Anyone building-installing Accessory Dwelling Units (ADUs)?

Question

Looks like ADUs might be worth considering.  Interesting article;

http://www.buildinganadu.com/what-is-an-adu

Matthew McNeil · Answer

Amanda, yes indeed, Boise is hard to cash flow.  I'm getting ready to buy another SFH and the numbers favor doing so at this time, but the prices are increasing so fast that I need to consider other markets.  I hope you can find the type of lot you're looking for.  Please ping me if you do.  BTW - if you get a chance I'd recommend that you download Nampa's Master Plan.  Nampa is by default becoming a target city for investors due to the high prices in Meridian.  Nampa planners have specifically stated they do not want to become like Meridian and want to provide more affordable and smaller houses to the extent they've challenged builders to construct smaller houses.  You might consider Nampa.  Regards!

Account Closed · Answer

@Matthew McNeil keep an eye on the City of Boise's upcoming changes to their code.  I don't think anything is official yet but they are looking to widen the ability to add ADU's to houses.  There have been a lot of technical rules about how big, what features are allowed (i.e. kitchens) and whether the owner had to reside in the main house.  If the rumblings are correct Boise is looking to use ADUs as a way to get more affordable housing which may create opportunities to justify some of the higher prices out there.

We have looked at building ADUs for clients and they can be cost effective in the right location/situation.  As a side note - we find it cheaper to just build a new garage/unit rather than try and pop the top on an existing garage...

John Arendsen · Answer

Looks like the ADU solution is coming to a neighborhood near you in Boise. This cottage industry (pun intended) is fast becoming a major growth industry and is spreading like a wind fanned fire.

Matthew McNeil · Answer

Thanks for this Matt. I read the article and unfortunately the requirement for the owner to live on-site is a deal killer for me as an investor.  The council woman was quoted as saying, "[I hope] this will expand renting options around the city."  I'm curious to see how that plays out.  Boise and the surrounding bedroom communities are facing the need to change the housing situation or we're going to be faced with to many challenges to overcome for both investors and renters.  That's a precursor for another long post, but I'll leave it at that.

I'll just add that review of Nampa's Master Plan addresses this problem wherein they actually state, "We do not want to become like Meridian" (paraphrased)"; implying that Meridian got too big too fast and they missed appropriately addressing affordable housing issues before it got too late.  Again, fodder for another post....

Account Closed · Answer

@Matthew McNeil Check out the article below.  Boise has officially approved changes to the code for ADUs.  An ADU can now be 700 sf total and be up to 2 bedrooms (prior limit was 600 sf and 1 bedroom).  The prior standard required parking - now additional parking is only required if you go to 2 bedrooms.

The downside is that they left the requirement in that the owner must reside on-site (in the main house), so it limits usability as a pure investment/flip approach.

As @Teri S. says, it may be better to try and convert to a true duplex.  The code in Boise allows for a duplex on any lot zoned for single family (there is no need for a rezone, etc.).  The challenge is often more physical - how to split the house; do you add-on or just carve-up, and of course, is there sufficient space for all of this.

https://www.idahopress.com/news/local/boise-city-council-reduces-regulations-on-mother-in-law-suites/article_af524d2d-8bd7-5479-818b-c2ea3c67dc7f.html

Andrew Maxion · Answer

Hi @Matthew McNeil,

Excellent Article, and love the charts explaining the rise of permits issued through the years.I’m in the Bay Area, and the rise of ADUs this year has never been more significant, mainly because of the new bills that Gov. Newsom passed that made ADU building more relaxed.  There are a few things to consider when starting, and that is to decide which method of building makes the most sense. If you are looking for a cost-effective and quick turnaround, I would recommend going through a prefab solution. This allows you to control the cost because the unit is being built off-site in a factory rather than having a 12-month construction going on in the backyard. This helps eliminate unnecessary labor costs and avoid a lot of weather delays that can prolong an ADU project. Hope this helps and glad to discuss more!

Dean Anderson · Answer

Hi Matt,

Thanks for the article/update. That's great news. I was unaware of the parking rquirement changing. I thought that was likely to remain the same. My wife and I are looking at this as our primary strategy, and are currently designing a prototype. The owner occupancy requirement can be a deal killer, but in our case this is perfect for us.

Dean

Teri Feeney Styers · Answer

@Matthew McNeil I have converted 2 single family homes into multi-family and am about to start on a third. The first two I actually got true "duplex" status but this one will be an ADU. People love the concept for all sorts of living applications and it is so much cheaper than totally starting from scratch. It also tends to be "homier" than regular apartments.

Amanda Louise Sanchez · Answer

@Matthew McNeil If you ever want to meet up and compare notes, let me know!

Amanda Louise Sanchez · Answer

@Matthew McNeil Glad to hear you found a SFH that cash flows. We've had a hard time finding one due to our high amount of leverage. Did you find that home in Boise or are you investing in Nampa yourself? I'll definitely check out that Nampa Master Plan, thanks for the tip!

Anyone building-installing Accessory Dwelling Units (ADUs)?

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