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Rex Burkholder & Lydia Rich’s ADU: Own Two, Rent Both

Burkholder-Rich ADU

Burkholder-Rich ADU

Quick Facts

  • Setting: urban
  • Neighborhood: Sunnyside, Portland, OR
  • Type: stand-alone detached unit
  • Use: long-term rental
  • Square Footage: 600
  • Year Built: 2000
  • Owners: Rex Burkholder & Lydia Rich
  • Designer: Rex Burkholder
  • Builder: Nick MacDonald
  • Total Cost: $45,000

“It seemed silly to build a home for a car.” – Rex Burkholder

Rex Burkholder ADU from Porch

a view of Burkholder-Rich ADU from the porch of the primary dwelling

Rex Burkholder first learned about ADUs in 2000 when he was lobbying for changes in the Regional Framework Plan on behalf of the Coalition for a Livable Future. (You can learn about Rex’s current work on his website Getting to 2100.)

Rex and Lydia owned a house in the Sunnyside neighborhood of Portland, Oregon with a garage that was falling apart. They decided that rather than rebuilding “a home for a car,” they would create an ADU in their backyard. Not only would the ADU give Rex a chance to design a smart, small dwelling, it would also enable him to create an example of the neighborhood development for which he was advocating.

“I believe we were the first legal ADU in Portland. If not the very first, we were among the first few.” -Rex Burkholder

Rex Burkholder was inspired to create a home with cottage character

Rex & Lydia were inspired to create a home with cottage character

Inspired to create a home with cottage character, Rex began designing an ADU to replace the garage. His major design considerations were energy-efficiency, high quality construction, and fitting the ADU into the backyard optimally. Because Portland’s ADU design guidelines require the ADU to match the look of the existing house – including roof slope – Rex requested and received a waiver to change roof profile of the ADU.

Rex and Lydia worked with their builder Nick MacDonald to install low-flow water fixtures, extra insulation, and a thermally-isolated foundation. To maximize passive solar heat gains, they also used high-performance windows, paying special attention to south facing windows. They captured the heat from sunlight with concrete countertops, which add thermal mass so that house could maintain comfortable temperatures throughout the day and throughout the year.

“The highlight of my ADU build was building countertops out of concrete.” – Rex Burkholder

Because financing for ADUs was difficult to come by in 2000, the ADU was funded by refinancing the existing house and purchasing some of the materials on a credit card. The total cost came to $45,000.

“My favorite features of the ADU are the smart use of land and the creation of a cozy backyard.” – Rex Burkholder

Rex Burkholder Bike Storage

bicycle storage at Burkholder-Rich ADU

After building the ADU Rex and Lydia used it as a short-term rental and they appreciated the option to have visitors and family stay whenever there were vacancies. During the twelve years they lived in the primary dwelling and rented out the ADU, there were frequent interactions between Rex, Lydia, and their renters. They shared a courtyard and they sometimes shared meals. Tenants in the ADU took advantage of an outdoor storage shed if they had storage overflow.

“What surprised me most was how easy it was to ‘give up’ part of the land and some privacy. One of the key issues people have is ‘How is this going to affect my life if I have other people living on the same piece of property?’ We found it enriched our lives since we had neighbors we shared closely with. We had a friend who was ill and we let her live there for a year to help her out. It helps community in that way. Even when we were doing short-term rentals so that we could have it available for family most of the year, we had relationships with the neighbors in the ADU. ” -Rex Burkholder

Burkholder-Rich ADU Living

Burkholder-Rich ADU Living

Meanwhile, Rex and Lydia appreciated having the rental income which enabled them to pay off the cost of constructing the ADU. The ADU was a good investment and it’s doing very well in terms of return on investment (ROI).

Fortunately, Portland is one of the cities that does not have owner occupancy requirements for ADUs, so when Rex and Lydia moved across town three years ago to a new house they were able to rent out both the main house and the ADU as long-term rentals.

Rex found that the most challenging part for him was going through the permitting process. Although he was well-acquainted with local government, he found it was challenging as a homeowner to become a developer for the sake of this project.

Burkholder-Rich ADU Entry

Burkholder-Rich ADU Entry

“Back then it was very, very difficult to get permitted. I was doing it as a homeowner so every time I approached the counter I’d be talking to someone different. One person would say ‘You have to do this’ and someone else would say ‘No, you can’t do that! You have to do this.’ It was a new policy and no one knew whether we could – or should – share water, how we needed to get electricity to the ADU, or what to charge me for the sewer connection. I was there every week for six months. If I had it to do over again, I would have the contractor get permits. As a homeowner, it was very difficult. ” -Rex Burkholder

Having navigated the ADU permitting process in its early days, Rex has continued to support ADUs as a development tool to create walkable, transit-friendly neighborhoods. He has watched the ADU process become more user-friendly and Lydia and Rex’s son has followed in their footsteps. He owns a duplex and lives in the smaller unit while renting out the larger one.

So what advice does this pioneer ADU owner have for people considering creating an ADU on their property today?

“Go for it! Financially it’s a great return. ADUs increase housing affordability and availability. I write about how to make cities work better and ADUs are a part of that.” – Rex Burkholder

About linamenard

Hi. My name is Lina Menard and I'm a small house dweller, designer, blogger, and builder. I'm currently collecting ADU Case Studies for Through my company Niche Consulting LLC, I help people design and build the home (and life) of their dreams! I also tell my stories about simple living in small spaces - like a travel trailer, a yurt, a backyard cottage, and tiny houses on wheels - at Niche News.

8 comments on “Rex Burkholder & Lydia Rich’s ADU: Own Two, Rent Both

  1. cynthiachase
    May 23, 2014

    Great project. You have it captioned as an Irvington neighborhood project, but body of story says Sunnyside. Can someone clarify?

  2. linamenard
    May 28, 2014

    Hi Cynthia, thanks for catching the discrepancy. Rex and Lydia’s ADU is located in the Sunnyside neighborhood.

  3. 90seabreeze
    September 6, 2014

    In 2012 Charlotte, NC relaxed the law as well and I am doing the exact same thing!! I own two homes and rent 1/2 of mine and both the main house and the ADU at my other rental. I see no real benefit to restricting use based on owner occupancy and there are few locals that allow it. Glad mine does! Anyway congrats. Mine do exceptionally well since I leverage VRBO and specialize in extended stay.

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