couple of concepts that are very important to understand when it comes to the valuation of ADUs.So depreciation is a word that many of us have heard. And the definition for that is "the difference between the contributory value of an [00:04:00] improvement and the costs at the time of the appraisal." So the costs may have been higher initially, but at the time of the appraisal, it may be less .And there are many different sources of depreciation. And one of them, the one that's particularly relevant for Ady evaluations, is the term "functional obsolescence". And, bear with me here, I'm going to read this definition, but it's very important for the understanding of valuations of ADUs. So it's the functional obsolescence is caused by a flaw in the structure, materials, or design of the approvement when compared with the highest and best use and most cost-effective functional design requirements at the time of the appraisal. A building that was functionally adequate at the time of construction can become inadequate or less appealing as design standards, mechanical systems, and construction materials change over time. Functional obsolescence is attributable to defects within the property in contrast with external obsolescence, which deals with conditions outside the property.And here's the key portion for ADUs' functional obsolescence, which [00:05:00] may be curable or incurable can be caused by deficiency, which means that some aspect of the property is below standard and respect to market norms. It is also caused by a super adequacy, which means that some aspect of the subject property exceeds market norms. So that last part is the most relevant for the valuations of ADUs. It's not that an ADU is a bad thing to construct. In fact, they're very useful and they serve many different needs in the marketplace, but because the general market expectation is that these structures would not be present in most single family, detached homes, it's considered a super adequacy. Now what's considered a super adequacy today may not be considered one tomorrow. And my suspicion is, is that as ADUs continue to gain a greater market penetration, and they become a much more important part of the housing solution, they may actually in some marketplaces, be considered a norm, and perhaps that functional obsolescence will go away. [00:06:00] So it's not "once categorized a functional obsolescence, always an obsolescence". It's just that at the current time, the difference between what you'll pay for it and what the value return will be at the time an appraisal is done. Generally, is less than what you put into the home.Kol Peterson: Now it's not just ADUs that have some degree of functional obsolescence using appraiser speak, but almost any home improvement would have some degree of functional obsolescence. What types of home additions add value for resale from an appraiser's perspective?Abdur Abdul-Malik: Well a lot of times the easy ones are like a kitchen remodel, a bath remodel. Sometimes if the home is indeed very small for the consideration of the market, sometimes the person may add more physical space, a living area, to their home, and that may bring their home up to market expectation for the typical size of a house in their market. ADUs aren't the only additions that may sometimes have [00:07:00] less of a return in value. A great example here in Portland is a swimming pool. In some markets, a swimming pool will add value, but I have done a number of appraisals where a swimming pool contributed $0 to the return of investment. In fact agents will tell me some times that a home that had a pool when it's sold, the next owner would just backfill it and get rid of it. So definitely EDU's are doing a lot better than swimming pools in the Portland residential market. Kol Peterson: I saw a new one last week Abdur that was pretty cool. A woman was buying a  high-end house in the West Hills that had a pool in a pool house and she was gonna convert the pool to an ADU.How's that for functional obsolecence? So how do ADU stack up relative to these other home improvements in terms of cost of construction versus resale value? So let's take kitchens, additions, garages. Abdur Abdul-Malik: Appraisers like to always hedge their statements by, "It depends". And so it really does depend on a number of different factors how they [00:08:00] stack up. We've all been to some kitchen remodels, maybe a friend shows you their kitchen remodel and you're just blown away. And you could tell that the quality and the craftsmanship is of high value and you would certainly expect in that case for high return then you've maybe been to a kitchen remodel where, you know, to put it politely, maybe it's "lipstick on a pig", right? And it just doesn't really give you the return that it could have otherwise have, if it had been done at a higher quality. So with ADU s, my research is showing that pretty much. Any ADU is going to give you some incremental boost in value. I have yet to do a valuation of an ADU where it was a $0 return, so that's the good news. When it comes to returns, it just depends on what your needs are for an ADU. Some people convert their basements into accessory dwelling units, and that can be a very cost effective way to get that ADU built for an inexpensive price. Others  maybe do a [00:09:00] garage conversion or maybe they'll do a stack on to a garage. And then of course the most expensive option would be a detached ADU perhaps in the backyard. Those can be very expensive to construct. And so the market return will be high on those, but not as high as the cost to construct. Kol Peterson: We're going to have you give like a 10 minute summary in a minute here, but I want to take frame that by just raising the fact that you've mentioned in the past that this research may not necessarily be applicable in other markets. Before we provide this information for people's contexts, I want you to explain that a little bit for us.Abdur Abdul-Malik: The general principles of valuation, they certainly apply nationwide, but I always caution people. The numbers that I present are for the Portland market and they may or may not be directly translatable to a different market. An example might be the Bay area in California where median home prices are like $1.5 million. So if I say this [00:10:00] type of ADU gives you a 10% bump. It may or may not correlate directly to that market just because the dynamics are so different. I do say that, but Hopefully especially in Metro markets that maybe their medium prices are very similar to Portland, maybe even the market dynamics are very similar.Hopefully the numbers actually would provide some meaningful insight into what you could expect in your own local market. Kol Peterson:  Unlike other days where we've just done a straight up interview for the whole time, I'm going to have Abdur do a 10 minute  version of a really rich study that he's been gracious enough to be working on for a while.Really just for the benefit of everybody who's interested in this topic. So I'm going to hand it over to you Abdur, take it away. Abdur Abdul-Malik: This is a, an adaptive presentation that I gave at a conference called the Build Small Live Large, and this is titled "Case Studies, Appraising ADUs".We're just going to talk about how this project got started super quick. As you know, Kol Peterson is the national ADU expert and he made available to me a list of 1500 legal [00:11:00] ADU properties. And that was very useful because  I took those properties and I went into the local MLS system, and I said, Hmm, which of these ADU properties have resold on the open market?  As you can see here in this slide, I painstakingly went through the entire list of properties, and I highlighted the ones that did sell. And the idea was, let's take a look at the city of Portland. Let's take a look at the properties that have resold and as you can see, quite a few of them have actually resold since the ADU was constructed. And then let's just do appraisals. On the ADU and the appraisal definition from the Appraisal of Real Estate, 13th Edition is "the act or process of developing an opinion of value". So

Kol: Here we are! Ezra, what's up, buddy? All right. Ezra: Cool. How are you? Kol: Good man. Thanks for coming on [00:02:00] today to be our guest on the ADU hour. So Ezra, we've been just jumping right into stuff pretty quickly, but let me just like, first of all, let me have you introduce yourself a little bit. I just, you know, briefly said you're with the Portland Home Builders Association. Tell us, give us a, like a, a one minute intro of who you are and how you came to be in the position that you're in. Ezra: Yeah, sure. And thanks for having me today. Really appreciate it. And so nice to see folks joining from all over the country and it looks like internationally too.Very cool. So I am a land use attorney by training. I practiced in Southern California, primarily in the Los Angeles region. My wife and I fell in love with beautiful Portland Oregon, as so many folks have, and we recently moved up here about a year and a half ago. And since that time I've been leading the efforts advocacy, lobbying, and education here at the home builders association of metropolitan Portland.We're a local HBA. There are chapters across the country and we engage with policymakers and decision-makers at the local and regional level [00:03:00] to help craft policies that are pro-housing, as we call them- kind of focused on allowing more housing, different types of housing, lower priced housing, housing that's accessible to all folks and you and I actually met because in my previous life, I was a big fan of yours down in Southern California.I actually have my copy of Backdoor Revolution right here. Highly recommend that everyone get one or get two. They make wonderful Christmas gifts and, and great gifts even in springtime. You'll notice that I have my sign here tab, so I will be looking for a signature next time I get to see you in person. But your book was actually an inspiration for a number of us who were working on ADU policies in the City of Los Angeles and in California, more broadly back in 20 15, 16 and 17, I, I saw you speak before I believe a Senate committee in California working [00:04:00] with one of our senators down there who was very interested in allowing for more ADUs. And we actually took a lot of your ideas and copied and pasted them into conversations that were being had in Los Angeles at the time. It was a pretty pitched battle in LA, as I'm sure practitioners who are joining us today from that area can attest to, and it actually came to a head at a point in time when the state kind of shrug their shoulders, said enough is enough and took away a local control for jurisdictions like Los Angeles that had really been recalcitrant in implementing a series of regulations that legalized ADUs. I think as many folks recognize that it's been a fantastic smashing success down there and throughout Southern California in all of California generally. And a big part of that is thanks to you and the work you've done advocating for and  educating folks about accessory dwelling units.Kol: Well, thanks for the I was more of a flattery than itself introduction, but I really appreciate it Ezra, [00:05:00] and yeah, I mean, that was kind of the goal of the book was to kind of lay out some statistically based evidence to back up some of the policy ideas that has been bantered around for a while and were just hard to kind of get enacted into local ordinances and then California in 2017, put forward this pretty aggressive legislation and then doubled down in 2018 or maybe I'm getting those wrong years wrong.But and that kind of set the pathway in terms of showing that state legislative approaches are perhaps not only a good idea, but maybe even a best practice as far as getting these types of updates done. The way I think about it now is, I mean, and I'm having firsthand experience with this in Oregon.Now I'm on rulemaking for HB 2001, but HB 2001, which we've talked about in a previous show. And we'll talk about more today and the California legislation. I would say [00:06:00] that it's not a unfair statement to say it was actually less work to pass the statewide ordinances than to pass the same kinds of ordinances at the local level. What do you think about that? Ezra: Yeah, I think you're hitting the nail right on the head there, Kol. You know, it's interesting to see States like Oregon and California borrow practices from States in the South and Midwest where this has been standard practice for quite some time. The devolution of complete authority to local jurisdictions to manage land use is not something that's practiced nationwide. It's something that's unique to a lot of high priced urban markets where there's been an expectation of extensive community engagement and feedback for  even the smallest projects, going back to the 1960s and seventies as a way to push back against some of the darker times of urban renewal.But in other parts of the country statewide regulations around housing are [00:07:00] pretty common practices. I often speak with my counterparts in Texas or Indiana who work on pieces of legislation that are total no-brainers but would be extremely difficult to get implemented at the local level. And, and they deal with it all at the state level.Just an example, Texas recently prohibited jurisdictions from putting in place material restrictions on houses that would kind of otherwise limit what sort of material builders could use in homes. Obviously they have building code standards there and they ensure material that they use is safe.But what we've seen a number of jurisdictions do up and down the West coast has kind of arbitrarily set standards and what can be used on houses. As a way to drive up the cost of housing kind of control the type of housing that can get built. And the cumulative effect of these regulations year over year are higher housing costs.So I think dealing with things at the statewide level makes a ton of sense. Although it's great to have community participation for many [00:08:00] things, when it comes to small scale housing, oftentimes we need to take a deep breath, step back, and really let policymakers shape a series of regulations that are going to open the door for housing. Because quite frankly, Kol, we've been failing doing that at the local level.There was a great report that came out in 2018 from Smart Growth America and ecoNorthwest here in Portland that highlighted the fact that since the great recession we've under built in Oregon, 155,000 units of housing as a ratio of household formation. I know for folks in California, that sounds like a drop in the bucket, but that's really impactful here in Oregon.And the same report showed that there's about a 6% increase in overall housing costs associated just with that scarcity. And so when we talk about tools to help craft housing that is more accessible to more Oregonians and more, more people, generally, we need to take [00:09:00] into account the fact that we have not been building enough housing and a big reason for the fact we haven't been building that housing is because local governments put impediments in place to inhibit folks from building.Kol: So  let's go back to HBA for a second to tell us a little bit about the organizational structure of HBA. You are in a local chapter. How are you connected to a national organization? Is there a national organization in DC and how do all those chapters play out nationally? Ezra: Yeah, sure. So the home builders association of metropolitan Portland, we're a member-driven organization. Our membership is primarily builders, developers, remodelers who build small scale single family and multifamily housing. Our folks generally don't work with steel. That's kind of the rule of thumb. So anything over four stories, our folks aren't building anything under that, they probably are. As well as all the trade professionals and suppliers , the legal folks, the engineers, everybody that's kind of in that universe of smaller scale [00:10:00] residential developments.Like you mentioned, we are a a chapter organization. So we work in partnership with the Oregon home builders association. They work down in Salem and we coordinate our efforts to advance kind of policy at the local regional and state level. And we're also members of the national association of home builders, which has a big honkin building in DC.You know, they're working on things like home buyer, tax credits ensuring that Fannie Mae and Freddie Mac are, are, are up and running effectively. But we, we don't, you know, we, we don't work with them on policy at the local level just because each jurisdiction is different. And we need to be crafting policies that are right for Portland and more broadly, right for Oregon. Kol: So  tell us about  the national structure of HBA in terms of the DC representation, national association of home builders. What's that? What do they do and how are you guys tied into them?Ezra: Yeah. So all of the local chapters are kind of members [00:11:00] of the broader organization, the national association of home builders, and they they do education, advocacy and lobbying at the at the federal level. So they work closely with HUD and secretary Carson. They work with congressional leaders.They've been actively engaged in conversations around the COVID-19 relief efforts and ensuring there's a appropriate number of dollars being dedicated to the triple P program to help our small businesses and ensure that they can remain viable during these difficult economic times. So they're doing grant work out of DC and, and we try to do good work here locally.Kol: So I wanted to dive into HBA's role with regard to middle housing legislation. So are we just really lucky to have you and your colleagues here in Portland who are doing middle housing type of advocacy and education in local jurisdictions around the Portland Metro area, [00:12:00] or is that a national policy that, that the national association of home builders i

Kol Peterson: [00:02:02] it's the man of the hour. I'm just going to quickly introduce Robert Liberty  a colleague and friend and we've been working and strategizing on ADU stuff together for a long time.  More closely in the last few years.  Robert was the head of the Portland State University's Institute for Sustainable Solutions and he focused that Institute's efforts on ADU related activities, which we'll be talking about momentarily. More recently Robert built an ADU in his house, so we're going to be talking about that, too. And also some of his previous experiences  related to land use legislation or land use law in Oregon, which is a really fascinating topic in its own right.  We'll be talking a little bit about the connection between the urban growth boundary policies. He's also a former elected official with Metro. So welcome Robert any opening remarks before we launch into some questions? Robert Liberty: [00:02:54] No, launch!. Kol Peterson: [00:02:56] All right. So we're going to start off by talking about the history of the urban [00:03:00] growth boundary a little bit, which I just alluded to. It's referred to colloquially locally as the UGB. So we'll, that's what we'll call it.A lot of people on the call might know what the UGB is, but in essence, every city in Oregon regardless of size has a urban growth boundary. And we're going to show off what that looks like in practice, but the regulation of housing is also part of the Oregon land use program. Can you tell us something about that, Robert?Robert Liberty: [00:03:24] Yeah, I think people don't know about the program other than we have urban growth boundaries, limit growth, somehow think that was going to limit the amount of housing production, but from the very beginning, one of the problems that was tackled by these laws starting 40 years ago was the zoning that limited housing choice to single family homes on large lots and often big homes.So right from the beginning, there was an understanding that if you're going to be more compact in your growth patterns you should also increase housing choices. And the supply of land was much less of a factor in the cost of housing than the regulations of [00:04:00] housing. So the same time urban growth boundaries were drawn starting at the state level, we went through every city and every urban part of every County and said look, "you've got a rezone land for apartments, for smaller lots, for duplexes, for townhomes, and that was accomplished largely in the 1980s. And it's made a huge difference. Kol Peterson: [00:04:17] So given that no other state in the nation has an urban growth boundary, does this concept even matter in this conversation about infill housing? Or is it kind of pointless to even talk about it because no other state has anything like it.Robert Liberty: [00:04:32] Well, actually, it's not true that no other state has anything like it. The state of Washington has urban growth areas and scattered across the country in places as varied as South Dakota and Kentucky,  in Colorado, you find urban growth boundaries, even though a little town and township in Michigan called Frankenmuth. And Lexington, Kentucky, and they won't call it this, but Sioux Falls, South Dakota has virtually the same thing. Ventura County Northern California. So there's, I don't [00:05:00] know, maybe 15 million people living in communities with urban growth boundaries. What I've found is all of them end up having the same elements and one of them is to change the regulation and zoning to allow more housing to be produced. Kol Peterson: [00:05:15] So it has some political relevance, at least in those areas. Robert Liberty: [00:05:20] Well, it has political relevance and I think there's real concern now and understanding about what housing regulations done to limited people's housing choices.And I think  that can be a starting point for talking about, "well, how do we grow generally?" And how does this connect to climate change? And maybe we can talk about that later. So it's a different political world than it was in the 1980s. We all know that, it's a different world than it was 20 years ago, but there may be an opportunity for change accelerated by the pandemic actually.Kol Peterson: [00:05:48] Yeah, actually, I'm going to do a quick thing here and share two slides that show and what an urban growth boundary looks like just as a really quick illustration of [00:06:00] what the urban growth boundary does. Robert can you just briefly talk about these two slides here. Robert Liberty: [00:06:04] Yeah. These are what are called figure grounds which are actually the black is the structure.And they were done by the New York times. They weren't done by anyone here in Oregon and this shows Portland metropolitan region. And the urban growth boundary is really obvious in this. It's not drawn in. It just shows how development has been made contiguous and more efficient.If you go to the next slide, this is the same kind of map from Charlotte, North Carolina, which is virtually identical metropolitan population, and a very similar growth rate. So you can see there's a huge difference. And this makes a big difference to the economy, to society, and to greenhouse gases and yes, it does connect accessory dwelling units. And we'll talk about that. Kol Peterson: [00:06:49] Great. Thanks.  So one of the things that I've observed as a resident of Portland for roughly a decade is that my perception [00:07:00] is that there's kind of a cultural, I want to actually have you check me on this, but my perception is there's this cultural acceptance towards infill housing and density as a result in part of the influence of the UGB, which was established in '73, and that's kind of inculcated itself into the culture and the ethos of Portlanders at least.Is that accurate?  Do you think, do you think that's accurate in terms of understanding the mentality of acceptance towards infill housing? Robert Liberty: [00:07:28] I think it is part of it because the arguments have been made for 40 years.  We've had seven ballot measures at the state level dealing with the planning program, for and against, and by and large, the public has reinforced it.And I want to clarify something because people get confused to hear about urban growth boundary for Portland. It's not an urban boundary for Portland is for the entire metropolitan region for 24 cities. And every city in Oregon has one. Antelope has a population of 50, it has an urban growth boundary. So this is widely understood as a basic strategy [00:08:00] of saving lands we need for farm and forest production and natural resources and being more efficient with taxpayer dollars as well. So yes, it has become, you know, I've back in the day when I took taxis home from the airport, I'm not making this up, taxi driver brought up urban growth boundary. So yes, it is part of the thinking, but I think the other part of that thinking is.There's some benefits about growing efficiently and using the structures and land we have that have nothing to do with saving farm and forest land, that are good in themselves. If our landscape looked like the moon, there would still be good reasons to do what we've done and to make it easier for people to have housing choices and reduce regulations.So, yes, I think there is a culture, but this is what I utterly reject, because I often do presentations and I show a picture of Oz and the characters from Oz and the background is Portland under these green towers. [00:09:00] So this is just wrong. We were so much like every other state in 1973. I mean, we were basically,  Columbus, Ohio with fruit trees and bracket fungus or sagebrush, depending what part of the state.And we became different by working on it. And it was very contentious, Kol, as you know, it's still very contentious in Portland. It wasn't easy and it's actually the fight over these things that helps people understand them. So other places say, "Oh, we couldn't do that it'd be too controversial." The answer is, "Yes, you can do it, yes it will be controversial and overcoming the controversy is part of the education process." So for those interested in ADU design so far, this. It was a bomb. So we get into the ADUs more, but you and I are both interested in the big policy setting for ADUs. Kol Peterson: [00:09:50] That's largely what I wanted to talk about with you is these policy aspects. You bring a lot to the table with these policy discussions. You have a rarefied set of skills and experience, [00:10:00] so we're going to focus on that. For several years you orchestrated a Sustainability Institute housed within PSU and focusing the institutes efforts on ADU production.Can you tell us about the initial goals of that program and whether it was successful? Robert Liberty: [00:10:13] Yeah. The Institute for Sustainable Solutions work on a variety of topics, but this was one and we picked it because it had a high profile. Thanks, in large part, to the work of you and colleagues of yours, like Eli Spevak and making this a big issue, even though ADUs had been authorized in Portland for 30 years, actually, and regionally for 30 years, not much production.So the idea was, can we look at all the barriers to production other than regulation and what can we do about cost financing, permit processing, site suitability designs and so on. So we commissioned some work and one set of projects were five standard designs for ADUs to serve different markets from smaller to larger.In fact, the center for Public Interest Design at Portland [00:11:00] State had a studio on that. And one of the designs is likely to be built now. That was one project, another was a survey of hundreds of ADU owners and tenants, and all the prior surveys that we were aware of interviewed only the owners and not the tenants.Another was some research into site suitability in the city of Portland, and then we convened people in finance to talk about how to  in

Kol Peterson: [00:01:38] It is Earth Day! That is exciting because for a lot of us the whole ADU movement is really around environmental issues or is precipitated by environmental issues.  It is for me. I didn't even realize it was earth day till,  Kelcy reminded me. Kelcy King: [00:01:56] Happy earth day, everyone. Thanks for  supporting this [00:02:00] content and  supporting Kol and all of our guests.  Kol Peterson: [00:02:02] So let's bring out Jake. Jake Fry: [00:02:03] I just want to, before we start to say, this is such a great idea. And I'm really honored to be asked to join in this discussion. I think it's really tremendous all the work you've done over the years.Kol Peterson: [00:02:13] Thanks man. Jake Fry: [00:02:14] Kudos to you. Kol Peterson: [00:02:15] Yeah, this is great. And I am honored to be able to pull this kind of thing together with people  your caliber,  to be able to share the wealth of information that you have. I've been just diving right into heavy material because that's what we're doing. Why don't I start by just having you do a one minute intro of you and your company and your relationship to ADUS?Jake Fry: [00:02:40] Sure. I will say, , And, and the immediate front , I think I'm most known for the running of my company, which I started in 2005, in Vancouver, Canada,  I think on some level, it's a different country and we have different dynamics that are happening here. It's a fairly small city. It's only about a million people, when you look at the greater [00:03:00] city. We really had a number of pressures on our urban environment and I was always enamored with the ADU form. And it was something that I was just drawn to. My background had been as a carpenter. Going back to that early two thousands, did this seem that something had to happen in our town that was going to be different. Land prices through speculation were just going through the roof. Housing, even at that point was an issue, it's even more so now. And there was issues of affordability and this urban growth and what the city was going to look like and how it was going to change.And for me, although there's never a magic bullet to these urban matters, the ADU makes so much sense. And I just basically stuck a flag in the ground and said, we're going to make this happen. And I worked really hard,  advocating for the built form. There had been some precedent from historical, little coach houses,  that existed in the city and some precedent through heritage retention that, that wasn't completely without example, but we were able to really push it.And by 2009 through [00:04:00] some pretty concerted effort around marketing and getting people on board, we actually got a citywide ordinance passed and opened up 70,000 building sites to ADUs. And since that time, , I think we've maintained sort of a leadership role. , certainly we're very, very active in advocacy as the built form is involved in the city.Personally our company's put in a little over 300 ADUs , and citywide we've certainly capped over 5,000 across the city and it continues to be a very strong  built form within this sort of spectrum of housing in Vancouver.Kol Peterson: [00:04:35] Wow. There's so many different things I want to ask you about now that I didn't even think about writing initially. So I'm just going to go in that direction for a moment. You just said that, the city of Vancouver has roughly 5,000 ADUs. Now, I think we should just do a little bit of myth dispelling about some of the numbers that are coming out of Vancouver.A lot of the documentation media coverage about the ADU scene in Vancouver says vast number [00:05:00] of homes have ADUs. So let's talk about the vernacular that's used in Vancouver and talk about the legal permitted secondary suites and the unpermitted secondary suites and just kind of help tease those different issues apart for us.Jake Fry: [00:05:13] A  hundred percent. And so, I think that's a great point you bring up, I mean, for us, a couple of things, what we immediately considered to be ADU is a standalone building in the rear of the property. And I know from our work that we're starting to do in California, the ADU also includes what we call a secondary suite.So going back to the eighties, certainly in the nineties,  land value starts going up in everybody. And his brother puts in an illegal suite in their basement. It's a very common built form. It took about 12 years for that to become a legalized citywide and so some of our numbers around ADUs include that. If you were to look at the city and to tease out those numbers, we have a city core , which is very urban and lots of towers and condominiums.And that's an ongoing concern, but about 85  [00:06:00] percent our land mass is a traditional single-family home development where we have, you know, kind of a grid pattern. Although we're hemmed in by mountains and ocean, we have a bit of a grid pattern. Those that grid has lots of laneways.Up and down those streets and varying sizes, we have single family homes. And so if you were to land here in 2000, I would say a large percentage of those homes, quite, quite big. We have a scenario where we have a basement suite. Some sort of rental unit within the home, that became legalized towards the late nineties, early two thousands.Subsequent to that, moving up to 2009, is when we have this rear unit that could then be legalized. In both cases, they were few and far between, where you have an ownership model with that built form, it's all rental where it would be commonplace in a block. If you were to go to a typical street right now, I would say  it wouldn't be uncommon to see half the homes having a basement suite , and maybe one or two of [00:07:00] those homes having a rear ADU.And if we were to tease that out a bit more, I would say we roughly have about 1% housing stock that gets torn down per annum, and rebuilt. And I would say over 75% of those new builds, which is somebody who's come in and whether it's for development or speculation, or just because they're building their dream home. They're putting a new house in the property. But 75% of those people will install a secondary suite in the basement and an ADU in the backyard because it's square footage that otherwise wouldn't be there.  There's no cost to it beyond construction.  And about 25% of the ADUs that go in, maybe even a little less, tend to be someone just going, "Oh, I need to house my kids or, my Mom and I are going to consolidate our properties and she's going to live in the backyard or I'm going to live in the backyard."So that's, that's kind of  the preview. What small works does. We only do the infield part of that, that market . Kol Peterson: [00:07:55] So when we talk about the secondary suites, [00:08:00] do you have solid numbers or a guess as to  actual permitted numbers, there are versus unpermitted secondary suites that exist?Jake Fry: [00:08:10] Well, there was an amnesty program. So if there's unpermitted, laneway, unpermitted secondary suites, I think they call them California they call them junior ADUs, they're going to be pretty modest.  No, I don't have those numbers, but that amnesty program has been extinct for a long time. As an aside, if you build a single family home, you have to put provisions for a secondary suite in the basement, even if you're going to use it for family use,  because rental is so rare here that they don't want to be in a position where they don't have that opportunity with future owners to have an ADU.Kol Peterson: [00:08:43] Dive into that a little bit more for us, Jake. So you're saying it's a building code requirement or planning zoning requirement that you must create a secondary suite ready lower level? Jake Fry: [00:08:53] A hundred percent.  If you're doing a single family home, you have to have some accommodation that in the [00:09:00] future, that rear unit or some part of the home could accommodate a standalone living unit. Even if it's not going to be at the original point of usage. . Kol Peterson: [00:09:11] And that's, that's a pretty, aggressive standard. I really like it. Do you know of any other places that are doing that? Jake Fry: [00:09:20] No. You know, and I have to say Kol, , and not to toot Vancouver's horn, but, , I think there's, there's a couple of things that are really different.And again, maybe I could use a comparison to California because we've been looking at the Bay area a lot, cause it's very similar. What we have here is  a different tax structure than you do in the States. Canada has a longstanding relationship, because it's part of the Commonwealth, with Hong Kong. I won't attribute it strictly to that, but there has been , in the last 25 years, quite a bit of, investment in property in Vancouver. And in the last 15 years, it's very speculative and because we have a different tax [00:10:00] structure than you do in the States, it's a really good place to legally shelter money with property.  They don't look at their global wealth. They just look at what wealth they have in Canada. And there's any number of drivers that makes it a very attractive place to invest money in real estate. And it's a very large community, a diverse community in Vancouver. So it was also an established community of Chinese origin. And so there was any number of driving factors that really in the end basically just took the land value in this, blew it out of proportion for what local economy would support. So by example , about 4% of the earners can actually afford a single family home. The top 4% of the earners can afford a single family home in Vancouver. So, you know, we have trouble attracting doctors because even at , a good rate of a surgeon, it's still pretty expensive to buy a house here.  There's lots of home ownership that's people having homes through family and so forth. But if you were to actually land in [00:11:00] Vancouver and trying to buy a home,  not conceivable, to be able to do tha

Full text of interviewKol: [00:01:48] I'm just gonna quickly introduce who Eli is. But not a really formal introduction. I'll let him do that. But Eli and I have been co-conspirators in a number of different initiatives and [00:02:00] activities and educational programs over the last decade. And so he and I worked together in a symbiotic way on a number of different things and not the least of which is we run AccessoryDwellings.org together, which is a volunteer run website.And Eli and I kind of started that and have been running it since for a long time. So there's a lot of things we could talk about. But first I'll just, have you just maybe briefly introduce yourself Eli to the group. Eli: [00:02:27] All right. Well, thank you, Kol and thanks for hosting this series. It's a great idea. I am currently sequestered in the common house for our community keeping as far away from my two little kids as I can, who are trying to homeschool. I started doing affordable housing development in Portland, about 25 years ago, originally in the nonprofit sector with Habitat for Humanity and some community-based groups and came to love the small homes that we were building and the market wasn't building small homes at all.And so for environmental reasons, and for affordability reasons, I got interested in accessory dwellings, which Portland allowed for a long time. But [00:03:00] weren't getting very many of them built. So I will jump forward to today where I am a developer and a general contractor. I built ADUs I worked with AARP to help launch them other parts of the country city and the state level, and done tours, the website. And I just, I geek out on them. I'd done condominiums where you solve them separately. I've tried to fuss around with them any way I can and just trying to get the new, more broadly available then they are today. Kol: [00:03:24] Great. Thanks, Eli. All right. So we're just going to jump right into the heavy stuff.Cause that's what I like to do here. So Eli, please,  udpate us on what's happening now in Portland and in Oregon at large, with changes to residential zoning standards. Eli: [00:03:38] Well, that's a short question. So I started one of the things I had, I also, where as I serve on the planning and sustainability commission of Portland that I chair and I led a group for a while before shifting roles to try and expand housing options in the neighborhoods of Portland.So Portland is going back over seven years now, we've been trying to update our residential zones so that instead of seeing these huge single family homes, 2,500 square [00:04:00] foot, or larger get built on single family, lots, there'll be other options of what we get built. And the residential infill project is an outcome of that.And also, pressure from neighbors to build smaller than because they're tired of the large homes getting built. This has been a very politically challenging process. And that means it's taken a long time. But the, the nugget of it is that Portland is now going to not let you build as large a structure on a lot, but there's going to be more flexibility about what happens inside that structure. And that would mean go up to two, three or four units on a lot, even six units. If there's some affordability component to them, it's gone through the planning commission. We monkeyed around with it quite a bit to staff's chagrin.And now it's at city council. And it was about to be voted on literally. It was on the agenda for city council when city council shut down for COVID-19. So, for a project has gone on this long. It's still not done yet. They're hoping that it gets done by the end of this fiscal year or the end of June.But in while this has been going through the State of Oregon passed a law, which requires every city in the state over a certain size to allow [00:05:00] duplexes on every lot and a single-family zone. And for largest cities, two three or four units or a cottage cluster allowed on any lot, somewhere in areas of the city.And that's a groundbreaking state law. I mean, frankly, Oregon is kind of a leader in state land use planning to have a pretty large role of the state in what can be built in, in comprehensive planning and what can be done in parts of the city. But this really, in some ways makes you think again, what single family zoning really means.It really says that if you're going to have large neighborhoods where historically you could just go to one house on a lot. That's just not going to be true anymore. You can still regulate the scale of the structures to make sure things are compatible, of the right sort of size and height and setbacks.Those all can be regulated locally. But you're not going to be able to let single family zoning become an exclusive way of keeping smaller households or lower income households out of a neighborhood. And I think that's a great leadership role the state's done. And because of that, actually residential infill project, called RIP, a terrible name for it, in Portland now [00:06:00] has a "RIP 2". Because it's the RIP that thing going through the political process thus far only adjusted the zoning in the closest neighbors of the city that are zoned for relatively high density, residential. You have other parts of the city that was zoned for one house for 10,000 square foot, lot or one house for 20,000 square foot, lot, which under new state law, we're going to have to be updated also to allow additional housing choices.And that process is just getting queued up starting this summer. Kol: [00:06:24] All right. So, in summary, for those who want the summary version, Portland is going to be allowing for up to four units on every residential lot. Meanwhile, Oregon at large is also going to be doing the same, at least in all large cities and Metro areas cities.So that's awesome. That's great. I love it.  But the big question for me is Eli. Like this is incredibly progressive. It's never happened anywhere as far as I know in United States and or maybe it has kind of historically [00:07:00] happened in cities, but in recent years, recent decades, it has not. But the question to me is, is there actually a market for this type of housing, so sure. We're going to allow it. That's great. But is anybody going to build these things? Who's going to buy this stuff? What needs to happen legally or with financial products for there to actually be a market for middle housing? Eli: [00:07:24] Well, it's a good question. I think that it will get used. I don't think it's going to be a quick change in what gets built in neighborhoods.We can go back to Portland and other cities before there was zoning. All kinds of residential areas of cities were up for grabs. You could build an apartment building, you'd go up single family house, a fourplex, any of those were options. And mostly people built single family homes. And I expect that even under these rules, mostly people build single family homes, but back in the day before zoning people also built duplexes, triplexes, fourplexes, courtyard plexes, and they mix them in and I think you'll see the same thing today. So, it means that in our [00:08:00] neighborhoods what are the housing types we're going to see? I'm guessing that you'll see people doing cute little cottage clusters.People like, especially on the West coast, they like single family detached structures. They don't like sharing walls, at least not yet. I grew up in Washington, DC, so I'm used to it in so many other expatriates, but historic Oregonians, like their own four walls. So, you'll see that you'll see townhomes get built.If you've got one close in lot in Portland, you'll probably see, instead of being one house, maybe you'll see three or four narrow townhomes sold, likely as condominiums. And that'll require a little bit of a climbing of a learning curve for the home builders. But they're already doing it, frankly.And I think that that will, that will continue. And I think the affordable housing non-profits many of them own scattered sites, single family homes, all over the city. And they've been looking to do something a little bit more with their property, and this will give them an extra bonus density to be able to build smaller, affordable homes in some close, in really fancy neighborhoods.Kol: [00:08:54] Although I don't think you mentioned this as what you thought a realistic or a common typology would [00:09:00] be, but let's talk about triplexes and fourplexes. Eli: [00:09:02] I think the way that Portland's rolling out the residential infill project, it really does a great job for corner triplexes or fourplexes, especially because you have lots of street frontage. You can have a 50 by a 100-foot lot. You can have four townhomes all facing a hundred-foot side of it with narrow backyards. It's a great housing type. And we already see some corner duplexes both this way, but under current rules, but this will expand the options. And I think it's, I think it's incredible. that Portland has come this long without having much townhouse development. It's not just good for smaller homes, but attached to homes of energy savings. And frankly, if you're trying to buy a house in Portland you're stuck. You want to buy a new house let's say, you're already priced out of anywhere within biking, distance of downtown by and large.So, people are going further and further afield. This will allow some of those folks to be able to land closer into the neighborhoods that they really want to be in. And they're sharing a lot with a couple other people, but people will definitely make that compromise. So, I think that there is a market for some attached townhomes for sale in Portland. And also, people will take their existing [00:10:00] houses, maybe then, you know, an 80-year-old house. And they will not only do a detached ADU in the back, but they'll do a basement in ADU as well. And they'll get a little, a supplemental rental income and provide some rental options in the

Kol: Hello! I'm Kol Peterson based out of Portland, Oregon. I'm author of backdoor revolution and host of the ADU hour, a podcast where we probe deep into ADUs and other small alternative infill housing, expansive and deep thinking about small infill housing is our jam. Kelcy: I'm Kelsey King and a credited ADU specialist in realtor, interested in creative solutions to home ownership. I specialize in supporting homeowners to purchase properties with ADUs or ADU potential for a variety of different lifestyles, including multi-generational living co purchasing as a strategy to enter the market for the first time and for rental income. Kol interviews experts in the ADU space. And then we take some questions from our live audience. Guests include prolific ADU builders, policymakers, architects, lenders, researchers, academics, appraisers, property managers, and more. [00:01:00]Kol: We get into the weeds on all of these topics and explore the edge of what is coming next with ADU trends, including middle housing policy and mobile dwellings. We cover topics from research that informs large-scale policies, valuation of ADU permitting and development costs to more obscure topics like ADU site planning software..Kelcy: This podcast series consists of episodes that are 30 to 50 minutes long and will be released weekly. We hope that you'll join us for this limited series and that you'll be able to put some of the things we covered to practice in your own community.