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Sabina Chen lived in San Francisco, CA for many years, so she was very familiar with the concept of ADUs. However, most of the ADUs she encountered there were illegal mother-in-law apartments. By 2005, Sabina and her fiance Blake were living in the Portland area and the housing market was taking off. Blake and Sabina wanted “in on the game,” so they decided to purchase a piece of property with the capacity for a mother-in-law unit. However, they knew they didn’t want an illegal unit, and they weren’t sure what to call a permitted and rentable second unit.
“We started looking with our realtor for a piece of property with potential. We wanted an amenity like a view, a house the right size, with potential for a mother-in-law we could rent out. Thank God for Google because at the time the phrase ‘ADU’ was buried. You had to look for it. I eventually found a PDF about ADUs in Multnomah County. I think we’d already put an offer on the house!” – Blake Clark
Income potential was a driving factor for Sabina and Blake, but they also wanted to create a multi-generational housing option in case their parents wanted to live nearby someday. Furthermore, they appreciated the housing flexibility they would have if they owned two units. (They could, for instance, Own Two, Rent One as the Granger family does or Own Two, Rent Both as the Burkholder-Rich family does.) They decided to keep their options open because Sabina had applied for a position out of state. Portland is one of the few cities that allows homeowners with ADUs to rent out both units. They felt lucky that if the need arose they’d be able to rent out both their house and the ADU and return to one (or both) of the units someday.
“Our bottom line was that we wouldn’t create a space we didn’t want to live in. We didn’t know what was going to be in store for us. It could be an investment property. It could be our life-long home. By the time we wrapped up, we knew we were heading out. They’d just changed the rules to allow ADU owners to be landlords. This was a way of getting a duplex for the cost of a single-family. Of course, I was imagining it would take 3 months and a few thousand dollars…” – Blake Clark
Blake and Sabina’s decision to convert the basement instead of building a stand-alone ADU was cost-driven. They figured they’d be able to remodel a basement for far less money than it would take to build a backyard cottage. Unfortunately, Blake quickly learned that the little remodeling project he’d envisioned was going to take on epic proportions. His first clue was that the demolition phase, which was supposed to take a day and a half, took a full month.
“The biggest challenge was dealing with the space that we had. The previous owners had reduced the structural integrity of the house in significant ways. They took out bearing walls and replaced them with nothing. We planned to cut out just where we needed to. When we started tearing into it, it was a complete and total nightmare. Anyone who is remodeling a space, especially an older space, you can’t make any assumptions. We had to strip everything down and start from scratch, which was not the original plan. They had one bedroom downstairs and it had 13 different wall dimensions and no closet. I just sat down there and the one thing I said was ‘I’m not moving the bathroom.’ Well, in the end, the bathroom had to be moved. We wanted the view. We only had one wall of windows and it had the view of Forest Park, so we wanted to open up that south wall as much as we possibly could. Every singe interior wall in the existing basement was removed and the space was completely reconfigured. Two exterior walls also had to move because of the aforementioned structural deficiencies. It was a geometry juggling match.” –Blake Clark
An additional consideration in Blake and Sabina’s design was that they wanted the ADU to both function independently and be able to be incorporated back into the single family home if that should ever need to happen. They found that considering the basement a remodel of a single-family home had one big advantage over building a stand-alone detached ADU in the backyard.
“There are regulations if it’s going to be a rental rather than your own home. You can’t do electrical and plumbing yourself. So our electrical and plumbing permits were pulled as though we were doing a single family remodel of the basement. After all that was done they had to re-inspect with ADU goggles on. What it cost me was double-permits, because I had to pull permits twice. It amounted to a few hundred bucks more, but it allowed us to do the skilled trades ourselves.” –Blake Clark
Blake was handy, but he’d never worked with the city before, so he wasn’t sure what to expect.
“As a do-it-yourselfer, I really wasn’t sure what the reception would be with the building department. They really could have made my life difficult and pushed me, saying ‘you need a professional to do this.’ Just the opposite. They sat down with me across the counter with their calculator and helped me figure it out. I just can’t say enough about the Portland Bureau of Development Services. I literally could not have done it without them!” –Blake Clark
Building the ADU was a massive undertaking, but like so many do-it-yourselfers, it was only one of many things going on in their lives that year. In the middle of their remodel and basement-to-ADU conversion, Blake and Sabina also got married and prepared for their move to California. Needless to say, it was a busy year! The highlight of the experience was when they’d finished their remodel and got to show off the ADU to friends and neighbors who had been dubious.
“People who had seen the before in-person had wondered what the heck we were thinking when we bought the house. To see the vision become real and to get feedback was great! The best part was knowing what I started with and what I got to: the flow, how it feels when you’re in there, and enough interesting changes. I didn’t just make two square rooms and put a door between them. Compared to where I started, that was a miracle!” –Blake Clark
On the other hand, Blake and Sabina find they haven’t had many opportunities to show the place. Both the tenants of the primary dwelling and the ADU have been there for nearly four years. They’ve only had one turn-over since the ADU was created.
“It was nice to rent it at market rate and have long-term stable tenants who really enjoy the place. I do our annual walk-throughs and it looks great! The tenants have taken really good care of it.” –Blake Clark
In fact, the experience of creating an ADU was life-changing for Blake. He has gone on to pursue a career in sustainable building. His most recent project is a 6-unit housing project, which he and Sabina plan to move into along with their children. Now that he has more experience, Blake says if he had it to do over again, he wouldn’t have underestimated how much time, energy, and money the project would take.
“The ADU was a monster project. It was a year of my life. Once Sabina got the job in San Francisco I had to pretty much stop what I was doing – and it still took me 8 months. If I’d kept working and paid someone it would have cost about the same. It was a wash since we lost some income from me focusing on the ADU.” –Blake Clark
Fortunately, the investment of time and money is paying off via the income they’ve brought in from renting the house and ADU.
“In the mortgage climate today, when we went to refinance as an investment property it took a while. But the investment has been phenomenal. It’s probably our best-performing asset. We more than cover all the expenses with the rent. We’ve built up a sizable reserve for issues that come up. We’re not retiring on the income, but it’s been a good investment.” –Blake Clark
So what advice does Blake have for homeowners considering creating an ADU on their own property?
“As a do-it-yourselfer it’s the most difficult project you’ve ever undertaken, so make sure you have some back up. Also, Energy Trust of Oregon is a fantastic resource. I’d work with them again. LED lighting ended up costing me out of pocket as the landlord just $300 and we put in well over $1000 worth of fixtures.” –Blake Clark