When Kol Peterson moved to Portland, Oregon, in 2010, affordable housing was a priority, as it was for many newcomers in this city’s booming real-estate market. He looked at two frequently discussed options for high-cost cities—tiny houses on wheels and communal living—but decided on another option: accessory dwelling units, or ADUs—also known as granny flats, basement and garage apartments, and the like.
ADUs weren’t yet common in Portland—that year, the city issued only 86 permits for them—but when Peterson did the math he decided that building one was his best option. “I could buy a house, construct an ADU in the backyard, and live in the ADU while renting out the house,” he said. That’s what he did: He bought a home in the city’s King/Sabin neighborhood, built a tidy two-story mini-home in its backyard, and moved in. The experience, he says, has been life-changing. “Building an 800-foot ADU eventually eliminated my housing costs, and I’m living in my dream house.”