'Smaller units are sometimes attractive for a single renter'

'Smaller units are sometimes attractive for a single renter'
Ryan Davies walks into his accessory dwelling unit behind his home in Bend, Ore., on Thursday, March 21, 2013. (AP Photo/The Bulletin, Ryan Brennecke)

BEND, Ore. (AP) — Homebuilding made a comeback in Bend last year, led by a trend away from the luxury real estate typical during the bubble and toward scaled-down projects for the price-conscious buyer. The 452 single-family home permits issued by the city in 2012 outpaced the 406 issued in 2010 and 2011 combined, Bend permit records show.

But the homes were considerably smaller than their prerecession counterparts — about 15 percent smaller on average than those permitted in 2007.

Builders pushed the limits on size when Central Oregon home prices soared to record highs during the last decade. But some building companies found renewed success in 2012 by shifting away from the high-end properties that put Bend on the map, eyeing smaller, economical homes instead.

At the same time, an increasing number of Bend residents are looking for extra income by building small, second properties on their lots and renting them out.

A 480-square-foot home may seem like a tight squeeze. But Ryan Davies hopes it's an investment.

Davies bought a $249,000 home on Northwest Hartford Avenue in October, and he bought with a plan: Tear down the old garage in the back of his lot and replace it with a rental property, to offset part of his mortgage payments.

"I don't know if (buying) would have worked without the plan to have that additional income coming from the rental," said Davies, 26, who runs a small energy efficiency consulting company in Bend.

The extra unit doesn't leave much space to stretch out but does include a bedroom, small living room, bathroom and kitchen. And it could bring Davies $700 to $750 a month in rent, while he and his fiancee, Justine Smith, live in the main house.

"It's on the west side, so I think it could be a pretty ideal location for a college student or someone like that," Davies said.

Across Bend, more homeowners are looking to build second homes on lots they own.

The Bend Community Development Department received 15 applications for accessory dwelling units in the last seven months. That's more applications than the city received between 2009 and 2011.

Part of that is due to lowered cost, said Aaron Henson, a senior planner. In 2011, the department reduced certain development fees on accessory dwelling units.

But people are also finding it to be a smart financial move.

"It's an opportunity for people to build something that can be an income generator," Henson said. "And these smaller units are sometimes attractive for a single renter."

Most of the accessory-unit applications with the city have been for buildings of 700 square feet or less.

Ashley Chally and her husband, Sam, are getting ready to build a 2,700-square-foot home on Awbrey Point Circle, on a quarter-acre they bought in July 2011. They're hoping it'll be ready by September, when Chally expects to deliver their first child.

But they've applied to build a second home, measuring about 472 square feet, on the property. It could be for visiting grandparents, or for use as a rental. Ashley Chally hopes the location on the north side of Awbrey Butte could bring as much as $1,000 a month rent.

"So many people were hurt in the economic crash. And this is still Bend, so any opportunity to make some extra income seems like a smart idea," she said.

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Information from: The Bulletin, http://www.bendbulletin.com

Copyright 2013 The Associated Press