A one-stop source about accessory dwelling units, multigenerational homes, laneway houses, ADUs, granny flats, in-law units…
Editor’s Note: photo credit goes to Christy Cassano-Meyer
“For us the primary motivator was a little unique in that we wanted to design and build this ADU as a family project, but it also made a lot of sense as an investment. We moved into the ADU and we’re now renting out the primary house.” – James Michelinie
James Michelinie & Kyra Routon first learned about ADUs when they were house hunting as newlyweds. They’d been renting a house in the Alberta Arts District for the past two years and they were looking for a property they could afford in a neighborhood they loved. They knew they didn’t need much space to start since it’s just the two of them and their two dogs. However, they wanted flexibility and room for their family to grow. Eventually, they decided to stay right where they were.
“We actually lived in this house as renters for two years, and then bought it from the landlord. So we were house hunting, but ultimately stayed where we were.” –James Michelinie
The realtor they had worked with suggested that the property made a lot of sense for an ADU. Kyra’s dad Steve is an architect who is familiar with ADUs, so after discussing it, the family decided to invest in the property and take on the project together. As they developed the design for a detached ADU on the back half of the property, they considered several factors. First and foremost, they let their stomachs be their guide.
“We’re very food-focused, we prioritized space around a kitchen that would get a lot of use. We have a large dining table that my brother made us.” – James Michelinie
James and Kyra prefer bright open spaces, so they focused on bringing in light and making the space feel as open as possible. James’ favorite feature of the ADU is the front window wall with its cedar arbor. The window wall faces south so as light moves through the space it creates a striking visual from both inside and out.
It was also important to Kyra and James to maintain a balance with the primary dwelling and to find the sweet spot where both the yard and the ADU were big enough. James explains that their biggest challenge in constructing the ADU was financing the project.
“Our mindset was more to just dive in and figure it out, as opposed to operating on a strict budget. We got pretty over extended financially. We were working 7 days a week and perpetually tired. We were fortunate to have so many resources available through business connections. The ADU cost approximately $90,000 but we invested a lot of sweat equity, so really it cost us $90,000 and a year of our lives!” – James Michelinie
When asked how they financed their ADU, James joked: “Is beg, borrow, and steal a category?” Then he explained the financial wizardry that enabled them to own their ADU:
“We did a lot of short-term moving things around and assumed we’d be able to refinance. We took out a zero APR credit card, short-term family loans, and pulled out of retirement funds. At the end of it all we reappraised property and it added $150,000 to the property. Based on increased value of the property, we were able to refinance. I don’t know that I would recommend that. If it hadn’t appraised high we would have been stuck. Paying it off from the rental income would be probably 4 years, but if I sold the house tomorrow it would sell for more than I paid, so I feel like it’s already paid for itself.” – James Michelinie
Kyra and James didn’t go out of their way to include sustainability features in their ADU, but as a 2010 DEQ studied showed, building small is the single best green building strategy. The ADU does include efficient windows and doors, but James points out that’s mostly required by code now anyhow.
Speaking of code, Kyra and James’ property abuts and alley and Portland’s ADU guidelines allow ADUs to be built at the edge of the alley, so they took advantage of that allowance. The property is a corner lot so even though the ADU is located in the backyard of the primary dwelling, it fronts on a different street, which makes it feel like a completely separate property. James says the highlight of the project was going through the design-build process together as a family.
“Spending the time building together was definitely something I’ll remember. We made a lot of connections in the neighborhood. That was an unexpected benefit. We had a lot of neighbors work with us on small tasks. That was really nice.” – James Michelinie
James and Kyra have found that their immediate neighbors aren’t the only ones who are curious about their ADU.
“I didn’t anticipate the interest and engagement in the local community. Because it’s a bike boulevard and we’re so exposed, any time there’s a sunny day we have 10-20 people per day who stop and look at the house. They can’t tell because of the reflective coating on the windows that we’re right here. We feel a little on display sometimes.” – James Michelinie
Kyra and James’ plan was to live in the ADU and rent out the primary dwelling, eventually switching to renting out the ADU and living in the primary dwelling.
“The plan pretty much from the start was for us to live in the ADU. Once we start a family we’ll probably move into the big house and rent this one out. We don’t interact with the tenants very regularly. It’s a separate entrance on a separate street and the yards are separate. It operates like a separate house. We check in as landlords. Once we start a family then it will serve as a great rental income.” – James Michelinie
For right now the ADU is serving James and Kyra’s needs very well, though James says if he had it to do over again he would have planned for more storage and a mudroom. He wishes they’d considered a crawl space or additional space that could turn into a closet.
“We didn’t plan for muddy, rainy winters. We took our mudroom for granted. Now we walk right into the living room with wet shoes and wet dogs. The space is more limited, but I’m happy with that compromise. I like that we’ve simplified a little bit, I like being able to proclaim that two people are happy in such a small house. And I like the income from the primary dwelling.” – James Michelinie
James and Kyra are pleased that they created long-term flexibility for themselves by creating their ADU, but they haven’t quite recovered from the build.
“If I knew then what I knew now I probably wouldn’t do it again, which may sound strange as much as I compliment it, but it was incredibly difficult, the financial and physical stress. I would put a lot more effort into budgeting. We were smart and experienced people and we were way off. We changed the scope and it really added up. Be realistic about expectations and planning.” – James Michelinie
On the other hand, James says he and Kyra have learned so much from this experience that they are tempted to put the knowledge to work for them.
“We’re already kind of talking about doing something else, but we’re considering keeping this property and buying a different property. Even if we didn’t want to live in either one we could rent it out. We’re near Alberta and it’s a desirable area to rent.” – James Michelinie
So what advice does James have for homeowners considering creating an ADU on their own property?
“Be honest about what your goals are and what you can truly afford. My permits and foundation cost nearly $20,000. A lot of people have an unreasonable estimate about how much it will cost. I took Kol’s ADU class and that’s the perfect place for someone who wants to know about whether or not it’s attainable.” – James Michelinie