real estate investing

Housing Investing Strategies From The Pacific Northwest

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Among the most progressive housing policy in all of the United States is located in the Pacific Northwest, namely 2 cities - Portland, Oregon, and Seattle, Washington. 

At the end of June, I had spent time in these 2 cities to learn about their stance towards housing intensification and second suite policy - they refer to them more as Accessory Dwelling Units (ADUs). The idea is to try and bring successful investment solutions back here in the GTA.

Weird indeed - in a good way!

Weird indeed - in a good way!

Although both of these cities face many housing challenges similar to any medium or large city, they have been able to do one very important thing which many cities struggle with. 

They are able to bridge Design & Construction with Finance & Real Estate. In many cases, the issues aren’t so much the design aspect of the ADU’s, but rather the question of how to make it a financially viable real estate product that fit within the constraints of local by-laws.

I’d like to share examples of really cool projects seen in both these cities, many of which are creative strategies that can be employed by both investors or homeowners to create good housing options, and turn a decent profit. 

The 3rd leg of my trip took me to Vancouver, BC, which is the 2nd most expensive city in the world (after Hong Kong). That’s saying quite a bit. 

Their policies have changed quite drastically recently, with some very interesting options for investors. Will save this for the next article, but here’s a hint: “condoizing” individual suites within a single house, and then selling them individually.

Portland, Oregon

The first stop was Portland, Oregon. Despite the recent political insanity, it’s a very progressive city in terms of housing, with nice, small walkable city blocks, and great public transit with bikeable streets. It’s one of the few cities in the U.S. with electric trams (known as streetcars where we’re from).

I attended the inaugural Accessory Dwelling Academy training, with 120 other ADU advocates from around the US (I was the lone Canadian). This event was partially held by Accessory Dwelling Strategies LLC. - headed up by Kol Peterson, author of Backyard Revolution, a great book on the building and financing ADU construction. 

Hanging out with Kol Peterson, author of Backdoor Revolution and organizer of the inaugural Accessory Dwelling Academy in Portland

Hanging out with Kol Peterson, author of Backdoor Revolution and organizer of the inaugural Accessory Dwelling Academy in Portland

Learned a ton from practitioners across America!

Learned a ton from practitioners across America!

Day 2 involved touring 17 homes in the Portland area that showcased amazing ADU strategies. Here’s a sample of a few:

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Townhouse complex with 2nd suites on the main floor - Designer: WaechterArchitecture.com

Townhouse complex with 2nd suites on the main floor - Designer: WaechterArchitecture.com

Main floor studio second suites (that can be used in conjunction with upper units if desired)

Main floor studio second suites (that can be used in conjunction with upper units if desired)

A pretty non-descript bungalow from the street

A pretty non-descript bungalow from the street

A different world in the backyard! There is a detached unit in the backyard (middle), and another tiny house on the right. 3 units in 1! Owner lives in the middle while renting out the main house. Tiny house is an Airbnb. Party central! Builder: Sprucebox Construction

A different world in the backyard! There is a detached unit in the backyard (middle), and another tiny house on the right. 3 units in 1! Owner lives in the middle while renting out the main house. Tiny house is an Airbnb. Party central! Builder: Sprucebox Construction

Looks like a normal house but this is a detached accessory dwelling unit (ADU) on same lot as the main house (to the right). Owner lives here and rents out main house which helps cover all construction costs and mortgage of main house - Designer: EmzedArchitecture.com

Looks like a normal house but this is a detached accessory dwelling unit (ADU) on same lot as the main house (to the right). Owner lives here and rents out main house which helps cover all construction costs and mortgage of main house - Designer: EmzedArchitecture.com

Here’s one with a beautiful basement apartment

Here’s one with a beautiful basement apartment

This basement apartment spared no expense with the large windows and additional landscaping - Designer: GustoDesignStudio.com

This basement apartment spared no expense with the large windows and additional landscaping - Designer: GustoDesignStudio.com

This basement window is approx. 8 feet wide x 4 feet high. With some expensive landscaping work outside. Not only does this meet escape and lighting needs, it also creates a space that feels nothing like a basement suite.

This basement window is approx. 8 feet wide x 4 feet high. With some expensive landscaping work outside. Not only does this meet escape and lighting needs, it also creates a space that feels nothing like a basement suite.

The amount of natural lighting created in the basement is incredible!

The amount of natural lighting created in the basement is incredible!

Another very non-descript house from the street

Another very non-descript house from the street

The backyard shows a brand new detached house - Designer: Placeship.net

The backyard shows a brand new detached house - Designer: Placeship.net

2 bedrooms on the main level. This is the open concept living/dining/kitchen space on the 2nd level.

2 bedrooms on the main level. This is the open concept living/dining/kitchen space on the 2nd level.

Here’s the shared backyard space between the main house and the detached suite in the back - There’s no shortage of outdoor amenity space.

Here’s the shared backyard space between the main house and the detached suite in the back - There’s no shortage of outdoor amenity space.

The big take-away from Portland is the creative ways you can add additional units to an existing property. These multiple houses on a single lot is a great way for investors to add multiple streams of income for a single property. Many of these detached accessory suites are almost the size of regular houses.

Seattle, Washington

Next, I hopped on an Amtrak to Seattle to connect with some local professionals in the ADU space and other high density housing. 25 years ago, Seattle was a small city known mostly for grunge rock, but has since been transformed into a tech giant with the likes of Microsoft, Amazon, and Expedia. A few other notable companies based in Seattle that you might be familiar with include Boeing, Starbucks and Costco.

Amazon Sphere’s are the landmarks that define its headquarters

Amazon Sphere’s are the landmarks that define its headquarters

It felt weird walking into the store, grabbing a burrito and leaving without paying. Then I saw the bill on my Amazon account!

It felt weird walking into the store, grabbing a burrito and leaving without paying. Then I saw the bill on my Amazon account!

Amazon has all but transformed a large section of downtown, turning empty lots into massive towers with green spaces. The construction activity by this company that used to sell books online is quite impressive.

Here are some photos from the trip, and also some examples of unique housing that we have seen throughout the city. Many of the best and most profitable projects involve infill development.

Hung out with Seattle developer Gary Olmeim of Hybridarc.com on the 2nd leg of my Pacific Northwest tour on 2nd suites and infill development. Were standing at the base of the headquarters, at 2120 Restaurant (which he built), and run by Milan Uzelac (from Toronto!)

Hung out with Seattle developer Gary Olmeim of Hybridarc.com on the 2nd leg of my Pacific Northwest tour on 2nd suites and infill development. Were standing at the base of the headquarters, at 2120 Restaurant (which he built), and run by Milan Uzelac (from Toronto!)

With the influx of all the tech workers, this city is also facing a housing crisis, and their response is incredible. Check out the next few photos to see what type of housing intensification they are doing. 

Here’s a model of 4 new houses that were constructed on what was a single family lot approx. 50’ x 160’. Only 1 parking space is required for each house.

Here’s a model of 4 new houses that were constructed on what was a single family lot approx. 50’ x 160’. Only 1 parking space is required for each house.

Here’s what it looks like in real life (rear)

Here’s what it looks like in real life (rear)

Interior

Interior

Front

Front

Gary’s next development project. This old bungalow is coming down, and there will be 2 small apartment buildings going up with 15 micro-unit apartments with each being approximately 300 SF. Perfect for professional tech workers in Seattle. Parking spaces required: zero!!

Gary’s next development project. This old bungalow is coming down, and there will be 2 small apartment buildings going up with 15 micro-unit apartments with each being approximately 300 SF. Perfect for professional tech workers in Seattle. Parking spaces required: zero!!

3 Townhouses on a single family lot. Lower level usually has a “flex space” with studio apartment with kitchenette that can be used by family members or rented out through Airbnb.

3 Townhouses on a single family lot. Lower level usually has a “flex space” with studio apartment with kitchenette that can be used by family members or rented out through Airbnb.

Gary’s company (hybridarc.com) is involved in container home development. Unfortunately at this time it’s more of a novelty than a financially viable housing model.

Gary’s company (hybridarc.com) is involved in container home development. Unfortunately at this time it’s more of a novelty than a financially viable housing model.

I stayed in this Airbnb, which is an infill development of 4 new houses in a single lot (2 in front and 2 in the back). 1 parking space required in each house at the front.

I stayed in this Airbnb, which is an infill development of 4 new houses in a single lot (2 in front and 2 in the back). 1 parking space required in each house at the front.

Here’s the walking path leading to the other 2 houses in the back

Here’s the walking path leading to the other 2 houses in the back

The big takeaway from Seattle is how they are able to maximize single family lots for additional housing, utilizing the entire lot for multiple structures. This strategy doesn’t work without their progressive stance towards parking. Eliminating minimum parking requirements, and encouraging walking, public transit and biking in established neighbourhoods make many of these developments feasible.

Hopefully these examples inspire you to take a different view on investing and development. There are incredible opportunities everywhere, right in your backyard (literally!). 

The key is to think outside of the box of investing is just a regular single family home or apartment.

What do you think about these strategies? Share your comments below.