Backyard cottages and in-law apartments breathe new life into existing homes.
It’s a new life that lets multi-generational families live together, seniors age in place, and owners on fixed incomes stay in their homes. Tucked into or alongside existing houses, these small homes—collectively termed accessory dwelling units (ADUs)—can meet evolving household needs and help families of all kinds find greater housing security. And by converting empty yards, basements, and attics into valuable living space, ADUs save modest, older houses from replacement by supersized McMansions.
Washington has a chance to let thousands of homeowners across the state breathe this new life into their homes. Last week, both houses of the state legislature advanced a bill that has the potential to be the most pro-ADU reform ever passed by a US state.
As lawmakers brush off the notion that re-legalizing small cottages is a dangerous new idea—rather than a return to the perfectly normal wisdom of our grandparents—let’s try to count the ways ADUs help hold families and communities together.
ADUs generate rental income, helping homeowners make ends meet
Rental income from an ADU can provide a relief valve for homeowners struggling to pay the bills. Throughout Cascadia, homeowners most burdened by housing costs include seniors, low-income families, and households of color. Almost one in three senior homeowners, and nearly 40 percent of Black homeowners, in Oregon and Washington spend over 30 percent of their income on housing.
Most owners put their ADUs on the long-term rental market, grossing an average of $15,600 per year. Twelve percent opt to use them as short-term rentals, mainly through AirBnB and VRBO. Airbnb estimates that short-term rentals bring in an average of about $11,000 per year in Portland and Seattle, though that figure may underestimate the income-potential of ADUs because the average includes low-rent shared rooms.
The flexibility to switch between long- and short-term rental gives owners additional financial security that helps defray the risk of investing in ADU construction. For example, an owner with a routine need to temporarily accommodate relatives can still earn income at other times by filling in the gaps with short-term rentals. Taking way that flexibility by banning short-term rentals in ADUs inhibits owners from building them—especially owners with limited financial resources.
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Loan payments, operating costs, repairs, maintenance, insurance, and taxes can take a big chunk out of rental income, perhaps as much as 50 to 75 percent. What’s left over for the owner depends, of course, on the specifics of the ADU in question. Most ADU owners can expect to net perhaps $3,000 to $8,000 per year.
ADUs give seniors options to age in place
Seniors increasingly report a desire to age in place—an aspiration jeopardized by housing expenses. Many seniors live on fixed incomes, and rising costs such as property taxes can push their budgets beyond the breaking point. Rental income from an ADU can mitigate that squeeze. Nearly 60 percent of senior AirBnB hosts report that the supplemental income from AirBnB allowed them to stay in their homes, including 13 percent who say it helped them avoid foreclosure.
ADUs also give aging owners the option to downsize out of their house while continuing to live on the same lot, in the same neighborhood. Owners who no longer need all the space in their house but don’t want roommates either can move into an ADU that provides them a private space, while it frees up the main house to generate rental income—usually much more rent than the ADU would have brought in.
What’s more, for seniors with health issues, ADUs can provide a home that’s physically accessible and private yet just steps away from support in the main house—whether that’s a relative or a professional caregiver. ADUs can even be custom-designed with on-site medical equipment. MEDCottage, in North Carolina, rents backyard cottages with wheelchair accessible showers and toilets, rail systems, and padded floors, for as little as $750 a month.
ADUs accommodate extended families
Some families want a backyard cottage or in-law apartment not as an income source, but as a means to live together. Nearly one in five US residents lives in multi-generational households. Such households might consist of grandparents who enjoy being around grandchildren, adult children starting out in a first job who haven’t yet established financial independence, or non-related housemates combining resources. Participants in a 2018 survey of Seattle low-income households said their top reason for wanting a backyard cottage was to house family and friends at risk of being priced out of their homes. ADUs not only offer members of these unconventional households better housing security, but also the combination of privacy and proximity.
The caregivers for seniors aging in place, as discussed in the previous section, are often sons or daughters wanting to keep parents nearby but also give them their privacy. Likewise, ADUs can be a good option for people who have relatives with physical or developmental disabilities and who want to provide them with a supportive home right next door. Marc Cote of Parkview Services, a nonprofit that provides housing for low-income people with intellectual or developmental disabilities, says that backyard cottages provide the perfect balance of accessibility and privacy for many of their clients, but that local restrictions often prevent his organization from building them.
ADUs ward off the McMansion wrecking ball
Some people worry that the opportunity to create ADUs could accelerate the demolition of older, relatively affordable houses to make way for expensive new homes. However, a City of Seattle study found the opposite: liberalizing ADU rules would reduce teardowns. Here’s why: when owners can add ADUs, it gives them a way to create new value on their properties without having to sacrifice the value of an existing house by tearing it down. Further, the Seattle study found that teardowns would also be less likely in low-priced neighborhoods with a high risk of displacement. When cities make it easier to build ADUs, it’s a win-win: fewer modest homes demolished, and more ADU homes that offer a cheaper alternative to detached houses.
ADUs alleviate displacement
Lastly, ADUs can reduce displacement and help stabilize communities for the basic reason that they provide more homes. Every added ADU home makes room for another family, and that takes pressure off the rest of a city’s housing stock, helping to ease prices and rents across the board. In growing cities with a shortage of homes, rising rents are by far the main cause of people losing their homes. What’s more, ADUs never cause physical displacement—homes lost to demolition—because they are added to existing houses. In fact, as noted in the previous section, ADUs can actually help reduce teardowns.
Accessory dwellings: the little homes that could
ADUs could help seniors age in their community. They could let families live intergenerationally. They could provide stability and security for homeowners. And they could curtail citywide displacement while reducing house teardowns. All told, ADUs could strengthen communities grappling with a housing crisis in cities large and small.
The key to turning “could” into “can” is getting rid of misguided local restrictions on ADUs that stymie their construction. Washington lawmakers have a chance to do just that by adopting statewide reform that would make it easier for homeowners to build ADUs.
Main downside of the ADU would be loss (teardown) of tree canopy, urban biodiversity, sense of place, neighborhood charm and livability. Possibly leading some folks to migrate to the burbs/sprawl, counterbalancing the benefits of other folks living closer to their jobs in the city. But hey, it’s all about trade-offs, right.
This gets rid of all those backyard trees, removes green spaces (see the picture with gravel where a lawn should be) and is detrimental to all of our previous rules to preserve green spaces and curb run-off. All those new roofs and walkways eliminate at least 60% of clean air in a city that already bans sunlight in the central core and is proceeding with removing any or all environmental safeguards. Just let the kids play baseball in the highrise apartment building or in the gravel lawn substitute.
There are times when I am glad to be old and the children have moved away.
It’s currently legal to build very large single-family homes that do all of the things that you mention, but you don’t seem to be as upset about that. Methinks your opposition was never really about green space or kids.
I too am glad you’re old, for obvious reasons.
“sense of place, neighborhood charm and livability”
For whomst? Surely the people who would live in ADUs would disagree.
If you’ve been following the housing debate for more than about a month, you’d know that these are hackneyed classist dogwhistles.
Granted the possibility of loss of +tree) canopy ‘might’ be an issue it if the percentage of ADUs that are new construction was high… But I would argue the rest if your ‘downside’ summary would not only be false, but might actually help your concerns.
Dennis in Michigan
Paul T CONTE
Who can argue against the list of ADU benefits that accrue to the property owner(s) who live on the same property? Certainly not I.
Oregon statutes currently require most cities to allow ADUs where single-family, detached dwellings are allowed. Good.
ORS defines an ADU as being used “as an accessory to” (duh!) or “in conjunction with (huh?) the SF-D dwelling. Not very clear, but OK.
Having the owner reside fulfills the ORS definition. Good!
Having an investor simply collect rent from two dwellings on a lot doesn’t. Whether or not some zones should allow two (or more) rental dwellings on a lot is a separate issue, but that does not meet any reasonable intent of an “ADU” use.
Unfortunately, the simple-minded HB 2001 would forbid any “owner occupancy” requirement, which means none of the benefits in this article would accrue when the site simply has two wholly independent, market-rate rentals.
ADUs — Yes!
Owner(s) living in one (or both) of the dwellings — Absolutely!
That was, in fact, the “perfectly normal wisdom of our grandparents.” And, that’s exactly how “ADUs [can] help hold families and communities together.”
David M Sucher
As to the “owner occupancy” requirement, it’s never been tested for Constitutionality by any Supreme Court but my guess is that it would fail. Probably will eventually.
Paul T CONTE
Can you support your supposition with any case law?
“Owner occupancy” is merely an element of a “use.” It’s mistakenly treated by opponents (and even some supporters) as a development criterion, which skews the analysis.
I’m reasonably familiar with the U.S. and Oregon’s “equal protection” clauses as applied to zoning (and CC&Rs), and I don’t see any basis for your supposition.
David M Sucher
You are correct:
The issue of “owner occupancy” hasn’t come before the US Supreme Court or to my knowledge any State Supreme Courts.
But the issue is discussed here and there….if you Google some key words such as “owner occupancy” and “constitutional” I think you’ll find some discussion. Here’s one for example:
The gist is that the police power footing land use laws is about regulating USES of land (and their associated impacts) and not the STATUS or TYPE of ownership. We ASSUME that there are disparate impacts of owner versus non-owner occupants but there is no data to back it up…plus, using a “least intrusive means” test, there are plenty of ways to police maintenance issues.
Anyway, I agree that there is no settled law but it’s my belief that if challenged, “owner occupancy” provisions would fail…..(yes I passed the Bar Exam.)
Paul T CONTE
The point is that “accessory dwelling” is a use. So what comprises “accessory”? While it may not be the only answer, an ADU used to support a resident owner by allowing a relative to occupy the ADU is definitely an “accessory.” Further, occupancy is present in the “B&B” use, and proposed HB 2469 explicitly requires owner-occupancy for a second dwelling. I would guess someone vetted this before it was submitted.
In the end, it’s pure speculation that “owner-occupancy” is unconstitutional, and it’s been in place for many years in many jurisdictions.
Paul T CONTE
BTW, I got a chance to read the entirety of the document to which you linked, and almost all of it is inapposite to the case for ADUs. To the contrary, at the very end, ADUs are distinguished:
“a number of courts have upheld the validity of owner-occupancy restrictions on specially permitted accessory apartment uses.”
Here is how I would distill the various cases:
a) It’s clearly constitutional to restrict a zone to a limited “use” of one single-family dwelling used exclusively as a residence per lot.
b) For such zones, it’s probably unconstitutional for government-imposed zoning regulations to prohibit an owner from allowing long-term renters from occupying an SF dwelling as their residence. In other words, the owner has a “use” of his property as one residence, but the law can’t force him/her to not allow occupancy by renters. (This leaves open the question of whether a collection of owners can agree to a CC&R contract provision that prohibits rental of residences.)
c) But in such zones, a jurisdiction can also permit certain additional, conditional “uses” of the property, by the owner, including B&B, home occupation, ADU or other; and therefore, as a conditional use, occupancy can be limited to (e.g.) a relative, an owner-occupant, etc.
David M Sucher
As I said Mr. Conte,
We don’t know yet and while we have prejudice, we don’t have any empirical basis at all to show that non-owner occupants cause more impacts than do owner-occupants.
Paul T CONTE
Actually, there has been at least one high-level decision contrary to your speculation: Utah Supreme Court, paragraph 13 of Anderson v. Provo City Corp. (2005):
“¶13 We reject the proposition that placing an owner occupancy condition on a supplementary accessory dwelling use constitutes an impermissible regulation of ‘ownership.’ Such a condition is not the type of ownership restriction that other courts have disapproved.”
David M Sucher
Bravo, Mr. Conte!
When and if the issue becomes germane legally, you will have a citation to offer.
However, in my reading, the decision is mere gobbledygook about the “character of single-family neighborhoods” and is bereft of any factual basis to explain why an ADU creates differential impact based on the type of ownership. There is just no there, there. Assertions without evidence.
Obviously, in the long run, and maybe best, we have to get rid of the owner-occupancy requirement by political means.
Paul T CONTE
Au contraire, Monsieur Sucher … “Bravo” to you for finally coming around to “no there, there” in your original attempt to make this a legal argument.
It is indeed a political decision, not a constitutional one; and therefore, decision makers can take into account what is plain before their eyes: Fewer problems arise with a rental dwelling, and when problems arise, they are more quickly and satisfactorily dealt with, when the rental is owned by a homeowner who lives on site, rather than with an absentee, investment property owner.
In some contexts, there may be little difference — for example, high-end neighborhoods. But the extreme is well-documented in UO area neighborhoods where the “ADU” option is widely abused by irresponsible, investment rental owners.
Bottom line: The State has no business assuming that a few “central planners” know best and preempting perfectly legal decisions on owner-occupancy by democratically elected local officials. Je suis désolé.
It clear to me that owner occupancy is a policy that is primarily based on discrimination against renters as a class of people. I don’t believe that US governments at any level should be in a position of enabling renter discrimination.
Given that nearly one third of Americans are renters it’s critical for the government to eliminate owner occupancy requirements.
Indeed, legal challenges to owner occupancy have won, finding owner occupancy to be non-constitutional: https://www.carolinajournal.com/news-article/court-sides-with-property-owner/ This ruling was upheld by the second highest court in NC.
Owner occupancy requirements (along with parking requirements) are what’s stopping me, personally, from building an ADU on my lot. While I intend to live in my home for decades to come, life has a tendency to throw curveballs. Career changes, family emergencies, or disability could force me out of the region or out of my house suddenly at any time and for an unknown length of time.
If I build an ADU with an owner occupancy requirement, that makes renting out my house impossible and selling my house much more difficult, should one of those life-changing circumstances arise. I’d either be faced with a much smaller buyer pool and lower sales values or I could have to decommission the ADU. Both options could cancel out the increased income from having an ADU in the first place. And besides, I don’t want to have to worry about these issues if I’m also trying to cope with a dramatic life change.
Without an ADU owner occupancy requirement, I can build an ADU and be assured that I will have flexibility in dealing with any unforeseen changes in my life and where I’m living, now and for years to come.
Paul T CONTE
Your story is one of many making a case for individual personal preferences and benefits, which I have no quarrel with your desiring.
But when you bought your property, you knew the terms of its zoning, am I correct? In any case, you made a decision which had implications for your use of the property, and you have no right to have a significant upzoning imposed upon other residents of your neighborhood, unless there is large agreement among all of you.
“Zoning and the Neighborhood Commons”
Then consider this, what if your immediate neighbors wanted to operate an AirBnB without living on-site; or a transitional home for child sex offenders who had completed their prison term; etc., I can probably make a case for why almost any use should be allowed next to your home.
This whole “I should be able to do what I want with my property” mentality works both ways, and your “reasonable” regulations may be unreasonably strict or unreasonably permissive to your surrounding neighbors.
There is, however, an ethical, fair and practical solution. Do as several hundred of my neighbors did; and go through a thoughtful, inclusive process to explore the advantages of revising the zoning code.
In my neighborhood, we (not our ill-equipped city planners) ended up writing code that allows at least two dwellings on most lots, with no owner occupancy requirement. We also allow duplexes, triplexes and fourplexes; as well as small lots, and lots accessible only from narrow alleys. You can read about it here:
Guide to the Jefferson-Westside Special Area Zone
So let me be sure I understand. You want Liz to go through a process to revise the zoning code, but you’re taking issue with the process currently underway to revise the zoning code?
Paul T CONTE
You’re so clever, that I doubt if you can “understand” since you seem to have ignored the obvious facts in front of you. I oppose dictating a zone change without a community process; I support a zone change when there’s general agreement arrived at through a community process.
Is that too hard to understand? Try a little harder.
We’ve heard this line before. We know it to be a charade. Back in 94, the present ADU laws were supposed to usher in a huge era of new building. In 22 years, about 1,000 units were built. 45 homes a year. That’s it.
You can eliminate all ADU regulations on the books, and you still won’t create this magic reform. The problem isn’t parking spots. The problem is a lack of demand. Just like duplexes/triplexes, the “missing middle” is a myth. It is missing not due to regulation. It is missing because nobody wants to live in it. All the supply in the world cannot induce demand.
Yet that is what this aims to do. Create housing that nobody wants to live in. Didn’t we learn our lesson the first time? Why are we wasting energy on already proven faulty logic?
This is empirically false, as the results of ADU regulation liberalization in Vancouver and Los Angeles show.
The missing middle is *literally* missing because of regulation. If you haven’t noticed, it’s pretty much illegal to build it in most of Seattle. And where it is legal, you’ll find that plenty of people are happy to pay a premium to live there instead of in suburban sprawl hellscapes. So much for lack of demand. What bizarro world are you living in?
Because what works in Vancouver and LA will automatically work here. I don’t live in those cities. I live in King County. The most relevant data is what has happened in Seattle. What world are YOU living in?
Bizarro am proper noun.
>The most relevant data is what has happened in Seattle.
That we didn’t liberalize ADU regulation, and as a result ADU permitting/construction hasn’t increased?
We changed nothing, and as a result nothing changed. Somehow you think this proves something.
How are things? I have been pretty involved in Seattle over the last 5 years working on DADU projects and the devil is certainly in the details of properly planning and executing these projects especially when adding essentially a new house to the existing exhausted utility grid.We have been developing Prefab units to help reduce the site disturbance which is another topic entirely.
I am curious if someone develops an DADU and something changes and the property cannot be owner occupied on any level is the DADU have to be decommissioned? I am also wondering when a property is sold that has an existing DADU on it would new owners need to reapply or show some type of proof of owner occupied property to keep the DADU?
Would love to catchup sometime!
I’m in a pickle . I worked 2 years putting together an ADU for my mom and I. Worked like a dog!!!
She fell while living with me and broke her hip and femur.2 surgeries later, she is guarded. She just got out of her wheel chair and walks very slowly with a walker. She has not done any stairs yet. The ADU is a split level with lots of stairs 8- 11 . She is in assisted living and is under quarantine since March, very fragile. My plans have changed . I have the upstairs rented out and it barely covers my expenses . I am helping her rehabilitate . I just rented out my place that I finished 2 weeks ago, downstairs.
Along comes code enforcement, now I have to sell it because I cannot live there right this second. She can get into my current place maybe… it has 3 steps, and I have a main floor bedroom and bath for her.
I need a break, I want to live there but I cannot right now . So what, I lose all my work and now must sell? I get taxed to death … what a flipping mess. I’d say less regulation. I have 2 super clean, nice tenants. Why do I need to live there and babysit them ? It is an over step. Life happens, we should not have financial hardship for our participation in an ADU .