What is an ADU?

Everyone's first question is "What is an accessory dwelling unit?"

Accessory Dwelling Units are the name for a secondary residential dwelling unit on a single family lot. They are also sometimes referred to as a carriage house, granny flat, mother-in-law suite, auxiliary unit, English basement, or cottage. But, the local (and somewhat generic) name is for this type of housing unit is an accessory dwelling unit or "ADU" 

ADU's can take many shapes and sizes, but are necessarily smaller dwellings. They can be built into the same physical structure as the primary house or they can stand alone. ADUs are typically 200-800 square feet, whereas the average American home is 2,094 square feet (in 2009). ADUs are built in basements or attics if they're attached. If they're detached, they're commonly built using the garage, or built above garages, and sometimes they're new construction, like mine.

We are lucky---in Portland, ADU's are quite common. In fact, Portland is actively promoting them. ADU's are rare in most US cities, as most building codes implicitly or explicitly do not allow them.

Here's the City of Portland's definitive page on the matter and here's a detailed, 13 page overview of Portland's city regulations that define an "ADU". You can read more about  Portland's suspension of System Development Charges for ADUs through June, 2013.