Dweller builds and installs prefab accessory dwelling units ("ADUs") in a low cost, efficient manner to allow as many homeowners as possible to benefit from this source of extra income and desperately needed housing.
Dweller plans to develop their next eight ADUs in Portland, Oregon over a 12-month period. “The number of households adding ADUs to residential properties has quickly grown during the pandemic” according to Planetizen. And Dweller plans to address that surge. ADUs are legal housing units, typically in the backyards of existing single-family properties and either attached to or detached from the primary residence. The advantages of ADUs include:
- No land acquisition cost
- No additional infrastructure
- Dispersion of new housing units in existing neighborhoods
- Minimal environmental footprint
Because of these advantages, states and cities throughout the United States have updated zoning and building codes to encourage the development of ADUs. While fee and permitting hassles remain, nearly all property owners on the West Coast have the legal right to develop an ADU on their residentially zoned properties.
Dweller’s approach to developing ADUs offers an opportunity to invest in affordable housing built at a cost-effective price. Dweller’s units will be constructed at an average cost of $115,000 compared to the average costof a new affordable rental unit in Portland, OR of $225,000. This lower development cost creates a financially sustainable model for building affordable housing.
In addition, Dweller’s model will assist homeowners currently unable to afford the purchase of an income earning ADU. Home equity financing is the primary means for homeowners to finance the purchase of an ADU, leaving homeowners without significant equity on the sidelines. Connecting homeowners without equity to this income earning opportunity is particularly important in helping ADUs achieve their potential for assisting low- and moderate-income homeowners.
By investing the value of its existing ADU portfolio into this transaction, Dweller is providing predictable cash flow at the beginning of this investment while the eight new units are being developed and rented. This early cash flow allows for the payment of an immediate preferred return to investors.