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Hello and welcome to the Spotlight Vancouver podcast. I am your host Doug Varenas, licensed

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realtor in Oregon and Washington. And today we are talking about accessory dwelling units

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or ADUs. We're going to talk about what they are, a little bit of the general regulations

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of rural and urban ADUs and who an ADU might be right for. And stick around to the end.

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I'm going to talk a little bit about the Washington bond program and how it's helping first time

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home buyers with down payment assistance. But first, we're going to get into ADUs accessory

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dwelling units. Now, I get a lot of questions about ADUs because people are beginning to

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see the utility that they provide. Now, an accessory dwelling unit is sort of like an

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independent apartment or living area that can be within a home or it can be detached

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and adjacent to the home. And it usually includes its own bathroom, bedroom and kitchen. So it's

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basically sort of like a mother-in-law apartment, mother-in-law suite. And there's a couple of

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people that I think this is going to be really useful for. And part of those part of that

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audience is going to be in that name, mother-in-law, or, you know, if you're looking for a multi

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generational living situation where you have elderly parents that are going to be living

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with you because they can no longer live without sort of having some extra help or an eye on

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them, that can be a great solution for people. And I don't think we've begun to see that

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quite as much. You're seeing a little bit more. And what I'm seeing is older parents

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actually who are looking to live with their grown children in a multi generational setting,

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and they're looking to pull their, pool their resources. So you're having usually the elderly

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parents that have a little more money and they are buying a property and they don't

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want to live necessarily in the same house or they want to have their own separate living

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area while they're living with their children. And I think this is a great situation for

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people because it, there's a lot of synergy there with the parents who might at some point

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need some extra help living independently, but they don't want to go to like a facility.

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And also for the children who may have trouble affording a home and also could benefit from

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having grandparents nearby, you know, if and when they decide to have children. So I find

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that that's what I'm seeing out there with ADUs is that it's for multi generational living

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and it's really convenient for that. Another set of people who might benefit from an ADU

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are parents that have adult children or soon to be adult children who have a disability,

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who may need some extra help, but want to live quasi independently and the parents want

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to keep them kind of nearby. Again, this can be pretty cost effective instead of having

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a like day program or some facility where they're living in where they're not going

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to be as independent or they're going to be further away. I think it's a great way to keep

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those adult kids who may need some extra care close to you and give them the opportunity

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to have a little more independence in their living situation. But those are the two main

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I forgot one. Whoops. The other one are investors. Let's not forget about the investors out

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there. I almost forgot. I and this applies to myself because recently I looked into having

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an ADU built on a rental property that we own in Carter Park neighborhood, Vancouver,

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so pretty dense neighborhood, very walkable neighborhood. And my thesis on real estate

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investing has changed a little bit, especially in this area where the ADU regulations are

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a little bit more lax and you're able to take advantage of them is that instead of acquiring

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more rental properties, more real estate to actually build upon current rentals to maximize

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their potential. And so the estimate that I got for the ADU, the new construction, it

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was a conversion of a current garage. So a conversion is a good way to skirt some of

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the ADU rules because you get kind of grandfathered in if you leave a certain percentage of the

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old structure up and you build on it. And I believe it's a very small portion that needs

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to remain like it can be a wall. And so with that, we were looking to have a garage and

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a two bedroom, two bath ADU built and it involved like cutting down a tree and you know, it's

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a little bit complicated, but it ended up the estimate was a little bit over $200,000,

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which is no small amount of change. But if you're an investor, you're looking at rent

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for something like that in that neighborhood to be around $2,000 or a little bit less.

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And so you're really reaching that 1% rule. So the 1% rule says that you can get rent

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that's 1% of the purchase price you're doing very well and that's exceedingly rare. I mean,

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it's pretty much impossible in this area. You still find the 1% rule doable in the Midwest

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and the South. But a lot of times that involves buying in an area that's not very good or

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the condition of the house isn't that great. So it's a cost effective way if you can finance

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it and put as little money as possible into the deal to make it cash flow or at least

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be you know, cash flow neutral. So you're not having to pay anything else into it. The

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renters are going to pay off the entire debt service of that ADU. I think that is a great

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way for investors to move forward on properties that they already own and kind of squeeze

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the juice out of that property. And I definitely looked into it. I haven't pulled the trigger

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yet. It is pretty expensive. That's you know, over $200 a square foot easily. And so things

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just aren't cheap. And so the construction of an ADU is going to be in that, you know,

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we're talking about a stick built ADU is going to be, you know, in that 152 area, depending

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on the square footage, you know, I find if you want something livable with enough square

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footage to be fairly comfortable, it's going to be in that range. I think you could do

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it a little bit cheaper if you were really looking to just like convert a garage into

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a living space. I mean, you could do that, you know, for a lot less, but then, you know,

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do people want to live in a 500, you know, or less 500 square foot or less garage. I'm

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not sure. But so investors, multi generation and people with adult children with disabilities,

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I see really benefiting from the ADU legislation in Vancouver, Washington. And so there are

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urban ADUs and rural ADUs and they're a little bit different. So an urban ADU, you're going

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to need permitting for all of this and you're going to need to comply with zoning. But if

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you have a residential home in an urban setting or what's deemed an urban setting, you can

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have an ADU as long as it is 1000 square feet or under, it needs to be 10 feet from the

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primary residence. And that's why when I have people looking for properties and they're

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interested in ADUs, I will direct them to look for properties where the primary home

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is positioned either towards the back of the lot or the front of the lot or someplace,

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usually the back or the front where you're going to be able to put an ADU without any

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problems. Now, the garage that I had was like three feet from the property line. And with

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an AD, if you're going to build it from scratch, it needs to be five feet from the property

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line unless you're doing a conversion for a garage conversion. And then you can kind

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of skirt that by being grandfathered in, which is great. And so if you can convert a structure

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that's already there, like a garage, I think that's going to be your best bet because I

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think the permitting is easier. And again, you're going to have some leniency with these

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setbacks that are required for the AD. So, but you can also do it as a basement apartment.

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So in that same house, ironically, I also have kind of a separate entrance, kind of

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like a Jack and Jill entrance. So I do have a separate entrance into the basement. So if

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I did want to put in an egress window, because that's going to be required to make it a bedroom.

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And I wanted to plum in a bathroom in a kitchen. I could also make that an ADU. And so that

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is another option for inside of a home. And that would be great for like a family member.

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I'm not sure if I want to have, you know, just a renter coming up and down the stairs,

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but maybe it's up to your comfort level. But the garage conversion or the basement apartment

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is a pretty common ADU condition or qualification. All ADUs have to comply with zoning. And they

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have to be connected to the city water and the sewer. Or in the case of a rural ADU,

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they need to be connected to your septic. And so that's a requirement. In a rural ADU,

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can be more than 1000 square feet. It could be 1500 square feet or 40% of the original

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dwelling, up to 40% of the area of the primary dwelling's living area, whichever is less.

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And I will have these regulations in the show notes so you can go and check them out for

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yourself as well. So I mentioned that the setback needs to be 10 feet from primary,

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five feet from the property line. The ADU cannot, square footage cannot exceed the square footage

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of the primary dwelling. So you cannot build, you know, something and call it an ADU or have

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an ADU that exceeds the square footage of a property. Building height is going to be 25 feet

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high in an urban setting. And you are able to have an ADU without, without required to have

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on site parking. If you have no on street parking, you may be required to have an extra spot for

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somebody. But if there is on street parking, you do not have to provide a dedicated parking spot.

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So that's really good. Structural guidelines for ADUs, they need to be in compliance with the

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architectural and building materials structure of the current primary living area. So, you know,

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you can't have something that doesn't fit in stylistically or doesn't use kind of similar

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building materials. And again, these will be posted so you can check them out yourself. It says

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you cannot establish an accessory dwelling unit if there are two or more single family

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residences on a property. It haven't really encountered that too, too much. Usually you'll

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have one primary dwelling unit and then like a single family home, and then you will have the

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ADU adjacent to that or as part of it. And let's see a little bit of some extra stuff for parking

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for rural ADUs. It says you are required to have an on site parking for a rural ADU, which makes

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sense because you'll be out in the country and there's not a lot of streets. So you have to have

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someplace for somebody to park if you have an ADU. There are impact fees associated with having

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an ADU, but Clark County is providing incentives to waive 75% of these fees for people who apply

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for ADU permits. The permitting, you know, not cheap. I got estimates to two to four grand plans

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will also run you that much. Now there are some people that have their own in-house planners

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and construction. And so there's a lot of companies out there that specialize in ADUs,

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especially in Clark County. I'll have links to those too. And so you have a lot of options

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when it comes to ADUs and I really see them taking off here. I think I've said that. I thought that

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for a couple years now and I've seen in certain neighborhoods, especially high density, very

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walkable neighborhoods, I've seen more ADUs. So, you know, Lincoln, Carter Park, how a rose village,

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and then, you know, you see them less in northern suburban areas. And that's a lot of times as a

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product of, you know, having smaller or having, you know, sometimes it's smaller lots or the way

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the homes position. It's hard to put in an ADU. So positioning of the primary homes very important.

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So I'm trying to think if I have anything else that I want to cover for ADUs. And I think that's

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it. I don't want to over speak or simply just go over all of the requirements. I think that

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generally covers them. Again, I'll have those linked in the show notes. Before I go, I did want to

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mention some information about the Washington bond program. It is a program for first time homebuyers

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and the definition of first time homebuyers can be pretty liberal. I recently had a client who

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had been divorced and so she had bought a home with her ex-husband. But now that she was a single

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mother, she was eligible again and received, you receive on average about 10 grand for down payment

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assistance. So you need to have a minimum credit score of 620 for the Washington bond program and

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a debt to income ratio that does not exceed 50%. And so Washington bond program is good for VA,

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FHA and conventional loans. You have to go through a course, I believe. So there's like kind of a

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class that you have to take to kind of educate yourself and to fulfill a requirement to be

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eligible for the Washington bond program. So it's a good way to get some help for a down payment.

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If you're wondering if your down payment is big enough or you're struggling to come up with a down

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payment, this can really help. So it covers first time homeowners as I mentioned, single parents,

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displaced homemakers and again, people who have owned a home with a spouse but are now looking

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to buy a home on their own. So I think that's going to about do it for this week's episode. I hope I

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brought some value in explaining kind of what an ADU is, who it might be for and some of the general

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outlines for the requirements by the county to build an ADU. And I thank you for watching and

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subscribing. If you've found any value with this, don't forget to like and subscribe. It does help

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the channel and I will see you next time. Take care everybody.