HomeMy WebLinkAboutAgenda Packet 2-20-19 Work SessionFebruary 20, 2019, Work Session
EUGENE CITY COUNCIL AGENDA
February 20, 2019
12:00 p.m. CITY COUNCIL WORK SESSION
Harris Hall, 125 East 8th Avenue
Eugene, Oregon 97401
Meeting of February 20, 2019;
Her Honor Mayor Lucy Vinis Presiding
Councilors Betty Taylor, President Emily Semple, Vice President Mike Clark Greg Evans Chris Pryor Claire Syrett Jennifer Yeh Alan Zelenka
12:00 p.m. EUGENE CITY COUNCIL WORK SESSION
Harris Hall, 125 East 8th Avenue
Eugene, Oregon 97401
1. WORK SESSION: Regulation of Secondary (Accessory) Dwelling Units and
Consideration of Remand Issues (Ordinance Nos. 20594 and 20595)
February 20, 2019, Work Session
For the hearing impaired, an interpreter can be provided with 48 hours' notice prior to the meeting. Spanish-language interpretation will also be provided with 48 hours' notice. To arrange for these services, contact the receptionist at 541-682-5010. City Council meetings are telecast live on Metro Television, Comcast channel 21, and rebroadcast later in the week. El consejo de la Ciudad de Eugene agradece su interés en estos asuntos de la agenda. El lugar de la reunión tiene acceso para sillas de ruedas. Se puede proveer a un intérprete para las personas con discapacidad auditiva si avisa con 48 horas de anticipación. También se puede proveer interpretación para español si avisa con 48 horas de anticipación. Para reservar estos servicios llame al 541-682-5010. Las reuniones del consejo de la ciudad se transmiten en vivo por Metro Television, Canal 21 de Comcast y son retransmitidas durante la semana.
For more information, contact the Council Coordinator at 541-682-5010 or visit us online at www.eugene-or.gov.
February 20, 2019, Work Session – Item 1
EUGENE CITY COUNCIL
AGENDA ITEM SUMMARY
Work Session: Regulation of Secondary (Accessory) Dwelling Units and Consideration of Remand Issues (Ordinance Nos. 20594 and 20595) Meeting Date: February 20, 2019 Agenda Item Number: 1 Department: Planning and Development Staff Contact: Alissa Hansen
www.eugene-or.gov Contact Telephone Number: 541-682-5508
ISSUE STATEMENT This work session is an opportunity to provide direction regarding the City’s response to a State Land Use Board of Appeals remand of Ordinance Nos. 20594 and 20595 that were adopted by City Council in June 2018 as the first phase of the City’s response to the accessory dwelling unit requirements of Senate Bill 1051. The remand nullifies the ordinances and refers the matter back to the City Council with instructions for re-adopting the ordinances. In response to LUBA’s remand, the City Council is asked to consider the existing land use code’s secondary dwelling regulations as directed by LUBA. Council’s discussion at this work session will assist in staff’s preparation of an ordinance that can be addressed by the community at a public hearing.
BACKGROUND In 2017, the Oregon Legislature adopted a new law, Senate Bill 1051,1 as part of its efforts to promote housing affordability statewide. Pertinent to this work session is the portion of the new law that addresses “accessory dwelling units.” The new law defines “accessory dwelling unit” as an “interior, attached or detached residential structure that is used in connection with or that is accessory to a single-family dwelling.”2 It requires: “A city with a population greater than 2,500 . . . shall allow in areas zoned for detached single-family dwellings the development of at least one accessory dwelling unit for each detached single-family dwelling, subject to reasonable local regulations relating to siting and design.” In January 2018, the City Council initiated a two-phased approach for land use code changes to implement this new law. Phase 1 would address the new law’s requirement that the City allow accessory dwelling units in more areas of the City (the “where” phase). The intent was to address,
1 The relevant sections of Senate Bill 1051 are now codified at §197.312(5) of the Oregon Revised Statutes.
2 Eugene’s code does not refer to accessory dwelling units. Under Eugene’s code, there are two different types of accessory dwelling units. Depending on the applicable zone, an accessory dwelling unit might be allowed as simply another one-family dwelling on a lot, and/or it might be allowed as a “secondary dwelling.” A “secondary dwelling” is defined as “a dwelling unit that is located on the same lot as a primary one-family dwelling that is clearly subordinate to the primary one-family dwelling, whether a part of the same structure as the primary one-family dwelling or a detached dwelling unit on the same lot. Either the secondary dwelling or the primary dwelling must be occupied by the property owner.”
February 20, 2019, Work Session – Item 1
as a later Phase 2, the new law’s requirement that accessory dwelling units be subject to only “reasonable local regulations relating to siting and design.” The two-phase approach was intended to allow emerging conversations around housing affordability to evolve, and to consider potential changes to those regulations in the context of a broader planning effort (the “how” phase). In June 2018, City Council adopted Phase 1 ordinances that revised the land use code to allow accessory dwelling units in additional zones (R-2 Medium Density Residential, R-3 Limited High Density Residential, R-4 High Density Residential, AG Agricultural, S-E Elmira Road Special Area Zone, and S-HB Historic Blair Special Area Zone). The Phase 1 ordinances also adopted the new law’s “accessory dwelling” terminology. Notably, the Phase 1 ordinances made the accessory dwelling units in these additional zones subject to development standards that were already set out in the land use code for secondary dwellings in the R-1 zone. The Phase 1 ordinances were appealed to LUBA by numerous parties. LUBA sent the Phase 1 ordinances back to the City Council for additional work. LUBA found that the Phase 1 ordinances were inconsistent with the new law because, even though the ordinances did not change any of the development standards for secondary dwellings in the R-1 zone, the ordinances did extend the applicability of those development standards to the additional zones. To do so, LUBA found that the City needed to determine that the existing development standards are “reasonable local regulations relating to siting and design,” as the new law requires. This means that Eugene will not be able to take a two-phased approach like the one originally proposed. 3
Until the City Council takes the actions ordered by LUBA, when someone applies to build an accessory dwelling unit, City staff must apply the development standards applicable in the zone and attempt to justify the development standards as “reasonable regulations relating to siting and design” without the benefit of any City Council direction. Based on the range of legal challenges already being presented, the City should expect more legal challenges in the coming months. The City’s action on the LUBA remand is a chance to examine—and potentially change—development standards that the appeals and public input have suggested may be inconsistent with the new law.
Work Session The key outcome of the work session is council’s input as to how the accessory dwelling unit development standards should be treated in the remand ordinance to be prepared for public hearing. To help council efficiently address the development standards, staff have organized the standards into three groups that are identified on Attachment A to this AIS:
Group 1: Denoted with a green symbol on Attachment A, staff believes these regulations comply with the law requiring “reasonable regulations relating to siting and design” and should be retained in the proposed ordinance. The proposed ordinance will include no reference to the regulations that are retained, except that an exhibit to the ordinance will include findings explaining the basis for their consistency with the new law.
3 Per council direction, the 2018 ordinances did not make any changes to the allowed uses in the S-JW Jefferson Westside or the S-C Chambers Special Area Zones, where accessory dwellings could be sited through code provisions that permit two single-family homes on a lot. Since the ordinances did not make any changes in those zones, LUBA’s rules prohibited it from considering challenges to the development standards in those two zones.
February 20, 2019, Work Session – Item 1
Group 2: Denoted with a yellow symbol on Attachment A, staff requests City Council discussion of these regulations due to uncertainty of the regulations’ relationship to siting or design, or its reasonableness. While staff attempted to identify the relationship of each to siting or design, council should weigh in on that question. Staff is seeking council direction as to whether the regulation should be moved into the green group or into the red group for purposes of preparing the remand ordinance for public hearing.
Group 3: Denoted with a red symbol on Attachment A, staff believes these regulations will be found by a court to be unrelated to siting or design, or to be an unreasonable regulation. For that reason, staff recommends that the regulation be shown as eliminated from the code in the proposed ordinance and recommend City Council carefully consider public testimony addressing the regulation for its final decision. The intended process for the work session is to first discuss, if needed, any items council wishes to specifically address from Group 1, then to discuss each regulation from Groups 2 and 3 with a straw poll to clarify council’s intent with respect to each of those regulations. The attached matrix (Attachment A) addresses the regulations raised in the LUBA appeal and includes a brief summary of each regulation, applicable Eugene Code sections, and an initial staff evaluation as to whether it relates to siting or to design, and the City’s policy reason for the regulation. The policy reason for the regulation is intended to assist council in considering whether the regulation is reasonable. The terms “reasonable,” “siting” and “design” are not defined in state law or in the Eugene Code, nor is there any useful textual, contextual or legislative history of the terms associated with Senate Bill 1051. In these circumstances, the City Attorney’s office recommends the council use the same definitions a court would use, those from the Webster’s Third New International Dictionary (2002). Based on that advice, staff suggest council use the following definitions. “Site” (“siting” is not defined) is defined as relevant here to mean “the local position of building, town, monument or similar work either constructed or to be constructed, esp. in connection with its surroundings;” “a space of ground occupied by or to be occupied by a building;” and “land made suitable for building purposes by dividing into lots, laying or streets and providing facilities (as water, sewers, power supply).” Given this definition and the new law’s explicit grant of local regulation, it would be reasonable to find that “regulations relating to siting” include both: (1) regulations that specify the necessary lot characteristics for the siting of an accessory dwelling; and (2) regulations that specify where, on such a lot, an accessory dwelling may be sited. “Design” is defined as “a scheme for the construction, finish, and ornamentation of a building as embodied in the plans, elevations, and other architectural drawings pertaining to it.” It would be reasonable, for example, to find that “regulations relating to design” include regulations that address height and size. “Reasonable” is defined as “being or remaining within the bounds of reason; not extreme; not excessive ***; not demanding too much.” While it there is no way to know how a court will apply this definition (e.g. “reasonable” from whose perspective?), staff suggest the council incorporate it into the analysis by considering whether a regulation is so important for addressing a legitimate government concern that it justifies the limitation it may place on the number of accessory dwelling units that may be established in the City.
February 20, 2019, Work Session – Item 1
To help inform council’s next steps, staff have compiled a few other important pieces of information:
• A wide range of community input was shared with the Planning Commission and City Council during the Phase 1 adoption process. This input exhibits a full range of viewpoints on secondary dwelling regulations, from keeping regulations as-is to removing or amending a number of existing regulations. Community input was also gathered through the Housing Tools and Strategies work, the umbrella under which the Phase 2 work was supposed to be considered. This input includes suggestions for how to amend existing regulations as well as clearly highlighting concerns and possible impacts. See Attachment B for a complete summary, organized by the lists addressed above. Of course, the council will receive more input at the public hearing.
• Other cities have adopted ordinances that may be of interest. A brief summary of regulations that apply to accessory dwelling units in other Oregon cities is included in Attachment C.
• The Oregon Department of Land Conservation and Development issued guidelines in March 2018 for how it believes cities should consider local regulations in response to SB 1051 (Attachment D).
• An excerpt from the Housing Tools and Strategies Evaluation prepared by Strategic Economics (January 2019) pertaining to their research and analysis on accessory dwelling units. (Attachment E). With the City Council’s initial direction regarding the development standards, City staff can prepare a proposed ordinance that will also re-instate all the provisions from the remanded June 2018 Phase 1 ordinances.
Next Steps The Council will be asked to take three steps to complete action on the LUBA remand. First, direct the City Manager to prepare findings and/or land use code amendments to address the “reasonable regulations relating to siting and design” requirement of the new law. Second, hold a public hearing on an ordinance that includes the findings and/or amendments and that would reinstate the June 2018 provisions. Third, deliberate and adopt the ordinance.
PREVIOUS COUNCIL DIRECTION January 17, 2018 Work Session January 22, 2018 Work Session Move to initiate land use code changes for a phased approach to implementation of Senate Bill 1051 related to secondary dwellings. (Motion Passed) April 16, 2018 Public Hearing May 23, 2018 Work Session June 11, 2018 Work Session Move to substitute Attachment B to the AIS, which is labeled “Ordinance 1 / Substitute Ordinance,” in place of the Ordinance #1 now on the table. Move to adopt Ordinance #2, Attachment C to the AIS. (Motions Passed)
February 20, 2019, Work Session – Item 1
COUNCIL OPTIONS The City Council may consider the following options: 1. Direct the City Manager to prepare a proposed ordinance consistent with the council’s direction on accessory dwelling units, and to schedule a public hearing on the proposed ordinance in response to LUBA’s remand. 2. Take no action at this time.
CITY MANAGER’S RECOMMENDATION The City Manager recommends preparation of an ordinance consistent with the council’s direction on accessory dwelling units, and to schedule a public hearing on the proposed ordinance in response to LUBA’s remand.
SUGGESTED MOTION Move to direct the City Manager to prepare a proposed ordinance consistent with the council’s direction on accessory dwelling units, and to schedule a public hearing on the proposed ordinance in response to LUBA’s remand.
ATTACHMENTS A. Summary and Initial Analysis of Accessory Dwelling Regulations Matrix B. Community Input Summary C. Summary of Accessory Dwelling Regulations in Other Cities D. DLCD Guidance on Implementing the Accessory Dwelling Units (ADU) Requirement E. Housing Tools and Strategies Evaluation prepared by Strategic Economics (excerpt)
FOR MORE INFORMATION Staff Contact: Alissa Hansen Telephone: 541-682-5508 Staff E-Mail: ahansen@eugene-or.gov
Summary and Initial Analysis of Accessory Dwelling Regulations ATTACHMENT A
Retain/justify in findings Request Council Direction Eliminate from Land Use Code
No. Topic Summary of Requirement and Applicability
Eugene Code
(EC)
Section(s)
Staff’s Initial Evaluation
Relates to
Siting
Relates to
Design
Basis for
Regulation
Recommendation
for Discussion
1 Maximum Lot Coverage University Area: The lot shall meet the lot coverage requirements for R-1, except that all roofed
areas shall be included as part of the calculation of lot coverage.
All Other Lots: In R-1 and R-2, coverage of building footprints is limited 50% of lot
9.0500
9.2751(17)(c)3.
Table 9.2750
✓✓Addresses
overcrowding
concerns & desire
for yard/open
space
2 Outdoor Living Area All Lots: In R-2, R-3 & R-4, a minimum of 20 percent of the development site is required to be open
space.
Table 9.2750 ✓✓Addresses
overcrowding
concerns & desire
for yard/open
space
3 Building Size University Area: For lots at least 7,500 square feet and less than 9,000 square feet in area, the SDU
shall not exceed 600 square feet. For lots at least 9,000 square feet in area, the SDU shall not
exceed 800 square feet.
All Other Lots: Building square footage is limited to 10 percent of the total lot area or 800 square
feet, whichever is smaller. In addition, for detached SDUs, up to 300 square feet of un-heated
garage or storage space attached to the SDU is allowed and is not counted in the allowable
building square footage.
9.2751(17)(c)5.
9.2751(17)(a)2.
9.2751(17)(b)1.
✓Demonstrates
accessory nature
4 Outdoor Storage/Trash All Lots: Outdoor storage and garbage areas are required to be screened from view from adjacent
properties and those across the street or alley with a minimum 42-inch tall 100-percent site
obscuring fence or enclosure on at least three sides.
9.2751(17)(b)4.
9.2751(17)(c)19.
✓Addresses
livability
5 Pedestrian Access University Area: For attached and detached SDUs, same as for all other lots, except that if the
primary vehicle access for the required parking is from an alley, the path must be provided from
the alley.
All Other Lots: Detached SDUs are required to provide a pedestrian walkway from the street or
alley to the primary entrance of the secondary dwelling. The pedestrian walkway shall be a hard
surface (concrete, asphalt or pavers) and shall be a minimum of 3 feet in width.
9.2751(17)(b)2.
9.2751(17)(c)17.
✓Addresses
accessibility
6 Minimum Attachment All Lots: To be considered attached, requires the SDU and the primary dwellings must share a
common wall or ceiling for a minimum of 8 feet.
9.2751(17)(a)4. ✓Clarity as to what
constitutes
attached
7 Prohibition on Alley Access Lots All Lots: SDUs are prohibited on alley access lots. (An alley access lot is a lot that abutting an alley
and not abutting a street and created from the rear portion of an existing lot or parcel.)
9.2741(2)
9.2751(18)(a)2.
✓Addresses traffic
and overcrowding
concerns
1 Minimums Lot Size Minimum lot size required for a secondary dwelling unit (SDU):
University Area: 7,500 square feet
Flag Lots: 12,500 square feet
All Other Lots: 6,100 square feet
9.2571(17)(c)1.
9.2775(4)(b)
9.2751(17)(a)1.
✓Addresses
overcrowding
concerns
2 Maximum Density All Lots: Minimum and Maximum net density per acre is as follows:
R-1: No minimum to 14 units
R-2: 13 to 28 units
R-3: 20 to 56 units
R-4: 20 to 112 units
Table 9.2740
Table 9.2750 ✓Addresses
overcrowding
concerns
3 Lot Dimensions University Area: To allow for an SDU, requires that the boundaries of the lot be sufficient to fully
encompass an area with minimum dimensions of 45 feet by 45 feet.
9.2571(17)(c)2. ✓Addresses
overcrowding
concerns
February 20, 2019, Work Session – Item 1
2
No. Topic Summary of Requirement and Applicability
Eugene Code
(EC)
Section(s)
Staff’s Initial Evaluation
Relates to
Siting
Relates to
Design
Basis for
Regulation
Recommendation
for Discussion
4 Parking Requirement
University Area: Limits the primary dwelling to a minimum of one and a maximum of two parking
spaces on the lot and requires one additional parking space on the lot for the SDU.
All Other Lots: Requires one additional space for the SDU.
9.2751(17)(c)15.
Table 9.6410 ✓ Addresses traffic
concerns
5 Alley Access Parking/Driveway
University Area: Where primary vehicle access for the required parking for the SDU is from an alley,
the following standards apply:
• Only one covered or enclosed parking space may be provided (carport or garage). The covered
or enclosed parking space shall be counted towards the total number of parking spaces.
• The maximum dimensions for a garage shall be 16 feet by 24 feet, with a maximum garage
door width of 9 feet.
• The minimum setback for a garage shall be 5 feet from the alley. If the garage is setback
greater than 5 feet from the alley, it must be setback a minimum of 15 feet and the area
between the garage and the alley shall be counted towards one parking space.
• The maximum width for a driveway accessing a garage or carport shall be 12 feet.
• The maximum dimensions for one parking space located perpendicular to the alley shall be 12
feet in width by 20 feet in depth.
• The maximum dimensions for two side by side parking spaces perpendicular to the alley shall
be 20 feet in width by 20 feet in depth.
• The maximum dimensions for tandem parking spaces shall be12 feet in width by 33 feet in
depth.
• Only one parking space parallel to the alley shall be allowed, and such space shall not exceed
10 feet in width and 20 feet in length along the length of alley.
• The total vehicle use area, including but not limited to driveways and on-site parking, but not
including parking space in garage, shall not exceed 400 square feet.
• No parking shall occur outside of the vehicle use area.
9.2751(17)(c)16.
9.2751(18)(a)11. ✓ Addresses traffic
concerns
6 Building Height/Sloped Setback
University Area: For detached secondary dwellings, the interior yard setback shall be at least 5 feet
from the interior lot line. In addition, at a point that is 8 feet above grade, the setback shall slope
at the rate of 10 inches vertically for every 12 inches horizontally (approximately 40 degrees from
horizontal) away from the lot line until a point not to exceed a maximum building height of 18 feet.
The allowances for setback intrusions provided at EC 9.6745(3) do not apply within the setback,
except that eaves, chimneys and gables are allowed to project into this setback no more than 2
feet.
Flag Lots: Interior yard setbacks shall be at least 10 feet. In addition, at a point that is 8 feet above
finished grade, the setback shall slope at the rate of 10 inches vertically for every 12 inches
horizontally away from the property line until a point not to exceed a maximum building height of
18 feet for detached secondary dwellings and the maximum building height of the primary
dwelling for attached secondary dwellings. The allowances for setback intrusions provided at EC
9.6745(3) do not apply within the setback, except that eaves and chimneys are allowed to project
into this setback no more than 2 feet. This standard may be adjusted to allow for a secondary
dwelling over an accessory building in accordance with EC 9.8030(34).
All Other Lots:
For attached secondary dwellings located within 60 feet of a front lot line, interior yard setbacks
shall be at least 5 feet, and maximum building height shall be limited to that of the main building
as per Table 9.2750.
9.2751(17)(c)9.
9.2775(5)3.
9.2751(17)(a)3.
9.2751(17)(b)5.
✓ Demonstrates
accessory
nature/addresses
livability
February 20, 2019, Work Session – Item 1
3
No. Topic Summary of Requirement and Applicability
Eugene Code
(EC)
Section(s)
Staff’s Initial Evaluation
Relates to
Siting
Relates to
Design
Basis for
Regulation
Recommendation
for Discussion
For attached secondary dwellings located greater than 60 feet of a front lot line, interior yard
setbacks shall be at least 5 feet. In addition, at a point that is 8 feet above finished grade, the
setback shall slope at the rate of 10 inches vertically for every 12 inches horizontally away from the
property line to a maximum building height of 18 feet. The allowances for setback intrusions
provided at EC 9.6745(3) do not apply within the setback, except that eaves and chimneys are
allowed to project into this setback no more than 2 feet.
For detached: Interior yard setbacks shall be at least 5 feet. In addition, at a point that is 8 feet
above finished grade, the setback shall slope at the rate of 10 inches vertically for every 12 inches
horizontally away from the property line until a point not to exceed a maximum building height of
18 feet. The allowances for setback intrusions provided at EC 9.6745(3) do not apply within the
setback, except that eaves and chimneys are allowed to project into this setback no more than 2
feet. This standard may be adjusted to allow for a secondary dwelling over an accessory building in
accordance with EC 9.8030(34).
1 Prohibition on New Flag Lots
All Lots: SDUs are not allowed on flag lots that did not exist or were not approved prior to August
29, 2014.
9.2775(4) ✓ Addresses
overcrowding
concerns
2 Vehicle Use Area
University Area: Limits the maximum area covered by paved and unpaved vehicle use areas
including but not limited to driveways, on-site parking and turnarounds, to 20 percent of the total
lot area.
9.2751(17)(c)4. ✓ Desire for
yards/open space
3 Owner/Occupancy Requirement
All Lots: Requires that either the SDU or the primary dwelling be occupied by the owner of the
property. Includes requirement for deed restriction and verification, and allowance for temporary
one-year leave.
9.0500
9.2751(17)(a)7. -
10.
9.2751(17)(c)11. -
14.
✓ Demonstrate
accessory
nature/landlord
accountability
4 Maximum Bedroom
University Area: For lots with a primary dwelling containing 3 or fewer bedrooms, the SDU is
limited to 2 bedrooms. For lots with a primary dwelling containing 4 or more bedrooms, the SDU is
limited to 1 bedroom.
All Other Lots: Limits the SDU to no more than 2 bedrooms.
9.2751(17)(c)7.
9.2751(17)(a)5.
✓ Demonstrates
accessory
nature/addresses
overcrowding
concerns
5 Maximum Occupancy
University Area: For lots with a primary dwelling containing 3 or fewer bedrooms, limits the SDU to
3 occupants. For lots with a primary dwelling containing 4 or more bedrooms, limits the SDU to 2
occupants.
9.2751(17)(c)8. For Council Discussion
6 Dog Keeping
All Lots: Limits properties with an SDU to no more than 3 dogs on the lot.
9.2751(17)(a)6.
9.2751(17)(c)10.
For Council Discussion
February 20, 2019, Work Session – Item 1
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14
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Sue Walling testimony City Council Public Hearing April 16, 2018
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Eliza Kashinsk y testimony City Council Public Hearing April 16, 2018 February 20, 2019, Work Session – Item 1
15
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Seth Sadofsky testimony City Council Public Hearing April 16, 2018
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Richie Weinman testimony City Council Public Hearing April 16, 2018
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Matt McRae testimony City Council Public Hearing April 16, 2018
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Josh Newman testimony City Council Public Hearing April 16, 2018
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Strategic Economics ‐ Eugene Housing Tools and Strategies Evaluation Housing Tools and Strategies
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Home Builders Association Comments in Bill Kloos Email 2‐23‐18 Written Testimony‐ Phase 1
February 20, 2019, Work Session – Item 1
February 20, 2019, Work Session – Item 1
Accessory Dwelling Regulations in Other Oregon Cities ATTACHMENT C
City
2018
Population
Estimate
Requirements
Minimum Lot Size Density Parking
Spaces
Owner
Occupancy
Maximum Building Square
Footage Updated
Portland 648,740 No Exempt in
SF
0 No 800 sq.ft. or 75% of primary
dwelling, whichever is less
Salem 165,265 No Exempt 0 No 900 sq.ft or 75% of primary
dwelling, whichever is less
2017
Gresham 110,505 No Exempt 1 No Attached: 900 sq.ft.
Detached: 750 sq.ft.
2018
Hillsboro 101,920 Minimum lot area
requirements of zone
Unclear 1 No 750 sq. ft. Unclear
Beaverton 97,000 No Silent 1 No 800 sq.ft or 50% of primary
dwelling, whichever is less.
(update
in
progress)
Bend 89,505 No Exempt 1 (can be on-
street)
No 600 sq ft. or 800 sq.ft. based on
lot size
2018
Medford 80,375 No Exempt 0 No 900 sq.ft. or 75% of primary
dwelling, whichever is less
2018
Springfield 60,865 Minimum lot area
requirements of zone
Silent 1 (can be on-
street)
No 800 sq. ft. or size of primary
dwelling, whichever is less
2018
Corvallis 59,280 No Silent 0 Yes 480 sq.ft. or 40% of primary
dwelling, whichever is greater;
not to exceed 900 sq.ft.
2018
Albany 53,145 Minimum lot area
requirements of zone
Silent Current: 3
total
Proposed: on-
street waiver
Current:
Yes
Proposed:
No
Current: 750 sq.ft. or 50% of
primary; whichever is less
Proposed: 900 sq.ft.
2007
Tigard 52,785 No Silent 1 or 0 if within
½ mile from
transit or with
street parking
No 800 sq.ft. (not to exceed primary
dwelling)
2019
Lake Oswego 38,215 No Silent 1 Yes 800 sq.ft.
2018
February 20, 2019, Work Session – Item 1
GUIDANCE ON IMPLEMENTING
THE ACCESSORY DWELLING UNITS (ADU) REQUIREMENT
UNDER OREGON SENATE BILL 1051
M. Klepinger’s backyard detached ADU, Richmond neighborhood, Portland, OR.
(Photo courtesy of Ellen Bassett and accessorydwellings.org.)
OREGON DEPARTMENT OF LAND CONSERVATION AND DEVELOPMENT
MARCH 2018
Oregon Department of
Land Conservation
and Development
February 20, 2019, Work Session – Item 1
ATTACHMENT D
ADU Guidance ‐1‐ March 2018
Introduction As housing prices in Oregon go up, outpacing employment and
wage growth, the availability of affordable housing is decreasing
in cities throughout the state. While Oregon’s population
continues to expand, the supply of housing, already impacted by
less building during the recession, has not kept up. To address the
lack of housing supply, House Speaker Tina Kotek introduced
House Bill 2007 during the 2017 legislative session to, as she
stated, “remove barriers to development.” Through the legislative
process, legislators placed much of the content of House Bill 2007
into Senate Bill 1051, which then passed, and was signed into law
by Governor Brown on August 15, 2017. In addition, a scrivener’s
error1 was corrected through the passage of HB 4031 in 2018.
Among the provisions of SB 1051 and HB 4031 is the requirement
that cities and counties of a certain population allow accessory
dwelling units (ADUs) as described below:
a)A city with a population greater than 2,500 or a county with a
population greater than 15,000 shall allow in areas within the
urban growth boundary that are zoned for detached single‐
family dwellings the development of at least one accessory
dwelling unit for each detached single‐family dwelling, subject
to reasonable local regulations relating to siting and design.
b)As used in this subsection, “accessory dwelling unit” means an
interior, attached or detached residential structure that is used
in connection with or that is accessory to a single‐family
dwelling.
This new requirement becomes effective on July 1, 2018 and
subject cities and counties must accept applications for ADUs
inside urban growth boundaries (UGBs) starting July 1, 2018.
Many local governments in Oregon already have ADU regulations
that meet the requirements of SB 1051, however, some do not.
Still others have regulations that, given the overall legislative
direction to encourage the construction of ADUs to meet the
housing needs of Oregon’s cities, are not “reasonable.” The
Oregon Department of Land Conservation and Development
(DLCD) is issuing this guidance and model code language to help
local governments comply with the legislation. The model code
language is included on its own page at the end of this document.
1 The scrivener’s error in SB 1051 removed the words “within the urban growth boundary.” HB
4031 added the words into statute and thus limited the siting of ADUs to within UGBs.
February 20, 2019, Work Session – Item 1
ADU Guidance ‐2‐ March 2018
Guidance by Topic The purpose of the following guidance is to help cities and
counties implement the ADU requirement in a manner that meets
the letter and spirit of the law: to create more housing in Oregon
by removing barriers to development.
Number of Units The law requires subject cities and counties to allow “at least one
accessory dwelling unit for each detached single‐family dwelling.”
While local governments must allow one ADU where required,
DLCD encourages them to consider allowing two units. For
example, a city or county could allow one detached ADU and
allow another as an attached or interior unit (such as a basement
conversion). Because ADUs blend in well with single‐family
neighborhoods, allowing two units can help increase housing
supply while not having a significant visual impact. Vancouver, BC
is a successful example of such an approach.
Siting Standards In order to simplify standards and not create barriers to
development of ADUs, DLCD recommends applying the same or
less restrictive development standards to ADUs as those for other
accessory buildings. Typically that would mean that an ADU could
be developed on any legal lot or parcel as long as it met the
required setbacks and lot coverage limits; local governments
should not mandate a minimum lot size for ADUs. So that lot
coverage requirements do not preclude ADUs from being built on
smaller lots, local governments should review their lot coverage
standards to make sure they don’t create a barrier to
development. To address storm water concerns, consider limits to
impermeable surfaces rather than simply coverage by structures.
In addition, any legal nonconforming structure (such as a house or
outbuilding that doesn’t meet current setback requirements)
should be allowed to contain, or be converted to, an ADU as long
as the development does not increase the nonconformity.
Design Standards Any design standards required of ADUs must be clear and
objective (ORS 197.307[4]). Clear and objective standards do not
contain words like “compatible” or “character.” With the
exception of ADUs that are in historic districts and must follow the
historic district regulations, DLCD does not recommend any
special design standards for ADUs. Requirements that ADUs
match the materials, roof pitch, windows, etc. of the primary
dwelling can create additional barriers to development and
sometimes backfire if the design and materials of the proposed
February 20, 2019, Work Session – Item 1
ADU Guidance ‐3‐ March 2018
ADU would have been of superior quality to those of the primary
dwelling, had they been allowed.
Parking Requiring off‐street parking is one of the biggest barriers to
developing ADUs and it is recommended that jurisdictions not
include an off‐street parking requirement in their ADU standards.
Adding off‐street parking on many properties, especially in older
centrally‐located areas where more housing should be
encouraged, is often either very expensive or physically
impossible. In addition, when adding an additional off‐street
parking space requires a new or widened curb cut, it removes
existing on‐street parking, resulting in no net gain of parking
supply. As an alternative to requiring off‐street parking for ADUs,
local governments can implement a residential parking district if
there is an on‐street parking supply shortage. For more help on
parking issues, visit www.oregon.gov/lcd/tgm/pages/parking.aspx
or contact DLCD.
Owner Occupancy Owner‐occupancy requirements, in which the property owner is
required to live on the property in either the primary or accessory
dwelling unit, are difficult to enforce and not recommended. They
may be a barrier to property owners constructing ADUs, but will
more likely simply be ignored and constitute an on‐going
enforcement headache for local governments.
Public Utilities Development codes that require ADUs to have separate sewer
and water connections create barriers to building ADUs. In some
cases, a property owner may want to provide separate
connections, but in other cases doing so may be prohibitively
expensive.
System Development Charges (SDCs)
While SDCs are not part of the development code and SB 1051
does not require them to be updated, local governments should
consider revising their SDCs to match the true impact of ADUs in
order to remove barriers to their development. ADUs are
generally able to house fewer people than average single‐family
dwellings, so their fiscal impact would be expected to be less than
a single‐family dwelling. Accordingly, it makes sense that they
should be charged lower SDCs than primary detached single‐
family dwellings.
February 20, 2019, Work Session – Item 1
ADU Guidance ‐4‐ March 2018
This page intentionally left blank.
February 20, 2019, Work Session – Item 1
ADU Guidance ‐5‐ March 2018
Accessory Dwellings (model code)
Note: ORS 197.312 requires that at least one accessory dwelling be allowed per detached single-family dwelling in
every zone within an urban growth boundary that allows detached single-family dwellings. Accessory dwellings are
an economical way to provide additional housing choices, particularly in communities with high land prices or a
lack of investment in affordable housing. They provide an opportunity to increase housing supply in developed
neighborhoods and can blend in well with single-family detached dwellings. Accessory dwelling regulations can be
difficult to enforce when local codes specify who can own or occupy the homes. Requirements that accessory
dwellings have separate connections to and pay system development charges for water and sewer services can
pose barriers to development. Concerns about neighborhood compatibility, parking, and other factors should be
considered and balanced against the need to address Oregon’s housing shortage by removing barriers to
development.
The model development code language below provides recommended language for accessory dwellings. The
italicized sections in brackets indicate options to be selected or suggested numerical standards that communities
can adjust to meet their needs. Local housing providers should be consulted when drafting standards for accessory
dwellings, and the following standards should be tailored to fit the needs of your community.
Accessory dwellings, where allowed, are subject to review and approval through a Type I procedure[,
pursuant to Section ________,] and shall conform to all of the following standards:
[A. One Unit. A maximum of one Accessory Dwelling is allowed per legal single-family dwelling. The unit may
be a detached building, in a portion of a detached accessory building (e.g., above a garage or workshop), or
a unit attached or interior to the primary dwelling (e.g., an addition or the conversion of an existing floor).
/
A. Two Units. A maximum of two Accessory Dwellings are allowed per legal single-family dwelling. One unit
must be a detached Accessory Dwelling, or in a portion of a detached accessory building (e.g., above a
garage or workshop), and one unit must be attached or interior to the primary dwelling (e.g., an addition or
the conversion of an existing floor).]
B. Floor Area.
1.A detached Accessory Dwelling shall not exceed [800-900] square feet of floor area, or [75]
percent of the primary dwelling’s floor area, whichever is smaller.
2.An attached or interior Accessory Dwelling shall not exceed [800-900] square feet of floor area,
or [75] percent of the primary dwelling’s floor area, whichever is smaller. However, Accessory
Dwellings that result from the conversion of a level or floor (e.g., basement, attic, or second
story) of the primary dwelling may occupy the entire level or floor, even if the floor area of the
Accessory Dwelling would be more than [800-900] square feet.
C. Other Development Standards. Accessory Dwellings shall meet all other development
standards (e.g., height, setbacks, lot coverage, etc.) for buildings in the zoning district, except that:
1.Conversion of an existing legal non-conforming structure to an Accessory Dwelling is allowed,
provided that the conversion does not increase the non-conformity; and
February 20, 2019, Work Session – Item 1
ADU Guidance ‐6‐ March 2018
2.No off-street parking is required for an Accessory Dwelling.
Definition (This should be included in the “definitions” section of the zoning ordinance. It matches the
definition for Accessory Dwelling found in ORS 197.312)
Accessory Dwelling – An interior, attached, or detached residential structure that is used in
connection with, or that is accessory to, a single-family dwelling.
February 20, 2019, Work Session – Item 1
EUGENE HOUSING TOOLS & STRATEGIES
EVALUATION
Prepared for:
City of Eugene, OR
January 2019
ATTACHMENT E
February 20, 2019, Work Session – Item 1
Eugene Housing Tools & Strategies Evaluation 1
TABLE OF CONTENTS
Executive Summary .................................................................................................................. 2
Introduction ..................................................................................................................................... 2
Report Organization ........................................................................................................................ 2
Background Information ................................................................................................................. 2
Accessory Dwelling Unit Evaluation ............................................................................................... 5
Construction Excise Tax Evaluation ............................................................................................... 7
Introduction ............................................................................................................................ 10
Purpose of Study .......................................................................................................................... 10
Overview of Affordable Housing and Housing Affordability in Eugene ..................................... 11
Background information ....................................................................................................... 12
Population and household characteristics ................................................................................. 12
Home Values and Rents .............................................................................................................. 21
Accessory Dwelling Units....................................................................................................... 26
Who Lives in ADUs? ..................................................................................................................... 26
Benefits and Opportunities Associated with ADUs .................................................................... 26
Barriers to ADUs ........................................................................................................................... 27
ADU Feasibility .............................................................................................................................. 30
Recommendations on ADUs ........................................................................................................ 33
Construction Excise Tax ........................................................................................................ 34
Revenue Potential ........................................................................................................................ 34
Financial Feasibility Evaluation ................................................................................................... 35
Recommendations on CET .......................................................................................................... 41
Appendix I: Housing Tools & Strategies Inventory ..................................................................... 42
Appendix II: Best Practices Resources ....................................................................................... 47
February 20, 2019, Work Session – Item 1
Eugene Housing Tools & Strategies Evaluation 10
INTRODUCTION
Purpose of Study
Enabling quality housing at a range of price points is a high priority for the City of Eugene. In May 2018,
the Eugene City Council passed a motion to have staff implement a process to identify barriers to
housing affordability, availability, and diversity, and to suggest, evaluate, and recommend possible
strategies and tools to address the barriers.
The process included the establishment of the Housing Tools and Strategies Working Group, a citizen
committee formed to make recommendations to City Council on options to improve housing
affordability, availability and diversity in Eugene. In support of all these efforts the City of Eugene hired
Strategic Economics to conduct research and analysis on housing policies and tools. This report is not
intended as a comprehensive affordable housing strategy or housing action plan, but rather provides
findings from a series of tasks coordinated with the work of the Housing Tools and Strategies Working
Group. For the process, Strategic Economics conducted the following tasks:
Evaluated data on demographics and housing. Strategic Economics analyzed a wide variety of
quantitative data, relying on U.S. Census and American Community Survey estimates for
demographic data, and on sources such as Costar and Redfin for housing market data. The
City of Eugene also provided Strategic Economics with housing unit building permit trend data.
Evaluated Accessory Dwelling Units. Strategic Economics performed multiple analyses
concerning Accessory Dwelling Units (ADUs) in Eugene. Strategic Economics analyzed: 1)
parcel data to consider how current ADU policies may be limiting ADU production and the
overall potential of ADUs as a tool to increase Eugene’s housing stock; 2) the Eugene land use
code to identify areas of conflicting interpretation on ADU policy; 3) existing literature on ADU
production in other cities; and 4) the financial feasibility of building an ADU under various
scenarios.
Evaluated the Construction Excise Tax (CET). Strategic Economics relied on building valuation
data from the City of Eugene to estimate the potential revenue of a Construction Excise Tax
(CET), and considered the impacts of a CET on the financial feasibility of development projects.
Conducted financial feasibility evaluation. Strategic Economics considered the feasibility of
various housing development types, including large-lot single family, townhome, multifamily,
cottage cluster, and accessory dwelling unit projects. Feasibility was analyzed under various
scenarios including the status quo, with reduced system development charges (SDCs), and
with a CET.
Interviewed homeowners, property owners, renters, developers, and city staff. Strategic
Economics contacted a variety of stakeholders and conducted interviews with city staff,
community members, and with individuals involved in the development community, including
professional real estate developers, architects, homebuilders, contractors, and homeowners
building ADUs.
Prepared summary descriptions of housing tools and strategies (Appendix I). Strategic
Economics researched and assembled a matrix of housing-focused tools typically used by
municipalities. The matrix includes tools on zoning strategies for market-rate housing
production, as well as developer incentives and local funding strategies for affordable housing
production.
February 20, 2019, Work Session – Item 1
Eugene Housing Tools & Strategies Evaluation 26
ACCESSORY DWELLING UNITS
This chapter summarizes the evaluation of Accessory Dwelling Unit (ADU) policy in Eugene. Strategic
Economics conducted several analyses to evaluate the potential to increase ADU production,
including: 1) conducting a parcel analysis to consider how current ADU policies may be limiting ADU
production and the overall potential of ADUs as a tool to increase Eugene’s housing stock and the
overall potential of ADUs as a tool to increase Eugene’s housing stock; 2) reviewing the Eugene land
use code to identify areas of conflicting interpretation on ADU policy; 3) reviewing existing literature on
ADU production in other cities; and 4) conducting an analysis of the financial feasibility of building an
ADU under various scenarios.
An ADU, also sometimes referred to as a “granny flat,” “in-law unit,” or “backyard cottage,” is a housing
unit of modest size, typically ranging from studios to two bedrooms, added to the lot of single-family
home. ADUs come in many forms. They can be detached from or incorporated into the primary dwelling.
They can be newly constructed or converted from existing structures, such as garages. ADUs are
considered a type of “gentle density” in which building them increases the housing supply while
minimally impacting their neighborhoods.
Who Lives in ADUs?
ADUs have been promoted in high-cost cities to meet the needs of aging homeowners. An ADU could
provide retirees with both an additional income source, and a means to “age in place.” A 2014 survey
of over 200 Portland homeowners with ADUs found that owners are typically older than ADU tenants.
The median age of ADU owners in Portland was estimated to be 53, while that of tenants was 36.25
The vernacular nicknames for ADUs suggest that they are inhabited primarily by family members, be
it an elderly parent or an adult son or daughter. However, in regions with high housing costs,
homeowners are increasingly building ADUs as units on the general rental market. A study that
surveyed homeowners that had recently built ADUs in Seattle, and Portland, and Vancouver, BC, found
that over half of the 414 respondents’ ADUs were occupied by “arm’s length renters,” or those with no
previous relationship with the owner. Friends and family occupied approximately 30 percent of ADUs,
and the remaining respondents reported their ADUs were either unoccupied or occupied by
homeowners.26
Benefits and Opportunities Associated with ADUs
An effective ADU policy can contribute to achieving or maintaining affordability while accommodating
growth because ADUs are a relatively low cost housing type since there are no land costs and because
they capitalize on existing infrastructure. Other benefits of ADUs include:
ADUs do not require the demolition of existing buildings, and therefore have a significantly smaller
displacement impact, compared to larger-scale development.
25 Brown, Martin and Jordan Palmeri, “Accessory dwelling units in Portland, Oregon: evaluation and interpretation of a survey of ADU owners,”
Oregon Department of Environmental Quality, 2014.
26 Chapple, Karen, Jake Wegmann, Farzad Mashhood, and Rebecca Coleman. “Jumpstarting the Market for ADUs: Lessons Learned from
Portland, Seattle, and Vancouver.” The Terner Center for Housing Innovation, 2018.
February 20, 2019, Work Session – Item 1
Eugene Housing Tools & Strategies Evaluation 27
ADUs can be regulated in a manner that allows them to be visually compatible with their
neighborhood’s existing fabric. Municipalities’ typical ADU site design regulations tend to require that
ADUs be smaller than the primary unit and set back from the primary street. With these policies in
place, ADUs have a minimal impact on the urban design characteristics of their neighborhoods.
Building ADUs can be relatively straightforward. The barrier to entry for homeowners wanting to build
an ADU is very low, compared to other, more complex housing products. In this sense, ADU-supportive
policies can open up the real estate development arena to a larger swath of the population, which
increases the rate at which new housing can be delivered. Homeowners building ADUs do not have
land acquisition and assembly requirements typical of larger development, (including other Missing
Middle development types). Additionally, ADU development, when guided by sound policy, can bypass
administrative hurdles that more complex developments tend to require, such as site plan reviews,
zoning changes, or subdivision applications.
In tight housing markets, ADUs provide property owners with supplemental income, and renters with
an “affordable-by-design” housing option. In a balanced housing market, ADUs’ efficient size and less
expensive construction cost can translate to housing cost savings for renters. They also provide an
opportunity for seniors to “age in place,” in which a senior homeowner could reside in an ADU while
earning rental income on their primary property.
Barriers to ADUs
Barriers to ADUs include zoning and permitting issues as well as lack of capital or other financing
issues. This section summarizes nationwide financing issues and barriers arising from Eugene’s
existing ADU policies.
NATIONWIDE ADU FINANCING ISSUES
Homeowners frequently are required to take on substantial personal financial risk when building an
ADU. A comparable amount of upfront development costs per unit are likely to be completely
reasonable for professional developers to absorb, who benefit from greater access to financing
products and more experience navigating the real estate development process. However, for
homeowners, these costs can impede ADU development, and the threshold at which per unit
development cost can kill an ADU project is likely to be considerably lower than for larger developments
that traditional developers oversee. A study that surveyed ADU owners in Portland, Vancouver, and
Seattle, for instance, found that monetary challenges, including obtaining a loan and paying for
construction costs, were the largest challenges that homeowners building ADUs faced. 27
Larger-scale developers typically rely on construction loans to finance development projects, through
which they borrow against expected future equity following the project’s completion. However, this type
of loan product is typically not available to homeowners adding ADUs. Rather, homeowners rely on
their own savings, or borrow against existing equity in their primary dwelling. A 2014 study that
surveyed over 200 Portland ADU owners found that 62 percent of respondents financed their ADU
(either partially or in-full) with cash, while a sizeable share also relied on their existing home equity,
27 Chapple, Karen, et al.. “Jumpstarting the Market for ADUs: Lessons Learned from Portland, Seattle, and Vancouver.” The Terner
Center for Housing Innovation, 2018.
February 20, 2019, Work Session – Item 1
Eugene Housing Tools & Strategies Evaluation 28
either through a home equity line of credit (29 percent), or cash-out refinancing based on the primary
home’s value (12 percent). Meanwhile, very few (2 percent) relied on a construction loan, and no
respondents paid with cash-out refinancing based on the property’s future value.28 National lending
institutions do not have an established definition for ADUs, and therefore they improperly categorize
them as non-income generating properties, which largely accounts for these financing issues. Fannie
Mae and Freddie Mac underwriting guidelines, for instance, treat properties with ADUs differently than
they would a duplex or other small multiplex, which they consider as “mortgage-helper” units. A
prospective homebuyer of a triplex, for instance, can partially rely on their expected rental income to
qualify for a mortgage. In contrast, a homebuyer purchasing a property with a detached ADU would
likely not be able to use expected rental income to qualify.29
The solution to circumventing nation-wide ADU financing issues rests in collaborating with local banks
and credit unions, who may be more willing to invest in ADU projects and to craft innovative financing
solutions that can support them. Umpqua Bank in particular already offers construction loans for ADUs
and other investment properties (see Appendix II for more information on Umpqua Bank’s programs).
BARRIERS CREATED FROM EXISTING EUGENE ADU POLICIES
While the City of Eugene currently allows ADUs in all traditional residential zones (R-1, R-2, R-3, and R-
4), and the majority of Special Zones by right, very few ADUs have been permitted and built. From
2008 to 2014, approximately nine ADUs were permitted per year, representing 1.5 percent of total
permitted units during this timeframe. However, after the City of Eugene adopted more restrictive ADU
requirements in July 2014, the annual number of ADU permitted units declined significantly. From
2015 to 2017, only seven ADUs were permitted in total, about two per year, representing just 0.3
percent of housing units permitted in those three years.
System Development Charges (SDCs) discourage people from building ADUs and from engaging in the
existing permitting process required to legally build them. Eugene ties SDCs to a building’s unit count
rather than to unit size. Developers of ADUs and other small-footprint housing units, such as cottage
clusters, pay comparable SDCs to developers of large, single-family homes. Homebuilders estimated
that there are potentially 50 to 60 ADUs being built per year in Eugene that are not permitted as ADUs,
but rather as “additions with two-bedrooms and a wet bar.” Because incorporating a full range into an
addition triggers ADU review, contractors frequently build “de facto” ADUs omitting that feature. Since
such units are unpermitted and therefore not subject to City review it would be very difficult for the City
of Eugene to confirm this estimate. However, the City was able to provide data for “not an ADU” deed
restrictions and for code compliance issues related to illegal dwelling space. In 2018 the City
processed 22 permits that required “not an ADU” deed restrictions, which are required when a
proposed project includes space that could be used as a separate dwelling but an ADU is not being
permitted. Again for 2018, the City found 19 code compliance cases related to illegal dwelling space.
Many of the cases appeared to be related to people living in unconverted garage or shed space. Staff
also noted that they have many more inquiries on ADUs than actual permitted units.
28 Brown, Martin and Jordan Palmeri, “Accessory dwelling units in Portland, Oregon: evaluation and interpretation of a survey of ADU owners,”
Oregon Department of Environmental Quality, 2014.
29 Wegmann, Jake. “Financing Ancillary Apartments on Residential Properties: Challenges and Solutions,” UC-Berkeley Institute of
Governmental Studies, 2015.
February 20, 2019, Work Session – Item 1
Eugene Housing Tools & Strategies Evaluation 29
Minimum lot size requirements preclude approximately 17 percent of residential lots with single-family
homes throughout Eugene from adding ADUs. Single-family lots in most residential areas must be
larger than 6,100 square feet to be eligible for an ADU. Approximately 15 percent of lots with single-
family homes are smaller than the minimum and would be ineligible for ADUs under current
regulations. In the Amazon, Fairmount, and South University neighborhoods lots must be at minimum
7,500 square feet.30 In these three neighborhoods, ADUs are currently prohibited on one-half of
single-family lots.
The requirement that owners must occupy either the primary or accessory unit precludes up to one-
fourth of owners of single-family homes in Eugene from adding ADUs. Census data estimates that of
the 37,400 “1-unit detached” units in Eugene, approximately 9,100 are renter-occupied.31 In other
words, 24 percent of single-family detached units are not occupied by the property owner, and
therefore those property owners would be ineligible to add ADUs to their lots unless they intended to
occupy one of the units. Multiple property owners and developers interviewed for this study viewed
this requirement as arbitrary and discriminatory against renter households, which make up over half
of all households in Eugene.
Site design requirements are highly prescriptive to a point of being potentially capricious. Both
developers and city staff mentioned that site design requirements do not allow for variations in
topography, or flexible standards for attached ADUs in existing buildings. For example, most existing
homes do not meet the building standards that the City of Eugene established for ADUs in 2014.
Therefore, many proposals for attached ADU units incorporated into existing homes are deemed
ineligible, according to city staff, because the existing homes themselves are incompatible with the
requirements. In addition, height standards for ADUs are inflexible on sloped lots. According to city
staff, ADU proposals on sloped lots typically do not move forward because applicants have difficulty
meeting the standards. Eugene requires adjustment review for ADU proposals requesting variances
from these standards, which opens the project up to public review and delays the project’s timeline,
which further adds to project cost.
The minimum off-street parking requirement for ADUs adds to site development cost and constrains
site design possibilities. Current regulations require that single-family homes with ADUs have a
minimum of two off-street parking spaces, or one space per unit. Developers and city staff said this
requirement can be challenging to meet from both a site design and financial feasibility perspective
for certain lots. Eliminating this regulation would likely have minimal impact on on-street parking
supply since developers satisfying this regulation may need to widen or add curb cuts, which reduces
parking supply.
Most SDC rates that apply to newly constructed single-family homes and duplexes also apply to ADUs.
While the Stormwater SDC rate is lower for buildings under 1,000 square feet, the other SDCs apply
at the same rate regardless of unit size or bedroom count. In effect, Eugene’s current SDC policies
disincentivize the development of both ADUs and of small footprint housing more generally. The City
of Eugene also currently restricts the number of bedrooms and square footage of ADUs, the only
housing type regulated in this manner. ADUs may be up to 800 square feet and can have two bedrooms
or fewer. The maximum square footage policy, on its own, helps ensure that ADUs have low
environmental impact, and offer “affordable-by-design” units in Eugene. However, a homeowner’s
30 Flag lots must be at minimum 12,500 square feet, excluding the “pole” portion of the lot. Flag lots were not considered in the minimum
lot size requirement geospatial analysis, due to the complex nature of identifying flag lots in the city’s parcel data.
31 American Community Survey, 5-year estimates, 2012-2016.
February 20, 2019, Work Session – Item 1
Eugene Housing Tools & Strategies Evaluation 30
rental income for an ADU is informed by the size of the unit. Therefore, the combination of the SDC
policy and size restrictions on ADUs likely negatively impacts ADU feasibility.
ADU Feasibility
The factors that impact financial feasibility of ADUs vary from those of larger-scale developments
because they are built under different circumstances than projects from professional developers.
While additional income can be a driving factor, motivations among homeowners adding ADUs are
typically multilayered. For instance, they may be providing housing for a family member, or creating a
way for themselves to “age in place.” This is in contrast to professional developers who make decisions
based on their financial bottom line. Homeowners may also have to take on a substantial amount of
personal debt to build an ADU, meaning they typically view the endeavor as very financially risky to
take on, substantially more so than a traditional developer managing a comparable project. With this
in mind, ADU feasibility is less about short-term profitability and more about the perceived risk and
time commitment associated with breaking even. Additionally, professional developers are likely to
plan for selling their projects after a certain period has passed, and they may make their decisions
based on information from a shorter time span. In contrast, homeowners adding ADUs are likely to
think of them as a long-term investment into their own property or home.
Therefore, while a larger projects’ feasibility is typically measured by its “yield on cost” or “return on
cost” (depending on if they are rentals or for-sale product), a potential ADU’s long-term cash flow better
informs whether it will or will not be built.
This evaluation of ADU feasibility tested four scenarios: Scenario 1 represents current circumstances
for building ADUs. Scenario 2 reflects if SDCs were waived, which is roughly equivalent to Portland’s
ADU policy. Scenario 3 incorporates waived SDCs, and a larger building size. Scenario 4 is modelled
after the Alley Flat Initiative, a program in Austin, Texas that aims to increase the production of
designated affordable housing units by assisting with the development of ADUs (see Appendix II for
more information on the Alley Flat Initiative). Figure 23 shows assumptions held constant for each
scenario.
FIGURE 23. ASSUMPTIONS FOR ALL SCENARIOS IN ADU CASH FLOW ANALYSIS
Metric Amount
Operating Cost as Share of Rent Income 30%
Vacancy Cost as Share of Rent 5%
Interest Rate for 30-Year Fixed Rate Cash-Out Refinance 4.50%
Down Payment as Share of Total Project Cost 20%
Rent Per Sq. Ft. $2.00
Time from Financing Approval to Certificate of Occupancy 1 Year
Source: Strategic Economics, 2018.
Figure 24 shows a summary of feasibility results for the four scenarios. Among the first three scenarios,
which assume the ADU is rented at market-rate, the current status quo is the least favorable to the
homeowner, requiring 14 years before the ADU project turns a profit. Waiving SDCs completely, and
February 20, 2019, Work Session – Item 1
Eugene Housing Tools & Strategies Evaluation 31
relaxing site design standards to easily allow for a 900 square foot ADU moves that up by four years.
This shows that combining incentives, such as waiving SDCs, with ADU-friendly design regulations can
significantly improve the financial outlook for homeowner. Scenario 4 demonstrates that requiring that
homeowners charge “affordable” rents impacts financial feasibility for ADUs. However, there are
potentially additional incentives that the City of Eugene could layer on top of those incorporated into
Scenario 4, to incentivize homeowners to participate.
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Eugene Housing Tools & Strategies Evaluation 32
FIGURE 24. FEASIBILITY RESULTS SUMMARY FOR FOUR ADU SCENARIOS
Scenario SDCs Building Sq. Ft. Net Operating Income
Total Mortgage
Cost
Homeowner Sees
Profit
Scenario 1: Status Quo $7,515 750 $11,700 $139,219 Year 14
Scenario 2: Waived SDCs $0 750 $11,700 $133,207 Year 12
Scenario 3: Waived SDCs
and Larger Sq. Ft. (a) $0 900 $14,040 $150,607 Year 10
Scenario 4: "Alley Flat
Initiative" Affordable
Housing (b) $0 900
First 5 Years: $5,216;
Year 6 and After:
$14,040 $142,378 Year 17
Source: City of Eugene, 2018; Strategic Economics, 2018
Notes: (a) While Scenarios 1 and 2 incorporate a direct per square foot cost of $175, Scenarios 3 and 4 are informed by a slightly discounted direct per
square foot cost of $170, as it is assumed the added square footage would be more efficiently built.
(b) In Scenario 4, the development overhead and A&E fees are discounted by 50%, while city permit fees are also waived. The homeowner is required
to rent their unit for the first five years at 80% AMI.
February 20, 2019, Work Session – Item 1
Eugene Housing Tools & Strategies Evaluation 33
Recommendations on ADUs
The factors limiting ADU production in Eugene are multi-faceted, and there is no one silver bullet that
alone would better support their development. To encourage ADU production, the City of Eugene would
need to take a number of steps, depending on the political appetite for increasing their supply. Options
include adjusting the land use code and the structure of SDCs and other city fees as they apply to
ADUs, increasing community outreach and education efforts regarding ADUs, and exploring ways to
support applicants trying to build ADUs, who typically are preempted from taking advantage of
traditional financing mechanisms available to professional developers. Specific options include:
Adjust Lot Size Requirements: The median lot size for a single-family home in Eugene is
approximately one-fifth of an acre, or 8,430 square feet, which is considered well-suited to
accommodate an ADU. After eliminating the 1,470 single-family lots that may be too small to
incorporate an ADU, and the 73 ADUs that have been permitted since 2008, crafting policies
to encourage ADUs on all single-family lots could potentially add 43,344 units to Eugene’s
housing stock.32 While it is unlikely, of course, that every homeowner that is able would choose
to build an ADU, the sheer number of potential ADUs points to the great impact ADU-supportive
policy could have. If owners of just five percent of potential ADU lots were to build one, the
number of units added would be 2,150, which is equivalent to about one-third of all dwelling
units permitted in Eugene from 2008 through 2017.
Reduce Costs: The City of Eugene should consider scaling or reducing SDCs for ADUs. Reduced
SDCs would reflect the fact that ADUs typically have lower occupancy than single family
detached homes and that small-scale infill development capitalizes on existing infrastructure
rather than requiring system expansions.
Improve Site Design Flexibility: In cities like Eugene where a majority of residential lots are
occupied by detached single-family homes, ADU-supportive policy can substantially increase
the housing stock if there is a clear path to build them. If Eugene wants to see more ADUs
developed, then ADU requirements need to be more flexible. For example, under current
requirements it’s very difficult to convert a portion of an existing building into an accessory
unit, because it’s typical that the existing building does not follow the requirements and there
is no grandfathering of existing conditions or flexibility with this. Also, building height
requirements do not translate well to sloped lots, making it very cumbersome for homeowners
of these lots to incorporate ADUs. The requirement that ADUs have a minimum of one off-street
parking space can impede site design possibilities and may make lots that could easily
accommodate ADUs otherwise ineligible from doing so. The maximum square footage and
bedroom count regulations are not context-sensitive and can be overly restrictive depending
on the lot size.
Eliminate Owner Occupancy Requirement: The owner occupancy requirement should be
eliminated. Almost one-quarter of single-family detached units are not occupied by the property
owner. This requirement is burdensome and discriminatory against renter households, which
make up over half of all households in Eugene.
32 While ADU development standards vary between municipalities, there are examples of well-designed ADUs on lots as small as 4,000
square feet. There are 1,470 lots that are smaller than 4,000 square feet, which may be considered too small to accommodate an ADU.
February 20, 2019, Work Session – Item 1