Commissioner eased ban on tiny houses, RVs, but favors ADUs as pivotal for addressing affordability problem

COURTESY BUILDINGANADU.COM - A remodeled garage provides a new dwelling unit in Portland. Marshall Runkel, Commissioner Chloe Eudalys chief of staff, says one affordable accessory dwelling unit on every block could address Portlands housing crisis.  Portland city Commissioner Chloe Eudaly got a heap of praise — and some criticism — for her Oct. 16 announcement that the city will relax enforcement of its ban on living in tiny houses and RVs on private property.

But the commissioner views RVs only as temporary lodgings during the housing emergency, says her Chief of Staff Marshall Runkel, and tiny houses as a modest solution to the city's affordability crisis. Where she sees the most potential to address the crisis, Runkel says, is accessory dwelling units, particularly a pending proposal to allow two ADUs on many lots.

"We just need to ramp it up," he says. "The goal is let's not talk about hundreds. Let's talk about thousands."

If Portlanders could provide one affordable ADU on every block, Runkel says, that's 25,000 units.

ADUs — often called granny flats or mother-in-law apartments — are separate dwelling spaces often located in basements, attics, or converted garages. Others are separate cottages on peoples' lots, with up to 800 square feet of space.

Portland already is the national leader in ADU development, and basically allows one on every single-family lot. ADUs have provoked far less controversy in Portland than RVs, infill apartments and other proposed housing solutions, and they enable people to remain in close-in neighborhoods that are now out of many peoples' price range.

The city's Residential Infill Project, now being debated by planners and neighborhood leaders, proposes to allow one freestanding ADU plus another inside the home on single-family lots within a quarter-mile of a transit route or other designated areas. That would cover nearly 60 percent of all single-family lots in the city.

Why not try something new? Runkel asks, at a time when there's a widening gap between rich and poor.

"We have almost full employment in our city (while) the homeless population is increasing," he says. "That's crazy."

Backlash minimal

PHOTO: CORBIN CORBIN - Marshall RunkelRunkel says they received fewer complaints than expected after Eudaly's announcement that the Bureau of Development Services, which she oversees, will stop responding to most complaints about people living in RVs and tiny homes when they're on private property.

"People get it," he says. "Everyone understands that we need to do something."

And with ADUs, people can do something instead of relying on government to provide all the answers, he says.

Using his own house in Portland's Eliot neighborhood as an example, Runkel figures if he could get the financing, he could create one ADU inside his house and one in the yard, both for less than $200,000, with loan payments in the range of $1,500 to $1,600. Then he could rent out both units for $800 to $900 a month, enough to pay off his loan.

"It's absolutely a home run if you do that," Runkel says.

Some people complain that Portlanders are getting fee waivers to build ADUs and then using them as spendy short-term rentals via Airbnb. Those fee waivers, which are up for renewal in July, exempt ADU builders from paying system development charges, often saving them $15,000 or more.

Runkel says Eudaly will support the extension of the fee waivers only for people who use ADUs for long-term rentals. Another idea she favors: allowing limited property tax abatements for providing affordable rental properties, such as ADUs.

Knockdowns different

Many neighborhood leaders are critical of the Residential Infill Project, which also would promote duplexes, triplexes and other small apartment units, saying it will just provide more pricey housing beyond the reach of most renters.

Runkel says the notion that the housing crisis will be solved just by adding to the number of units for rent is "not in the vicinity of true." When you knock down existing homes and build new ones, that's not likely to lead to affordable housing, he figures.

Eudaly would like to make it harder to demolish homes, he notes, and that's one of the hot-button issues that have aroused neighborhood ire.

On the other hand, "Our office is supportive of loosening the rules to allow adapting existing housing stock," Runkel says, because converting existing properties into ADUs can be done in a more affordable manner.

His vision: Use lower-cost housing like ADUs to provide shelter for those earning 60 percent to 80 percent of median income. Then use government money to house those who are poorer, and require special services such as addiction and mental health treatment.

Financing roadblock

One of the huge barriers to new ADUs is the difficulty of getting bank loans, though Runkel notes there is promise from a relatively new loan product by Umpqua Bank. Ironically, banks are more willing to loan to owners of a tiny house on wheels, because the vehicle can be reclaimed if the borrower doesn't make loan payments. That's tricky when ADUs are inside someone's house or on a lot next to another house with a separate mortgage.

"People should be able to get a loan to get an accessory unit," Runkel says. He wants to explore a program similar to one used in California for clean energy loans, where lenders can get some security for their loan via the underlying property. The California program resulted in $3 billion in loans in the first two years, he says.

The new Bureau of Development Services director will create a team to develop some ADU proposals, Runkel says. The bureau also will work on building code issues so that tiny homes can become permanent housing.

Treating RVs differently

Tiny home experts estimate there are about 100 tiny homes inside city limits. The Portland Bureau of Transportation estimates there are between 650 and 750 RVs used for lodging on city streets.

RVs weren't built to be permanent housing, Runkel says, which is why Eudaly's staff views them differently than tiny homes. He also pointed out there are very different public opinions about the two forms of housing.

RVs "touch a nerve in the city," he says, in part because folks have been dumping decrepit ones on streets, abandoning them or allowing them to be used as long-term residences. "So, they've become a powerful symbol for people," he said, and it's generally a negative one.

The prevailing attitude toward tiny houses, which tend to be new, more stylish and made of wood, is clearly different. Runkel acknowledges there's a class difference at play in some cases. "The tiny house community has more resources than people who are living in an RV."

Eudaly would like to enfold debate over tiny house standards into the ongoing Residential Infill Project, because there are similar issues facing those housing types.

In contrast, the ban on living in RVs could resume when the housing emergency ends, Runkel says.

"I think the vision is that tiny houses become a permanent part of the landscape, and the RV stuff tracks more with the housing emergency."