Innovative Models for Financing and Developing ADUs
ADUs : PART OF THE SOLUTION A concept toward efficient scale, leverage, and speed in addressing affordable housing shortages
Enhabit Background Portland pilot ( 09) grew into leading retrofit provider serving OR & WA Contractors, lenders, communities Deep retrofits $13-15K average Driving equity & diversity for workers & contractors Once in the home, there s efficiency and synergy in doing more for the homeowner and the public sector Seismic, radon, solar, health, etc.
Who is Enhabit Today? An innovative doer, with experience driving 6,000 residential projects & $100M of economic activity We advise and create solutions for homeowners, local governments, and utilities to create efficient, healthy, safe living spaces These efforts, in turn, create strong, thriving and equitable communities Mission: To create social impact through better living spaces 4
Housing affordability pilot ADUs in backyards for homeless families: 5 yrs 0 rent, then transfer to host 1100+ homeowners interested 4 open slots Testing cost innovation, community uptake, policy approach, speed 5
A Place for You ADUs Defined, selected, refined and now building 4 ADUs Design challenge Meet living requirements Achieve cost breakthrough Show rapid deployment capability Vetted over a dozen design/build firms Worked designs and costs with short list Selected two SQFT Studios: MODULAR COMPONENTS ASSEMBLED ON-SITE Wolf Industries: FACTORY BUILT, ON-SITE FOUNDATION
Market Transformation Hypothesis: Addressing Barriers Can Accelerate Deployment of ADUs It s too complicated Looks like an intense 2-year hobby (siting, permitting, etc.) Designing an ADU sounds difficult and expensive Who loves working with contractors? Financing is out of reach Not everyone has $150K - $250K of equity
Ingredients of a Facilitated ADU Acceleration Program Easy one-stop shop and facilitation Proven designs Predictable costs; some flexibility Vetted contractors Contractor and workforce equity Co-funding and waived fees in exchange for XX years of affordable housing Financing solutions tailored to ADUs Landlord training / services Targeted marketing and enrollment 8
Build Small Live Large Summit Innovative Models for Financing & Developing ADUs November 3, 2017 Patrick Quinton CEO
What is Dweller? Dweller is a startup focused on building ADUs in dense urban markets. We believe ADUs offer the opportunity to ease the housing shortage in Portland and other fast growing communities.
What do we do? Dweller builds and installs ADUs at no cost to homeowners by leasing unused backyard space and sharing the rental income with homeowners. Dweller uses modular construction processes to lower cost and shorten the construction period. Dweller ADUs are fully-constructed offsite and installed turnkey for homeowners.
Founding Team Patrick Quinton Local government Housing and small business finance Brian Lynott Residential real estate Telecom entrepreneur
State of the ADU Market Significant demand Lots of ADU design & construction options Active state and local policymaking to encourage ADUs
Constraints Pockets of regulatory resistance High Cost Lack of financing Heavy burden on homeowners
Who s left out? Majority of homeowners Limited equity Low & moderate income No appetite for construction project Long term renters
ADUs as a distinct asset class Add measurable value to the real estate Reliable source of income Potential for consistent performance across geographies
The Dweller Model ADU built off site and installed and owned by Dweller Dweller shares 30% of gross rent Dweller pays all expenses associated with ADU, including utilities and incremental property taxes Homeowner can select tenant or leave that to Dweller Homeowner can purchase ADU at any time according to declining buyout schedule After 25 years, homeowner owns ADU
Benefits to Homeowners Lower cost No financing requirement Speed Simplicity Flexibility We take the burden of financing, building and owning the ADU off the homeowner.
Partners We work with real estate brokers, lenders and property managers
Frequent Questions Does Dweller have ownership in property? Does Dweller have a mortgage? Can homeowner can sell the property?
Recommendations Lower the cost of ADUs Treat the ADU as a separate asset Solve for the low & moderate income homeowner and long term renter Assume standardization and scale Allow for market economics to work
Patrick Quinton pquinton@dweller.com @patrickquinton dweller.com @dwellerhomes 1-800-DWELLER