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GRDadof3

The "Affordable Housing" Discussion in GR

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On 1/2/2019 at 10:48 AM, organsnyder said:

Our ADU project was approved at the same Planning Commission hearing as @whitemice's project. Before us on the agenda was a project by D.A. Blodgett to build a 55,000 sqft structure and 172-space parking lot. Our ADU projects required the same paperwork (with a ton of detail irrelevant to our projects) and the same fee (now over $2k) as the D.A. Blodgett project.

The actual hearing was extremely smooth. My neighborhood association (Garfield Park) is very strong, but they have had a decidedly YIMBY stance to the zoning reforms—unlike many of the NAs in more trendy neighborhoods.

I understand the desire to have provide an opportunity for neighbors to express concerns about projects nearby—living in a historic neighborhood (though not officially designated as such), I share the desire to protect the "neighborhood fabric". But the SLU process is simply the wrong tool for projects such as ADUs. We are fortunate to have the means to make it over this high barrier to entry; it's no wonder there have been so few ADU projects, even though the ordinance has been on the books for quite some time.

BTW, I think there could be a market—if zoning reforms are passed and the right investors step up—for a company to build ADUs with a similar model that solar companies offer: The company builds a new two-story garage+ADU at no cost to the homeowner, with an agreement (attached to the deed) that the company would be able to rent out the ADU for a certain length of time (10 years? 20?) to recoup their investment and make a profit. The property owner would get a free upgraded garage and improved property value (since income/use of the ADU would revert to them at some point in the future). The community would get increased housing density with no demolition or modification to existing houses, as well as the replacement of old dilapidated garages (some neighborhoods are full of garages that are close to falling down).

A few issues with that:

) I think you'd have a lot of trouble selling a home with that kind of ADU arrangement/deed restriction on the property. That certainly would be a deal breaker for me as a buyer. 

) Having a tenant on your property that you have no control over? I guess you could write up an addendum to their lease agreement but now you're talking about a lot of complication. If there is a city violation with the ADU landlord, who gets the fine? 

) Since investors would not be able to get financing to build this ADU because it's not title to the land/landowner, it'd have to be paid for with cash. It might be as much as $100,000 in cash needed. Cheaper than buying most of the homes in GR now but still, cost prohibitive IMO. 

) Would the city look at this arrangement as a "business entity" on your property? My guess is yes. Same as if you opened a dentist office in your garage. 

Just some feedback..

The better simpler idea would just be for the homeowner to do a HELOC and build the ADU.  The value of your property will go way up and you'll easily make enough in rent to pay the HELOC payment and then some (and you get a new garage). 

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41 minutes ago, GRDadof3 said:

The better simpler idea would just be for the homeowner to do a HELOC and build the ADU. 

Maybe even some sort of Construction HELOC, so you are able to finance a portion of the application process and then make draws as you build and move through the process. Might be a little risky, but if a lender could come up with a good process for vetting the viability of an ADU, it could work.

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9 hours ago, whitemice said:

The City Commission did change that particular rule on December 18th, 2018.  The ratio is now 40%, which is far more practical.
http://urbangr.org/GRADURegs2018r2 : "The floor area of an Accessory Dwelling Unit may not exceed 40% of the gross floor area of the primary structure; with a maximum size of 850sq/ft. [5.9.03.G]. Your primary structure's gross floor area is likely larger than your "square footage" as the square footage frequently referenced is "Residential Square Footage" and does not include space below grade (the basement) - if your basement ceiling is at least 7ft high you may include that space in your calculation regarding the 40%. The 40% boundary is not a significant barrier to ADU development; prior to December 2018 the ration was 25% which was problematic. Under the 40% rule any lot with a primary structure over 1,000 sq/ft gross floor area can meet the minimum 400sq/ft size. The normal size range for ADUs in other cities is 500sq/ft - 650sq/ft which corresponds to a primary structure size of 1,250 sq/ft - 1,625sq/ft; this is the range of average home sizes in Grand Rapid's traditional neighborhoods."

That's at least some minor progress.  I looked at the write up on your blog as well as the text changes.  Not easy to find.  http://grandrapidscitymi.iqm2.com/Citizens/Detail_LegiFile.aspx?Frame=&MeetingID=4574&MediaPosition=&ID=7755&CssClass=.  It looks like a SLU permit is still required, plus they tamped them down to 20 feet UNLESS it's within the "setback of the primary structure."  Which almost no garage is.  So its 20 feet. And you can double the allowed size to accommodate the ADU.  Hopefully that means you can add stairs on the main floor in addition to the allow area of the garage.  Else, you're screwed there and sucking space out of the garage.  So that's a little dicey there.  As for height, 20 feet is tough.  9' or 10' on the first floor, then a floor joist, 8' on the second floor, then the roof.  That's 18 or 19' to the eve alone.  So you're stuck with a) dormers, b) barn style roof, or c) 8' garage ceiling.   All of those options are either awful or expensive.  And option (c) only gives you all of 6 feet from the top of the second floor to the peak.  Plus, I think dormers get counted against the measured roof height once they get big enough to be another "roof plane".  There's something about that in the regs somewhat, I think.  So dormers might not be viable.  So basically, these things are now somewhat harder to build even than before.  Boo!  How did you build yours?  

Your criticisms about killing the waivers for size and what-not were spot on.  Yeah, yeah.  This was a first effort and there were bound to be some false starts.  Hopefully they'll clean it up.  I don't think they helped the situation much.  Scrap the SLU fee and it might help, but so far its arguably one step forward and two steps back.

EDIT:  So, I checked zoning regs of other areas.  Most of them that address height allow significantly over 20 feet.  I think GR just ripped off Portland, unfortunately.  Portland has it at 20 feet.  Not surprisingly, there are a lot of weird flat roofs, single-story garage conversions, or an ADU stacked over a 20' wide garage or a single wide garage, since they can't go up with the roof much.

EDIT2:  Lots of ADU projects here:  https://accessorydwellings.org/category/projects/ (and elsewhere on the website).  I mentioned the height/cost issues before.  It's a real issue.  Given current rental rates, 95% of the stuff shown here is not viable in Grand Rapids.  The only ones that are?  The straight up two story structures with living space on top and the garage on the bottom, with a 700+ size.  That makes the roof and the foundation "free", cheap trussed roof (no dormers at $3k+ each), and drops the cost per square foot (which increases the rental return).   The current regs make this type of building tough to do.  This one here is one of the better examples of the form:  https://accessorydwellings.org/2016/11/18/al-shannon-elizondos-adu-a-houston-carriage-house/.  This is a really cheap one:  https://accessorydwellings.org/2014/01/31/lissa-matts-adu-planning-for-our-sons-future/.  I doubt the first one would fit the GR regs.  The second one might, barely.

Edited by x99

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2 hours ago, Pattmost20 said:

Maybe even some sort of Construction HELOC, so you are able to finance a portion of the application process and then make draws as you build and move through the process. Might be a little risky, but if a lender could come up with a good process for vetting the viability of an ADU, it could work.

You can get a HELOC set up and basically draw on it for whatever you want, usually 80% loan to value of whatever your home appraises for. 90% LTV interest rates are a bit higher. Banks will even give you a credit/debit card  to draw on as you pay your fees and do the work. 

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2 hours ago, GRDadof3 said:

You can get a HELOC set up and basically draw on it for whatever you want, usually 80% loan to value of whatever your home appraises for. 90% LTV interest rates are a bit higher. Banks will even give you a credit/debit card  to draw on as you pay your fees and do the work. 

That wouldn't be a bad way to go for an ADU then, my only personal experience was with a Cash Out REFI, which is capped at 80% as well.

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5 hours ago, Pattmost20 said:

That wouldn't be a bad way to go for an ADU then, my only personal experience was with a Cash Out REFI, which is capped at 80% as well.

And an $80,000 HELOC to build your ADU is interest only (usually for 10 years), so your payment is only about $375/month. You'd certainly get way more than that in rent. And you get the benefit of the new garage. Having to pay the outlandish fees to even have the city look at it though is ridiculous. Someone tell the new city manager how outrageous and un-entrepreneurial it is. :)

*Also since you're paying all interest, your entire HELOC payment is tax deductible (although the new tax laws regarding deductions may negate that for most people). 

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21 hours ago, GRDadof3 said:

I think you'd have a lot of trouble selling a home with that kind of ADU arrangement/deed restriction on the property. That certainly would be a deal breaker for me as a buyer. 

That is a real concern.  Due to the deed restriction and the Owner-Occupancy requirement someone does need to feel very secure in-place to make this kind of investment.  I discuss that in  http://urbangr.org/critiqueOfNowADU-201810  I am fourth generation in my 'hood as well as being far too financially invested in the city to leave anyway; so this was not an active concern for me - I am here for better or worse.

21 hours ago, GRDadof3 said:

Having a tenant on your property that you have no control over? I guess you could write up an addendum to their lease agreement but now you're talking about a lot of complication. If there is a city violation with the ADU landlord, who gets the fine? 

This is no different than a duplex, or any type of landlord/tenant arrangement.  I am already a landlord of another property.   This is also a design issue.  My design ensure the tenant has a semi-private way to come and go from the property as well as their own private outdoor/patio space.  ADUs vary in the degree to which they make use of shared-use space(s).   While my design leans one way, other lean the other way, and there is no demonstrable issue.

21 hours ago, GRDadof3 said:

Since investors would not be able to get financing to build this ADU because it's not title to the land/landowner, it'd have to be paid for with cash. It might be as much as $100,000 in cash needed. Cheaper than buying most of the homes in GR now but still, cost prohibitive IMO

Yes,  The Owner-Occupancy requirement destroys, burns, butchers, and slays the available financing options.   Mine is built with HELOC, cash, and a pastiche of other methods;  it will be a bit painful.   But weigh it against the cost of building a modern garage which can cost $30K-$50K.  And building a garage is nearly zero ROI, people in urban areas by houses not garages; investing in a garage won't do much if anything for you.  My accessory structure was functionally and structurally obsolete, it was only a matter of time [hopefully!] until I got a nasty yellow tag from the city.   The garage is for myself, and my family, the ADU is gravy, a rent-able dwelling unit less than a mile from Medical Mile and GVSU's medical campus for $100K-$125K .... that's hard to fail.  ~$50K was going to be spent in any case.

21 hours ago, GRDadof3 said:

Would the city look at this arrangement as a "business entity" on your property? My guess is yes. Same as if you opened a dentist office in your garage.

No.  You are expecting zoning and other regulation to have intellectual coherence.  It doesn't.  Land-Use policy and related issues are a great steaming pile of arbitrary.  Anyone who tells you otherwise is blowing smoke up your ...

21 hours ago, GRDadof3 said:

The value of your property will go way up and you'll easily make enough in rent to pay the HELOC payment and then some (and you get a new garage).

Sadly, no.  As far as the bank is concerned the ADU is worthless.   Everything concerning value is, to the bank, based on comparable.  There are none, so it has no value.   No constructions loans, nada.  You can HELOC your existing equity, and that's it.  As the property is owner occupied residential the potential rental income from the ADU is not considerable [as in, it cannot be considered].   Same as above, the rules are arbitrary, just what they are.    Also, as mentioned above, the value of a garage is less than the cost of building a garage.

13 hours ago, GRDadof3 said:

And you get the benefit of the new garage.

This!  And a garage with heat and water!!! Sweet.

13 hours ago, GRDadof3 said:

Having to pay the outlandish fees to even have the city look at it though is ridiculous. Someone tell the new city manager how outrageous and un-entrepreneurial it is.

I know [and a realize you are snarking].   :)  However, I assure, you THEY SO DO NOT CARE.   What, you want to invest in your neighborhood? Keep it local!  What all the Progressives go on-and-on about.  Nope.  It's all BS, they are full of "it".  Vote them out, that's the answer.

13 hours ago, GRDadof3 said:

your entire HELOC payment is tax deductible (although the new tax laws regarding deductions may negate that for most people).

Yep, I doubt it will be worthwhile to deduct, even for us, even with a second income property.  The new tax law is a catastrophe.   It cares as much about growing the "Middle Class" as the City Commission does [not].

Edited by whitemice

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18 hours ago, x99 said:

It looks like a SLU permit is still required, plus they tamped them down to 20 feet UNLESS it's within the "setback of the primary structure." 

I haven't looked into this enough yet to know if this is an issue, but I doubt it.  To be frank, the notion anyone has of converting an existing garage to an ADU is a pipe-dream.  Not gonna happen, particularly in the TN neighborhoods where the vast majority of garages are sitting on a slab, no footings.  You cannot add a second floor.   I would guess that all ADUs in TN neighborhoods will be demolition + new construction.    Not to mention getting in water/sewer and insulation.  If you talk to people who have been involved in ADU construction one of the very first points they will emphasize is: build, do not adapt.  Adaptation seems cheaper, then costs way more, and produces a cobbled up product.

So you move it a few feet.   3ft from the ally [which my original structure was not] and 5ft from the sides [which my original structure was not], then go up.    Also the 20ft or 25ft is not total height, that is the height to the midpoint of the peak, a weird zoning thing.   At least in Highland Park that allows a two story, with an 11ft first floor, structure on nearly every lot.  

My original accessory structure, like roughly half of those on my block, was sitting on nothing more than a line of mostly-now-crumbled bricks.  Then someone, at some point, poured a slab inside.  It was structurally unsalvageable.

For my project specifically pulling in made a better design, a bit further from the alley allows for some landscaping, making the "back" of the building more of a "front" for everyone else; such as the neighbors whose property it is adjacent too.  We specifically designed the building to have the "back" be the wall facing our house, the primary structure.  Aside: it is hard to make a garage like structure, and a pretty small living space, in the sight-line of 7 other houses, without ending up with functional "front" and "back".

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2 hours ago, whitemice said:

That is a real concern.  Due to the deed restriction and the Owner-Occupancy requirement someone does need to feel very secure in-place to make this kind of investment.  I discuss that in  http://urbangr.org/critiqueOfNowADU-201810  I am fourth generation in my 'hood as well as being far too financially invested in the city to leave anyway; so this was not an active concern for me - I am here for better or worse.

This is no different than a duplex, or any type of landlord/tenant arrangement.  I am already a landlord of another property.   This is also a design issue.  My design ensure the tenant has a semi-private way to come and go from the property as well as their own private outdoor/patio space.  ADUs vary in the degree to which they make use of shared-use space(s).   While my design leans one way, other lean the other way, and there is no demonstrable issue.

Yes,  The Owner-Occupancy requirement destroys, burns, butchers, and slays the available financing options.   Mine is built with HELOC, cash, and a pastiche of other methods;  it will be a bit painful.   But weigh it against the cost of building a modern garage which can cost $30K-$50K.  And building a garage is nearly zero ROI, people in urban areas by houses not garages; investing in a garage won't do much if anything for you.  My accessory structure was functionally and structurally obsolete, it was only a matter of time [hopefully!] until I got a nasty yellow tag from the city.   The garage is for myself, and my family, the ADU is gravy, a rent-able dwelling unit less than a mile from Medical Mile and GVSU's medical campus for $100K-$125K .... that's hard to fail.  ~$50K was going to be spent in any case.

No.  You are expecting zoning and other regulation to have intellectual coherence.  It doesn't.  Land-Use policy and related issues are a great steaming pile of arbitrary.  Anyone who tells you otherwise is blowing smoke up your ...

Sadly, no.  As far as the bank is concerned the ADU is worthless.   Everything concerning value is, to the bank, based on comparable.  There are none, so it has no value.   No constructions loans, nada.  You can HELOC your existing equity, and that's it.  As the property is owner occupied residential the potential rental income from the ADU is not considerable [as in, it cannot be considered].   Same as above, the rules are arbitrary, just what they are.    Also, as mentioned above, the value of a garage is less than the cost of building a garage.

This!  And a garage with heat and water!!! Sweet.

I know [and a realize you are snarking].   :)  However, I assure, you THEY SO DO NOT CARE.   What, you want to invest in your neighborhood? Keep it local!  What all the Progressives go on-and-on about.  Nope.  It's all BS, they are full of "it".  Vote them out, that's the answer.

Yep, I doubt it will be worthwhile to deduct, even for us, even with a second income property.  The new tax law is a catastrophe.   It cares as much about growing the "Middle Class" as the City Commission does [not].

I was mainly talking about Organsnyder's idea of allowing an investor to build an ADU on your property that the investor would own, and the investor renting it out to pay off their investment. That to me seems like it'd be treated as a "business entity" by the city.  You as the homeowner would not be the landlord. I'm not crazy about that idea. 

Your home will be worth more with a new garage and a living space above it, trust me. Whether the bank sees value in it or not for an appraisal, the real estate market will value it. As long as you OWN the ADU. 

Plus every urbanite I know bitches on FB every time they have to scrape their car windows. Anyone who says they don't love a garage is not someone I'd have anything in common with. :)

1 hour ago, whitemice said:

I haven't looked into this enough yet to know if this is an issue, but I doubt it.  To be frank, the notion anyone has of converting an existing garage to an ADU is a pipe-dream.  Not gonna happen, particularly in the TN neighborhoods where the vast majority of garages are sitting on a slab, no footings.  You cannot add a second floor.   I would guess that all ADUs in TN neighborhoods will be demolition + new construction.    Not to mention getting in water/sewer and insulation.  If you talk to people who have been involved in ADU construction one of the very first points they will emphasize is: build, do not adapt.  Adaptation seems cheaper, then costs way more, and produces a cobbled up product.

So you move it a few feet.   3ft from the ally [which my original structure was not] and 5ft from the sides [which my original structure was not], then go up.    Also the 20ft or 25ft is not total height, that is the height to the midpoint of the peak, a weird zoning thing.   At least in Highland Park that allows a two story, with an 11ft first floor, structure on nearly every lot.  

My original accessory structure, like roughly half of those on my block, was sitting on nothing more than a line of mostly-now-crumbled bricks.  Then someone, at some point, poured a slab inside.  It was structurally unsalvageable.

For my project specifically pulling in made a better design, a bit further from the alley allows for some landscaping, making the "back" of the building more of a "front" for everyone else; such as the neighbors whose property it is adjacent too.  We specifically designed the building to have the "back" be the wall facing our house, the primary structure.  Aside: it is hard to make a garage like structure, and a pretty small living space, in the sight-line of 7 other houses, without ending up with functional "front" and "back".

What's the going rate for demo of a garage and slab these days? Seems like it was $10,000 about 10 years ago on another project I worked on. 

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I talked to a builder this morning . He just happens to be working on a garage removal and replacement. $4000 to tear down the old and pull the floor and footings.  A lot of the cost is in disposing of the old wood and the broken up concrete. It has to go to a landfill licensed for Construction and Demolition material (C&D)

Edited by Raildude's dad
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47 minutes ago, Raildude's dad said:

I talked to a builder this morning . He just happens to be working on a garage removal and replacement. $4000 to tear down the old and pull the floor and footings.  A lot of the cost is in disposing of the old wood and the broken up concrete. It has to go to a landfill licensed for Construction and Demolition material (C&D)

Good to know.

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11 hours ago, whitemice said:

So you move it a few feet.   3ft from the ally [which my original structure was not] and 5ft from the sides [which my original structure was not], then go up.    Also the 20ft or 25ft is not total height, that is the height to the midpoint of the peak, a weird zoning thing.   At least in Highland Park that allows a two story, with an 11ft first floor, structure on nearly every lot.  

Right, but that wouldn't be possible to do with a "full" second floor.  With 11ft on the first floor (which is what you'd want for fun stuff like a car lift to put that sports car on in the winter)... you'd be at 20 feet already at the EVE on the 2nd floor.  You really need more height than 20' to pull this off and have a) no dormers and b) more than 8' on the first floor.  An 8' ceiling isn't the end of the world, but it's not much fun in a garage, either.  I think most residential attached garages are at 10'.  

But... if you can indeed pull off an ADU for 100k with the garage, that's not bad.  Pays for itself.  Now they just have to scrub the stupid fees, and tweak the height a little to make the less bold willing to make the jump. 

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2 hours ago, x99 said:

Right, but that wouldn't be possible to do with a "full" second floor.  With 11ft on the first floor (which is what you'd want for fun stuff like a car lift to put that sports car on in the winter)... you'd be at 20 feet already at the EVE on the 2nd floor.  You really need more height than 20' to pull this off and have a) no dormers and b) more than 8' on the first floor.  An 8' ceiling isn't the end of the world, but it's not much fun in a garage, either.  I think most residential attached garages are at 10'.  

But... if you can indeed pull off an ADU for 100k with the garage, that's not bad.  Pays for itself.  Now they just have to scrub the stupid fees, and tweak the height a little to make the less bold willing to make the jump. 

$100k would be a stretch. In today's market, you're probably at $130k minimum. Ours is quite a bit higher (though it's a large structure—864 sqft each floor).

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3 hours ago, x99 said:

But... if you can indeed pull off an ADU for 100k with the garage, that's not bad.

I meant the 100K was in addition to the garage, which was going to be built anyway.  Personally - for my math - I view $50K as sunk; that's demolition [which would happen anyway], tree removal and trimming [which would happen anyway], and garage construction.  I'm willing to "pay" for the garage, the ADU pays for itself.  In terms of taxes one can write of the 2/3 of the project as an investment and $4K for maintenance, just like any investment property.

13 hours ago, GRDadof3 said:

Plus every urbanite I know beotches on FB every time they have to scrape their car windows. Anyone who says they don't love a garage is not someone I'd have anything in common with.

I have no intention of parking vehicles in the garage,  everyone in my family parks outside on the street.  West Michigan winters are not really a significant issue;  I feel our winters are immensly exaggerated.  We get a blizzard or two a year, the snow lasts a week, and otherwise it doesn't interfere with life.  Watching everyone freak the hell out is the best part of winter.

13 hours ago, GRDadof3 said:

I was mainly talking about Organsnyder's idea of allowing an investor to build an ADU on your property that the investor would own, and the investor renting it out to pay off their investment. That to me seems like it'd be treated as a "business entity" by the city.  You as the homeowner would not be the landlord. I'm not crazy about that idea. 

If it works for someone, hey, whatever. I am doubtful it will come to Grand Rapids, our rate of ADU development is going to be far too low.  (Unless I am wrong, and the City Commission gets its act together - I would love to be wrong).

1 hour ago, organsnyder said:

$100k would be a stretch. In today's market, you're probably at $130k minimum. Ours is quite a bit higher (though it's a large structure—864 sqft each floor).

Agree.  We are $150-175 for 522sq/ft.   There is probably an economies of scale involved;  a two story building is going to cost ~$120, just for design, permits, labor and utilities.

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14 hours ago, organsnyder said:

$100k would be a stretch. In today's market, you're probably at $130k minimum. Ours is quite a bit higher (though it's a large structure—864 sqft each floor).

864 is pretty huge for a garage. I think you could easily get away with 20 wide x26 deep, or even smaller and deeper for a one stall garage (18x26 or 28 for instance). I think too using panelized systems might cut the cost quite a bit. $50,000 for a standalone 2 stall garage seems steep to me but I haven't built just a garage before. 

520 sf or 480 sf should be plenty for a 1 bedroom apartment or a large studio with some modular systems like what Urbaneer builds. 

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On 1/5/2019 at 11:35 AM, GRDadof3 said:

520 sf or 480 sf should be plenty for a 1 bedroom apartment or a large studio with some modular systems like what Urbaneer builds.

Ours is 522sq/ft. and at the point where it has interior walls now.   It feels quite roomy;  that is enough space for a large (48") shower and pretty generous closet.  Or generous at least in the context of most closets in TN neighborhoods - - - it is certainly larger than any in our primary structure!   And it has a second closet for washer and dryer.

We intend to have an Urbaneer kicthen, as you mention, which is a lot in a small space - plus induction cooktops mean NO FLAME, which is nice from a Landlord perspective.  If the tenants used a murphy bed in the bedroom they'd have a lot of working space for whatever.   In my mother's house we have a murphy bed that when flipped up is a DESK!  You can leave everything, computer, etc..., on the desk when you flip it down, then bring your desk right back up again.  There are many cool solutions these days - - - one can very much make the trade off of BETTER SPACE vs. simply MORE SPACE.

Vaulted ceiling help enormously in the smaller living quarters, for the sq/ft you get a lot of cu/ft.

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2 hours ago, whitemice said:

Ours is 522sq/ft. and at the point where it has interior walls now.   It feels quite roomy;  that is enough space for a large (48") shower and pretty generous closet.  Or generous at least in the context of most closets in TN neighborhoods - - - it is certainly larger than any in our primary structure!   And it has a second closet for washer and dryer.

We intend to have an Urbaneer kicthen, as you mention, which is a lot in a small space - plus induction cooktops mean NO FLAME, which is nice from a Landlord perspective.  If the tenants used a murphy bed in the bedroom they'd have a lot of working space for whatever.   In my mother's house we have a murphy bed that when flipped up is a DESK!  You can leave everything, computer, etc..., on the desk when you flip it down, then bring your desk right back up again.  There are many cool solutions these days - - - one can very much make the trade off of BETTER SPACE vs. simply MORE SPACE.

Vaulted ceiling help enormously in the smaller living quarters, for the sq/ft you get a lot of cu/ft.

Do you have an outdoor patio or at least a slider with a juliet balcony?  I feel like that opens up a space a great deal as well. 

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17 hours ago, GRDadof3 said:

Do you have an outdoor patio or at least a slider with a juliet balcony?  I feel like that opens up a space a great deal as well. 

Agree, but no.  It is something we talked about. However, that would be a very bold design to try for Special Land Use;  the SLU process incentivizes vanilla designs.  Accessory Structures must "match" the Primary Structure.  Who wants to risk ~$5K on the meaning of "match"?  Best to stick to the median, avoid having extraneous features.  If someone wanted to be a stickler even our one brick wall could be argued out of the meaning of "match" as the code specifically mentions material types.  If we want top-notch designs we need by-right development.

We have no swinging doors in the dwelling, and the bedroom and general purpose living area, oriented east-west, are separated by large sliding doors, so the space can be open.  And there are aligned east-west windows;  the south wall has high transom style windows for southern light, but above the sight line of the resident [or someone in the second story of the Primary Structure].   Window placement is a challenge in an ADU placed into a thick neighborhood.  One has to avoid positioning anything that creates even the sense of "looking into" another house - - - and certainly nobody wants their bedroom open to the window of their landlord's home office! :)  There are a lot of constraints.

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On 1/4/2019 at 9:09 PM, organsnyder said:

$100k would be a stretch. In today's market, you're probably at $130k minimum. Ours is quite a bit higher (though it's a large structure—864 sqft each floor).

I would view what you did as a minimum reasonable and economical size.  Whitemice's $100k for a 500 square foot structure doesn't offer the sort of returns most not fully committed urbanists would be willing to invest in.   It is awesome that he did it, but most people won't.  My maths on these things is as follows.  With rents at, say, $800 for a very small single and $1100 for a two bedroom, you're at $9600 for rents on that single.  (Am I way off base on that?) Now take into account vacancy and credit losses, and you're at $9000 a year.  Since it costs $100k+ to build, I'll assume the assessor will assess accordingly, and you'll get dinged for the full $25000 of non-homestead taxes on it.  Now we're down to $6500 a year before paying any other expenses.  That's worse than a 6.5% return for having people living in your backyard in someone you get nothing for if you sell.  At $1100, or even $1250 depending on neighborhood, you've got something that works, and which doesn't really cost anything more to build since the bulk of the investment is in the plumbing and electrical service, kitchens, and baths.  Since the main structure requires a 25' setback, the height limit for a garage ADU is indeed 20' to the midline.  Very hard to do with a 800+sf garage without dormers.  Which are EXPENSIVE.  I'm sticking to my guns for now with the claim that the city just made things worse, not better.  This isn't Portland-style rents, and they did not take that into account when coming up with these regs which force very costly and/or impractical structures and which are now NON-WAIVABLE.

And I would disagree with GRDad that 864sf is big for a garage.  It's not.  That's a standard 2 and a half stall garage with two 9' garage doors.  A standard 24x26 two stall is two stall is 624 square feet.  Those old 20x20s were designed to hold a Model T and some junk.  Not two SUVs, a lawn mower, snow blowers, and everything else.  That's why most of them are full of junk and not cars.

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11 minutes ago, x99 said:

I would view what you did as a minimum reasonable and economical size.  Whitemice's $100k for a 500 square foot structure doesn't offer the sort of returns most not fully committed urbanists would be willing to invest in.   It is awesome that he did it, but most people won't.  My maths on these things is as follows.  With rents at, say, $800 for a very small single and $1100 for a two bedroom, you're at $9600 for rents on that single.  (Am I way off base on that?) Now take into account vacancy and credit losses, and you're at $9000 a year.  Since it costs $100k+ to build, I'll assume the assessor will assess accordingly, and you'll get dinged for the full $25000 of non-homestead taxes on it.  Now we're down to $6500 a year before paying any other expenses.  That's worse than a 6.5% return for having people living in your backyard in someone you get nothing for if you sell.  At $1100, or even $1250 depending on neighborhood, you've got something that works, and which doesn't really cost anything more to build since the bulk of the investment is in the plumbing and electrical service, kitchens, and baths.  Since the main structure requires a 25' setback, the height limit for a garage ADU is indeed 20' to the midline.  Very hard to do with a 800+sf garage without dormers.  Which are EXPENSIVE.  I'm sticking to my guns for now with the claim that the city just made things worse, not better.  This isn't Portland-style rents, and they did not take that into account when coming up with these regs which force very costly and/or impractical structures and which are now NON-WAIVABLE.

And I would disagree with GRDad that 864sf is big for a garage.  It's not.  That's a standard 2 and a half stall garage with two 9' garage doors.  A standard 24x26 two stall is two stall is 624 square feet.  Those old 20x20s were designed to hold a Model T and some junk.  Not two SUVs, a lawn mower, snow blowers, and everything else.  That's why most of them are full of junk and not cars.

I build and sell homes for a living. :) A standard new 2 stall garage for the top 10 builders in the area is 22x22. Maybe 22x24 but most builders don't do that size as standard. A standard 3 stall garage is 22 x 22 for the 2 stall and 20x12 for the 3rd stall. A 2 1/2 stall garage is 22x22 with a 4x20 addition. That's pretty much what you'll find with Eastbrook, Allen Edwin, Tibbe, Roersma & Wurn, etc etc..  Obviously they'll go bigger but not often unless you get up in the $400+ price range. I challenge you to find an 864 square foot garage in the burbs (some developments don't even allow you to make them that big) that's not on a $million home. 

I would especially think on a postage stamp sized lot in the city that you wouldn't want anything bigger than 22x22 or 22x24. Would you have any yard left at 864 square feet on a standard city lot. 

Also, an ADU if it's built by you on the property would not be separately assessed as non-homestead, if it's on the same PP. It would be treated as an outbuilding with living quarters and rolled into the primary. The assessor won't care if you rent it or not, that would have no bearing on the TV/SEV. 

A completely separate standalone 500 square foot 1 bedroom apartment would easily fetch $1000/month, in the right neighborhoods (any neighborhood not riddled with crime). 

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Yes, 864 sqft is quite large—we wanted additional space besides car storage. Our lot is very large by city standards—3/4-acre—so we still have plenty of yard left.

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45 minutes ago, organsnyder said:

Yes, 864 sqft is quite large—we wanted additional space besides car storage. Our lot is very large by city standards—3/4-acre—so we still have plenty of yard left.

Yes, it sounds awesome. I'd love to have an additional garage (barn) that big. :)

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7 hours ago, x99 said:

I would view what you did as a minimum reasonable and economical size.  Whitemice's $100k for a 500 square foot structure doesn't offer the sort of returns most not fully committed urbanists would be willing to invest in.   It is awesome that he did it, but most people won't.  My maths on these things is as follows.  With rents at, say, $800 for a very small single and $1100 for a two bedroom, you're at $9600 for rents on that single.  (Am I way off base on that?) Now take into account vacancy and credit losses, and you're at $9000 a year.  Since it costs $100k+ to build, I'll assume the assessor will assess accordingly, and you'll get dinged for the full $25000 of non-homestead taxes on it.  Now we're down to $6500 a year before paying any other expenses.  That's worse than a 6.5% return for having people living in your backyard in someone you get nothing for if you sell.  At $1100, or even $1250 depending on neighborhood, you've got something that works, and which doesn't really cost anything more to build since the bulk of the investment is in the plumbing and electrical service, kitchens, and baths.  Since the main structure requires a 25' setback, the height limit for a garage ADU is indeed 20' to the midline.  Very hard to do with a 800+sf garage without dormers.  Which are EXPENSIVE.  I'm sticking to my guns for now with the claim that the city just made things worse, not better.  This isn't Portland-style rents, and they did not take that into account when coming up with these regs which force very costly and/or impractical structures and which are now NON-WAIVABLE.

And I would disagree with GRDad that 864sf is big for a garage.  It's not.  That's a standard 2 and a half stall garage with two 9' garage doors.  A standard 24x26 two stall is two stall is 624 square feet.  Those old 20x20s were designed to hold a Model T and some junk.  Not two SUVs, a lawn mower, snow blowers, and everything else.  That's why most of them are full of junk and not cars.

Also you mention vacancies but with the current market the way it is, you should not have any vacancies at least for the next few years (or foreseeable future). My two rental homes I usually get 30 - 40 interested renters every time I have an opening, and that's the same story with everyone I know who owns a rental home. 

I don't foresee this changing any time soon even if the market slows down early 2020 or late 2020 or whenever it may eventually slow down. If interest rates continue to rise, renting becomes more attractive. If interest rates hold steady and builders are able to  add to inventory, that won't lessen the demand on rentals very much. If developers keep building $2/sf apartments, that will push even more people to rent homes and ADU's. 

YMMV

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7 hours ago, GRDadof3 said:

I build and sell homes for a living. :) A standard new 2 stall garage for the top 10 builders in the area is 22x22. Maybe 22x24 but most builders don't do that size as standard. A standard 3 stall garage is 22 x 22 for the 2 stall and 20x12 for the 3rd stall. A 2 1/2 stall garage is 22x22 with a 4x20 addition. That's pretty much what you'll find with Eastbrook, Allen Edwin, Tibbe, Roersma & Wurn, etc etc..  Obviously they'll go bigger but not often unless you get up in the $400+ price range. I challenge you to find an 864 square foot garage in the burbs (some developments don't even allow you to make them that big) that's not on a $million home. 

I would especially think on a postage stamp sized lot in the city that you wouldn't want anything bigger than 22x22 or 22x24. Would you have any yard left at 864 square feet on a standard city lot. 

Also, an ADU if it's built by you on the property would not be separately assessed as non-homestead, if it's on the same PP. It would be treated as an outbuilding with living quarters and rolled into the primary. The assessor won't care if you rent it or not, that would have no bearing on the TV/SEV. 

A completely separate standalone 500 square foot 1 bedroom apartment would easily fetch $1000/month, in the right neighborhoods (any neighborhood not riddled with crime). 

But when you add the third stall, you're easily over 700.  And that third stall is fairly common tract house design now--that's how they managed to suck down the rest of it down to 22x22.  Otherwise is just barely enough to fit two cars in.   If you do two 9' doors you're automatically at 24'.   An ADU needs stairs, so there's another 3'.  But since we build garages in multiples of 4, you're at a 28' wide minimum for an ADU garage.  And depth, well... No one is going to build something 20' deep on purpose.  They'll go to 24 or 28 to be able to fit stuff.  So that's a 700+ square foot garage right there.  Yes, whitemice built smaller, but per the PC minutes it wasn't entirely financially motivated.  We're talking about making these things commonplace.  Building 500 square foot efficiency apartments over a garage to make money does not make sense (or cents... hahaha).  (Checking Craigslist, I'm not convinced you could rent 500 square feet for a grand.  No one is asking that much for anything in Grand Rapids that doesn't have utilities.)

I think you need to go to 700+ to make it financially viable.  And then you need to NOT have dormers.  Which again, are wildly expensive (siding, insulating, framing, roofing--all go way up).  You need a simple trussed roof.  I checked the PC minutes.  Both organsynder and whitemice used no dormers, went over the now mandatory 20' maximum (unless you can manage to site it more than 25' off the rear property line, which few can), and per comments here, they both spent $100k+ on just the ADU.  And they were both just economical boxes.  So the city just banned (on most lots) duplicates of the only two ADUs that anyone has built in years.  New ones MUST cost more (barring the rare ultradeep lot).  Hence my conclusion that they have done nothing to make an ADU more viable.  Just the opposite.  Even if they scrub the $2000 SLU fee, the construction costs just ballooned by over $10,000 thanks to their shiny new height limit (presumably to encourage or requirement those pretty but pricey dormers).  Good intentions, but a major misfire.   

 

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13 minutes ago, GRDadof3 said:

don't foresee this changing any time soon even if the market slows down early 2020 or late 2020 or whenever it may eventually slow down.

Same here.  I've actually been contacted by people asking when the unit will be available and if I already had tenants lined up, just because they saw it online.   I had one person offer me a cash deposit.   I already have tenants lined up.  Not to mention there are many many lots near universities and hospitals in Grand Rapids - those areas are, IMNSHO, solid rental investments.

7 hours ago, GRDadof3 said:

challenge you to find an 864 square foot garage in the burbs

And you certainly are not going to find one in the "trendy" neighborhoods.

7 hours ago, x99 said:

That's worse than a 6.5% return for having people living in your backyard in someone you get nothing for if you sell.

Even in this very worst case calculation the income is there when I retire, in ~15 years, when the unit is completely paid off [and all my other property].   I'm long range planning.  As are some of the other people I've talked to.   Retiring on Savings is a complete pipe dream for most people.

7 hours ago, GRDadof3 said:

I would especially think on a postage stamp sized lot in the city that you wouldn't want anything bigger than 22x22 or 22x24.

There are a surprising number of larger lots in the city.  There is a roughly one double lot on every block in western Highland Park.  I believe that was a design feature of the Montgomery Subdivision plan.   I am happy with my plan, but if under the current 40% rule, I might have gone a bit larger, by a couple of feet - as it was I was already over the old 25% rule.   With a 5,700sq/ft lot - the standard lot size here - the ADU + the house - there is still significant greenspace.  It does not feel crowded.

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