Thursday, March 21, 2013

Energy Use Over the Last Year In the ADU

In earlier posts, I shared how living in smaller spaces reduces per capita energy consumption, which was part of my motivation for living more compactly. Furthermore, after constructing an energy efficient ADU, Energy Trust of Oregon even gave me a $1,750 rebate for meeting Northwest ENERGY STAR standards and achieving a modeled Energy Performance Score of 35. 

Now that I've lived in the ADU for over a year, I wanted to share the actual energy bills, and compare them to the energy bills of the main house. Comparing the utility bills of the two dwellings will allow me to draw a few conclusions regarding the nuanced personal energy consumption virtues of living more compactly.

Both homes are heated by natural gas. The ADU is heated via a tankless water heater and in floor radiant hydronic heat. The main house, built in 1906 and recently weatherized, is heated through a conventional forced air heating system.

Below are the natural gas bills for the ADU and the main house, respectively. The ADU consumed 277.5 therms, and the main house consumed 930.4 therms. A "therm" is a unit of heat equal to 100,000 British thermal units.
The total therms used in the last year in the ADU
The total therms used in the last year in the main house
At only 277 therms, the ADU used only 29% as much energy as was used by the main house for heating!

That's very cool, but that's not the real story. 

The real story must include the total energy use divided by the number of occupants. The designed occupancy level is calculated by taking the number of bedrooms in the house, and adding one additional occupant. This designed occupancy level assumes that two adults are living in a 'master bedroom' together.

The ADU is a one bedroom dwelling designed for two people. And, in fact, that is exactly what happened in the ADU;  two people lived in the ADU for the full year. 

The main house is a four bedroom house, with a designed occupancy level of five people. However, in reality, the actual occupancy rates of the main house were lower than the designed occupancy level; the main house maintained an average of three occupants throughout the year. 

Interestingly, census data shows that the average national occupancy rate for homes larger than mine at 1,700 sq ft, is surprisingly low. The average occupancy rate for homes of 2,500 sq ft is actually only 2.59 occupants.

So, let's look at the therms used per capita for both the designed occupancy and the actual occupancy.

If the main house were occupied at the design occupancy rate, each ADU occupant would have used 75% as much energy as the average resident in the main house. Living in the Northwest ENERGY STAR certified ADU would have been 25% more energy efficient than living in the main house.

But, in reality, with only three occupants in the main house, the actual therms used per capita for heating and cooling in the ADU was still 138.75, but the actual therms used in the main house was 310.13. This means that by residing in the ADU, I used only 44% the amount of energy that the average occupant used in the main house. Living in the ADU has been, in reality, 56% more energy efficient than living in the main house.

These are significant data points. Here are the stories that these data points tell us:

#1) Building the new structure to Northwest ENERGY STAR standards resulted in building a very efficient building envelope and in choosing to use efficient heating systems.

#2) By living at the designed occupancy in the ADU, my partner and I each lived more energy efficiently. Building a smallish dwelling alone did not make the dwelling energy efficient. It was dwelling in a smaller footprint per capita that had the most substantial energy efficiency impact.

Said another way, if I lived alone in the ADU, and the main house was fully occupied at the design occupancy of five people, I would have actually used 50% more energy than the average resident in the main house.

#3) In smaller dwelling spaces like my 800 sq ft ADU, I was prone to live at the designed occupancy level of two. Conversely and representatively, the main house was prone not to be fully occupied (according to US Census data).

These last two points are a thinking person's fodder for a housing revolution.


I'm also including my electrical bills from the last year for reference. Since neither the ADU nor the main house used electricity as the primary heat source (where the bulk of a home's energy is used), these data points are less relevant.

That said, indeed, the ADU was more efficient than the main house in terms of electric power consumption due to the types of appliances and light fixtures that were installed. But, one will still draw a similar conclusions that I have drawn above regarding designed and actual occupancy

Under actual occupancy rates, living in the ADU used 30% less electricity per capita than living in the main house.        Under designed occupancy rates, living in the ADU would've used 18% more electricity per capita than in the main house.
In terms of electricity, the ADU was more efficient under actual occupancy rates. But, if the main house was occupied by five people, the electricity use per capita in the main house would have actually been lower than in the ADU.

Electricity used in the last year in the ADU

Electricity used in the last year in the main house

Note the July spike in electricity use in the main house and the lack of a spike in July for the ADU.

The main house is set in direct sun, has R12 wall insulation, and has an AC unit.

The ADU is kept cool through deciduous tree shading, R33 wall insulation, and a ceiling fan. :)

Thursday, February 21, 2013

One Data Point for the Property Tax Impact of an ADU

My property tax appeal was successful. My property taxes were officially lowered from $4,021.75 to $3,154.21 for 2013.

Adjusted tax statement from Multnomah County

This is still a big increase from my 2012 tax burden of $1,599.43, but it's a fair increase based on Multnomah's tax code. 

Property taxes before and after the ADU was added to the lot

For others who are considering the fiscal impacts of an ADU to their current property tax, the important numbers to note in terms of possible tax increases are that my ADU cost  ~$100K to build, it was valued at ~$90K by the county, and that this additional 'real market value improvement' increased my taxes by ~$1,500.

A property tax increase post-ADU, should be proportional to the contributory value of the improvements. Using my increased tax figures as a baseline, and assuming that I understand Multnomah tax code correctly, if an ADU adds between $50K-$150K of contributory 'real market value' to a property, the property taxes would go up proportionally from ~$850-$2,550/year.
To figure out how an ADU may impact your property tax if you're in Multnomah County, simply multiply the assumed increase in assessed property value by 0.017. That will tell you approximately how much your taxes will increase after you've added an ADU to the property. 

And take my formula with a grain a salt be cause I am just a guy with extra time on his hands and MS Excel.

Wednesday, January 9, 2013

Successful Appeal of the County's Initial Assessment of the Contributory Value of the ADU

In my last post, I described how the county attributed approximately $142K of contributory value from the new ADU. This translated to a HUGE annual property tax hike; from $1,599 to $4,021.

What I didn't describe in that post was that upon receiving the County letter in the mail, I immediately gathered together evidence that my ADU was actually worth far less (it is worth ~$100K) and wrote an appeal to the County Board of Property Tax Appeals. I submitted the appeal package in full the following day at the County tax office.

When I spoke with the kind lady behind the County desk, she informed me that the assessor, who I'd allowed into the property, had noted in his records that I had added a 1,350 sq ft ADU. Given that the City of Portland's regulations only allow ADUs of up to 800 sq ft, I had evidence to prove that his spatial calculations were necessarily off target by ~68%. I also learned that the County assessor likely applied a simple numeric formula to this miscalculated sq footage to come up with the obscenely high contributory value for the ADU of $142K (eg. 1,350 sq ft x $105 sq ft= $142K).

A couple months after submitting my appeal paperwork, a 2nd assessor contacted me and visited the property. When he arrived, he explained that he had read through my appeal documentation, which had included a full copy of a 3rd party appraisal. Upon visiting and measuring the property, he concurred that the initial assessment of the size of the ADU seemed incorrect and he shared that he'd never seen an ADU add more than $100K to the value of a property.

It's worth noting that the initial County assessment apparently included the ADU attic space in his sq footage calculations, whereas the City did not count the attic as living space. The 2nd assessor agreed that the attic should not be counted in the sq footage calculations.

It's also worth noting that the County assessment includes the total building footprint (i.e. the exterior walls) in the sq footage calculation, whereas the City only counts interior space (i.e. drywall to drywall). The County includes exterior dimensions because assessors must be able to assess the building from the outside since homeowners aren't required to allow assessors entry into the home and many homeowners deny entry. These two variables help explain why the first sq ft assessment was so off target. However, I never would have known about this sq footage miscalculation had the kind lady behind the desk not mentioned it; this 1,350 sq ft figure wasn't in the initial letter they sent.

Today, I received an updated property tax assessment in the mail, which I am happy to report, accurately attributes ~$90K of contributory value from the ADU to the property, $53K less than their initial assessment!

The "From" column relates the 2013 figures from the "This Year" column in the first image at the top of this post.

The "To" column shows the new figures according the 2nd assessment, which will override the initial assessment.

Whereas the initial assessment indicates the market values of the structures (main home and ADU) at $320,600, the new assessment has the market values of the structures at $267,600. The new assessment values the ADU at ~$90K, which tracks perfectly with my cost of construction and my private appraisal.

I don't yet have a newly updated tax bill, so I don't know what my actual annual taxes will be. But, I estimate that the updated tax on the property will probably come be about $3,100/year. Once I receive the final property tax bill, I'll post it for all to see.

If my estimate is correct, this will be $1K less per year than the initial County tax assessment. It is still a $1,500/year increase to the property tax, a two-fold increase from what my taxes had been before I built the ADU. But, based on the County tax regulations, this new property tax burden seems fair and reasonable.
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