Yes! In my backyard!

Eve Picker: [00:00:13] Hi there, thanks for joining me on Rethink Real Estate. I’m on a mission to make real estate work for everyone. Real estate can help to solve climate change, can house people affordably, can create beautiful streetscapes, unify neighborhoods and enliven cities. So I’m on a journey to find the most creative thinkers and doers out there. I’m not the only one who wants to rethink real estate. You can learn more about me at EvePicker.com or you can find me at SmallChange.co, a real estate crowdfunding platform with impact real estate investment opportunities open for investment right now. And if you want to support this podcast, please join me at Patreon.com/rethinkrealestate where there are special opportunities for my friends and followers.

Eve: [00:01:22] Our episode, Yes! In my Backyard, made it to the top of the charts.  More of you downloaded this episode than any other one to date. And since my guest, Patrick Quinton, is currently offering an opportunity to invest in his ADU’s on SmallChange, we thought you might be interested in listening to Patrick’s vision  again. Dweller is Patrick’s startup company. He manufactures turnkey accessory dwelling units (ADUs) with a goal of addressing the very pressing housing needs of his hometown, Portland, Oregon. Patrick started Dweller because he knew that Portland has “the most ADU-friendly code of just about anywhere.” A 32×14 foot ADU can be set into a typical 50-by-100-foot lot without hitting the setback limits and without requiring city design review. If you haven’t heard his story, we think you’ll want to listen in.

Eve: [00:02:25] If you’d like to join me in my quest to rethink real estate there are two simple things you can do. Share this podcast or go to patreon.com forward slash rethink real estate to learn about special opportunities for my friends and followers, and subscribe if you can.

Eve: [00:02:52] Hello Patrick! Thanks so much for joining me today.

Patrick Quinton: [00:02:55] Thanks, Eve. It’s great to be here.

Eve: [00:02:57] Great. So, a couple of years ago, you co-founded a company called Dweller to address the pressing housing shortage in Portland, Oregon. And you’ve had a pretty substantial financial and economic development career. So, I’m wondering what prompted you to move to the uncertainty of a startup life?

Patrick: [00:03:18] Yeah, I sometimes ask myself that as well. My most recent job, prior to this, was I ran the city of Portland’s development entity. At the time it was called the Portland Development Commission. It’s now called Prosper Portland. But, obviously in that role I had my hands in a lot of different, large-scale projects, and had benefit of lots of public funding, and so had an opportunity to have an impact in a way that, across a lot of different things, but when my time came to leave there and I was thinking about, not just kind of what I wanted to do next, but what type of role I wanted to have, I really felt like I wanted, you know, to use the cliche, roll my sleeves up and really be closer to the work. And in particular, I had been thinking a lot about private models of solving any of a number of public issues. And certainly affordable housing was at the top of the list. So, you know, I didn’t leave with the idea of starting an ADU year company. I left to try and explore and think about, you know, what to do next. And my business partner, Brian, came to me with this idea, and at first I didn’t think it was the right idea. I didn’t think it had the opportunity to have as much of an impact as I had hoped. But the more I thought about it, the more I realized it really was the right opportunity to both build affordable housing, you know, to really have a direct impact, but also to prove a model that we both felt people had been toying with this, but really not making any progress. And so, it’s always kind of a leap, and it’s always, you got to drink a little bit of the Kool-Aid, but we really did feel like we were on to something new and kind of at the beginning. And so, you know it’s been a fun adventure.

Eve: [00:05:13] Dweller manufactures ADUs, right? And for those who don’t know who are listening, what’s an ADU?

Patrick: [00:05:21] Yeah, so ADU stands for Accessory Dwelling Unit, which is an unfortunate name for something that we’re trying to popularize. But it just means that it’s a secondary, permitted unit on a residential property. It’s typically referred to as a backyard cottage or a mother-in-law unit. But, in any form, it is a second living unit. And because it’s a separate permanent unit, it can be used as a rental. It can be used to house a family member. Obviously, it can be used for somebody to have, you know, their TV room, but its power is in, it creates another housing unit on land that nobody assumes can accommodate any more housing. And so you’re able to drop in additional housing supply without really having to acquire new land, or even disturb the kind of existing fabric of a neighborhood. So, it’s backyard housing. I mean,  that’s kind of the easiest way to talk about it.

Eve: [00:06:22] So, it’s a density play. It’s really kind of utilizing expensive land in a more efficient way. Right?

Patrick: [00:06:30] Exactly. There’s no way that anybody could develop housing on the land in these types of neighborhoods without this type of unit that didn’t have to acquire land and can be built on a small scale. It’s the ideal way to take advantage of this excess land.

Eve: [00:06:44] So, tell us about your model and how you arrived at it. Because I think there’s lots of different ways of building ADUs.

Patrick: [00:06:52] Once we dive into the ADU world and you learn more about it, you know, and we’re on the West Coast, so the West Coast has been doing this for a while, you look and you see lots of ADUs have been built. But, basically, what’s been going on is people who have money have been building a lot of kind of cool backyard houses. And so while they’ve been proving that you can do this, it really hasn’t been available to mainstream homeowners who aren’t sitting on a ton of money. So, we really wanted to create a model that would get a lot of ADUs built, but more importantly, really open the market up to more mainstream homeowners. So, we wanted to bring the cost down for ADUs and then help them finance it. And we brought the cost down by developing standardized ADUs that are built in a factory. So, high quality construction, but we’re just taking out a lot of the waste and inefficiency that happens with building a unit on site. And so, that’s really made our ADUs a lot more affordable than your average ADU. And then the second thing is, we’ve created a way for homeowners to finance an ADU without putting any money into it themselves. So, those are the two main things we wanted to address. And we feel like with those issues solved, we think, yeah, now your average homeowner and thousands of similar homeowners can now put ADU on their property when, you know a few years ago, that really was impossible.

Eve: [00:08:23] Can you share with us how much it costs to build one of these pre-manufacturing units?

Patrick: [00:08:28] So, our typical project is about 120,000 dollars, all in. So, that means that, you know, a homeowner can come to us …

Eve: [00:08:35] That’s very reasonable.

Patrick: [00:08:36] Yeah, when you consider the average price of an ADU here in Portland is around 200,000 dollars. And the average price in other West Coast markets in California, and Seattle, is around 300 or higher. So, yeah, 120 brings it into the range of affordable for many homeowners. It’s still a big financial decision, but it’s definitely a lot easier for homeowners to get over that hurdle.

Eve: [00:09:02] Yeh, I’ll say, that’s pretty reasonable. And then, so, how many units have you built and operate to date, as a start?

Patrick: [00:09:08] We built 15 units in total, and then, you know, I know we’re going to get into this, but we actually own nine of those. So, we operate nine of those as a small portfolio of affordable ADUs rentals and we rent those out to long-term rentals. So, local residents, and they’re sprinkled throughout the city of Portland. The other units we just sold. There’s homeowners who come to us and have the money and want to buy from us. And we’re happy to do that. And homeowners who buy from us who have money, you know, they like the efficiency, the no-hassle aspect of it as well. So, it’s not simply that, you know, homeowners can afford it. It’s that ADUs have traditionally been a big project for a homeowner. It’s, they become a mini-developer and most people just don’t have the time to do that. Because there’s a lot of pitfalls along the way. So, we also attract a number of buyers who just want to buy ADU like they buy a car, or some other big purchase. They don’t want to have to learn how the car is manufactured.

Eve: [00:10:10] Right. Where are these located, the ones that you built?

Patrick: [00:10:12] They’re located in residential neighborhoods throughout our city. You know, Portland is, like many cities is, has tons of great residential neighborhoods. And what people don’t realize is that in most cities, even in the city itself, you know, you walk down any residential block and there’s a nice big backyard in these properties.

Eve: [00:10:32] Yes, yeah.

Patrick: [00:10:33] And so when you look across the landscape in Portland, where most of the residential neighborhoods are, if you were to fly over them, you would see all this space that you really don’t see from the street side. And a lot of them are really modest neighborhoods with bungalow-style houses and homeowners who, you know, they want to have the extra income. That’s really the prime motivation.

Eve: [00:10:55] So, you are doing two things. You’re creating affordable homes and extra income for people who need it.

Patrick: [00:11:00] Yup, yup.

Eve: [00:11:02] And the third thing I’m realizing as you’re talking about this … ADUs are built in places where there’s already infrastructure. And so, they’re going to be close in, and provide housing for people perhaps without needing a car because the developed neighborhoods have transit, etc..

Patrick: [00:11:18] From an urban policy perspective, that’s one of the reasons why so many jurisdictions have been promoting ADUs, is because it’s an easy win on the housing side. You don’t have to fight over how you develop a big corner lot. You’re dropping it in. You don’t have to build new streets or sidewalks, like you’re saying, and you get to take advantage of existing parks. And even, you know, schools. Like people … this is an understated aspect of this. But when a household that typically rents gets the rent in a neighborhood that’s primarily single family, owner-occupied houses, they’re generally accessing better schools. And so, it opens up even that, for renters.

Eve: [00:11:58] Yeah, probably better shopping and proximity to grocery stores, etc..

Patrick: [00:12:02] Exactly.

Eve: [00:12:03] Yeah. So, what do they look like? Do you have a number of models?

Patrick: [00:12:07] We do now. You know, as like any company, we started off with one model. You know, we really were trying to work out the kinks, but also just kind of see where customers are. But we generally sell units that are between four and 500 square feet. It looks like a one bedroom apartment. There’s a lot of talk about tiny homes these days, which is another really great form of housing. But ours are bigger than that, and most ADUs are, and they look more like apartments than what people will see in a lot of these tiny home images. So, they have full bedroom, full bathroom, usually a shared kitchen, living space. ADUs can come in all sorts of architectural forms. But what’s interesting about it is a lot of them have, what they call a shed roof or mono slope roof, which is different than most houses which have the peaked roof, gable roof. So, ADUs tend to have a little bit of a different feel there …

Eve: [00:13:00] It’s a little bit more of a shed aesthetic, like the garden shed, yeh?

Patrick: [00:13:03] Exactly. When you look into the back yard, you don’t see a mini house. You see a structure that looks more like a larger shed.

Eve: [00:12:12] Yeh.

Patrick: [00:13:19] But inside it’s built out like, you know, any apartment that you would see in a big apartment building.

Eve: [00:13:19] Right. I’ve lived in a 450 square foot unit and loved it. It was the perfect size and there were two of us. So, if you don’t have too much stuff, it’s great. What makes them affordable? This is a loaded question, because I know you’re also striving for affordability, just through your mission. I suppose the question is not what makes them affordable is small and well-thought through manufacturing, but what’s your affordability mission beyond that is, I suppose, what I’m asking?

Patrick: [00:13:49] I do want to actually just talk about one thing that, about affordability, before we get into making them affordable rentals is, and there’s a lot written on this. You know, the average cost of a new housing unit is, you know, if you’re talking about an apartment building or something like that, here, it can be 300 to 400,000 dollars, a unit. In California, the Bay Area, right, they’re talking about 700 to 800,000. And …

Eve: [00:14:14] It’s crazy, yeh.

Patrick: [00:14:15] The mere act of building a new housing unit has become so expensive. And when governments and other organizations that care about affordable housing are rounding up dollars to build new affordable housing, they have to find a lot of money to build a number of housing units of any scale. So, to say I can build a housing unit for 120,000 dollars, regardless of what the purpose is, that’s a big deal. And there are other companies doing this. So, the ADU industry is positioned to add a lot of housing supply at a price per unit that almost no other aspect of the housing industry can achieve. And, you know, one of the main savings is we don’t have land cost. Right? So, it’s not magic. It’s not like, you know, somehow we’ve figured out the magical way of building that takes out of the cost. It’s that we’re leveraging existing land. So, basically, if it’s a homeowner, the homeowner is kind of contributing that land to this transaction. But it’s not money that we have to find. And then we generally, because we build small units, and if you are building the way we build in a standardized fashion, then you can take out all these inefficiencies, as I mentioned earlier. So, that’s like this whole powerful part of the ADU world is …

Eve: [00:15:31] Yeh.

Patrick: [00:15:32] … if we really can figure out how to get thousands of ADUs built, we’re going to be building those units at a lower cost per unit than pretty much any form of housing.

Eve: [00:15:44] I mean, when you look at a multi-unit building, you’re talking about fire sprinklers and stairs and elevators …

Patrick: [00:15:50] Exactly.

Eve: [00:15:51] … and, you know, accessibility, really expensive.

Patrick: [00:15:53] Yup.

Eve: [00:15:53] And all of that has to be subsidized to keep it affordable.

Patrick: [00:15:57] Yeah.

Eve: [00:15:57] So, tell me about the ground lease and, you know, who’s interested in it. And what sort of success you’re having finding people who want to do this.

Patrick: [00:16:06] And so, as I mentioned earlier, we really wanted to help address the financing challenge for homeowners, and just a bit on that. So, basically an ADU is typically a project. It’s taken on by a homeowner and the homeowner has to not only manage it, but pay for it.

Eve: [00:16:20] They have to hire an architect and probably an engineer.

Patrick: [00:16:23] Yeh. And so when homeowners go to pay for things like this, they typically are going and getting home equity financing. I mean, obviously, there’s people out there who might have that money just sitting at the bank. But that’s, that’s typically not most people. So, they go and get home equity loans, and I think the home equity loan has certainly become pretty widespread over the past 20 years. So, everybody gets that that’s out there. But when you really dig into the numbers, lots of people are sitting on small amounts of equity. Very few people are sitting on a lot of equity, certainly enough that’s going to allow them to pull, you know, 120,000 dollars out in our case, but for the average cost, you’re talking about a lot more.

Eve: [00:17:05] Right.

Patrick: [00:17:06] And even then, you’re asking people to take out what is basically the bulk of their life savings. It’s you know, the statistics all indicate that most people have their net worth tied up in their home. So, like, that’s the ADU financing challenge is, it’s all home equity based and most people don’t have it, and the ones who do have to make this massive decision and …

Eve: [00:17:27] Oh yeh. It actually turn them into mini developers. You’re asking homeowners to be real estate developers and work through all the issues around that. That’s a lot.

Patrick: [00:17:38] And so, that’s just a risk profile that you’re not going to find in your average homeowner. So, we wanted to figure out how do you finance this in a way that takes out all of those obstacles. And so we came up with, we didn’t invent it, but we’re one of the first ones to really try it, is to use what’s called the ground lease. Under a ground lease we lease a part of the homeowner’s property. So, we generally lease a defined part of their backyard. And then by doing that, we then have the right to develop on that part of the property, and then we develop the ADU ourselves using our own capital. So, we’re building the ADU on the homeowner’s property at no cost to them. And then we own the ADU then and we’re able to manage it and rent it out. And then we share a percentage of the rent that we collect each month, back to the homeowner. And that’s essentially our lease payment to them. So, once again, we’re tenant in their backyard because we’ve leased that part of their backyard, so we owe them monthly rent. And so we pay them that as a percentage of the rent. And then the homeowner has the right to buy us out of that lease at a prearranged price at some point during the lease. 

Patrick: [00:18:50] So, in essence, the homeowner is getting the ADU on their property at no cost to them, and then they can, when the time is right for them, choose to pay us back. Right? So, it operates like a loan, but it’s not a loan. It’s, you know, it’s us going in and building and owning the ADU. And we think this is a particularly well-suited type of financing vehicle for ADUs, because not only does it overcome these challenges that we’re seeing for homeowners who want an ADU but can’t finance it or can’t pull the trigger on taking all their equity out. But it also puts these ADUs immediately into the rental market, because we’re owning it and then we’re managing it like any other long-term rental. So, not only are we getting ADUs built, but we’re getting them immediately available to local renters, which is one of the big policy objectives for promoting ADUs, is to have more affordable rental units. And then when the homeowner buys it out, they can decide if they’re going to keep it as a rental. But for at least some period of time, five, 10 years, it operates as a rental unit in neighborhoods that really need it. So, it’s just this kind of unique way of looking at how to get over the financing hurdle that has all these ancillary benefits.

Eve: [00:20:09] So then, you’re launching a crowdfunding campaign to raise equity on my crowdfunding platform, Small Change. And why are you doing that?

Patrick: [00:20:21] The financing challenges don’t go away just because we’re building on aground lease. Somebody still has to fund this. And so, that financing challenge then gets pushed onto our shoulders. And so we’ve tried to figure out how to fund the development of new ADUs using a lot of traditional financing methods. And so, if you think about a real estate transaction, you know, you have some equity, you go out and you borrow money from a lender, and usually you can kind of piece together the right capital sources. But this structure is unique in that we don’t own the land and we don’t have rights to the land. So, you’re asking lenders and investors to really bet on this structure and the stream of income from it. And even though I would argue until I’m blue in the face, how secure this is and what a great investment this is because of the regular income coming in, it doesn’t look and feel like what lenders and investors are used to seeing. And so, it doesn’t fit in one of these boxes. And so, we’ve tried to look for traditional lenders, non-traditional lenders, all sorts of folks who fund even affordable housing projects. And we just haven’t found lenders who are willing to do this with an eye towards scale. And so, at the end of the day, we felt like there’s a lot of interest in this type of housing. There’s a lot of people that we talk to who love the idea of ADUs, who really want to see more ADUs built. These are average folks who want to help with the affordable housing crisis. And so, we actually have always thought in the back of our minds, you know, this would be a great crowdfunding opportunity, but we really thought, you know, we should be funding this in a traditional way. And we had to beat our heads against the wall for a long enough time before we decided, you know what, let’s actually look into crowdfunding because we feel like there’s a really strong interest out there for what we’re doing.

Eve: [00:22:16] Yeah. So, the challenges never end. Right? So, you’ve got a product that sounds like it’s scalable, that may really help the affordable housing crisis. And yet you’ve not been able to find a lender to, at least lend, yo know, 60 percent of the cost of building these, even if you have to go find equity, which I personally find really shocking … that we don’t have lenders in this country that can think a little bit out of the box. I mean, there are, as you said, non-traditional lenders, lenders that are focused on affordable housing, nonprofit lenders with a mission to help affordable housing. What has to change for this to work?

Patrick: [00:22:57] Yeah, this is multi-layered. So, the first thing is that I think that everybody can point fingers at each other. So, I think your actual lenders would point fingers at regulators and their auditors, and say, if I put this loan on my books I am going to get killed when audit comes around. Or they’re going to say, point to actual, you know, this is how we have to underwrite them. So, you have that. I do think you have, regulators and auditors might come back and say, we don’t say they can’t do this. They just have to kind of make the case and show us how it’s collateralized. So, I think some of it is this, like, you know, do I want to take this fight on as a lender when I can go look for another deal? So, I think there’s a lot of this, like, who’s self-interested enough to make it happen. And so, that gets to the second layer, which is getting scale on this proves it out, and then it will give, I think it’ll begin to open up the eyes of lenders. So, I do think we need to prove out that there’s a market for not just a lot of ADUs getting built, but also for folks with money that folks who deal in much bigger numbers with more zeros than we do right now, say, hey, I can put 10, 20, 50 million dollars to work right away, into this market. Now, I’m interested. So, I think we’re in the chicken/egg classic stage. We’ve got to prove it out, get some scale, and show people not just that it’s safe, because I think that’s actually the easier argument to make. It’s really can this thing be scale, can achieve scale, and can it really end up putting a lot of money to work? And so, whether it’s a regulated lender or a group of lenders that come in and do this, or whether it’s some more of a kind of investment banking type of approach, I think that scale is going to unlock, you know, one or both of those eventually to get more money into this market.

Eve: [00:24:49] Or maybe crowdfunding is, if enough investors …

Patrick: [00:24:52] Crowdfunding, right. You’re more the expert. I’m new to this. My natural inclination to think its smaller scale. But you’re right, that, you know, the beauty of crowdfunding is maybe it is.

Eve: [00:25:01] There are other platforms that have gone fairly large scale …

Patrick: [00:25:03] Right. Yeah, exactly.

Eve: [00:25:04] … but they have a very traditional real estate projects. Again, they’re kind of following the model. So, I think Small Change is a bit unusual in that it will help developers like you with unusual projects that are awkward to finance is the only other way to say it, like awkward to finance, because we think that in the long run it’s the right thing to do. So, I’m really excited you’re doing that on our platform.

Patrick: [00:25:29] I have one of our early investors, friends of family, this is a long time friend of mine. She does a lot of investing and she was one of the people who was really nudging us to explore crowdfunding. And she thinks just like you do, she thinks, like this is the way to scale, like she thinks this is just going to grow, and she has money to invest, so lots of options as an investor and she is sold on crowdfunding. So, she’s in a lot of different crowdfunding deals. She believes this is the way to go. So, you, I think you’re right.

Eve: [00:25:51] Yeah. I mean, its, instead of investing your money in a bank or mutual fund, you invest it directly into what you care about. And that’s a pretty beautiful thing.

Patrick: [00:25:52] Yup.

Eve: [00:26:12] Hopefully, there are enough affordable housing advocates out there who want to invest in affordable housing that will help you, and maybe we can find them. What does scale look like for you?

Patrick: [00:26:22] I think scale, obviously, it involves not just numbers, but I think multiple markets. We operate on the West Coast, so we see the housing crisis really clearly, you know, and it’s all relative. So, sitting in Portland, Oregon, we have a housing crisis. But then what we hear about in California, or up in Seattle, we know it’s even more challenging. And then we know that communities across the country are all experiencing this. So, I do think that we want to see us being able to offer this ground lease product in other markets. And, you know, the beauty of what we’re doing, and I think what’s happening in the ADU industry, is that we don’t have to be the builder. We can work with other builders and help them serve more customers in their markets by bringing this financing product to them. And we’re seeing a lot of growth in new ADU builders who are building more affordable units in other markets. So, the issue is not going to be capacity. It’s going to be how do we bring more financing options to homeowners? So, we think that’s where the scale comes from, is being able to partner with builders in other markets.

Eve: [00:27:31] And I agree. So, I have to ask, are there any other current trends or innovations that you think might help this crisis or might help construction costs come down, that you’ve been tracking?

Patrick: [00:27:46] I’d like to be more optimistic. I do believe in cycles, so I think we’re going to get out of this current moment. Where in the construction industry where costs are rising and we do have backlogs. The timber price goes up, there’s no way to, you know, the housing costs go up. So, we’re definitely in a challenging cycle there. I think that the more efficient that we build, the less waste that you have in the construction process, I think the less susceptible you are to those price changes. We’re just going to get more and more efficient and there may be alternative timber products that are able to also drive the cost down there. I think the other issue, which kind of gets in a little bit into the weeds, but building a prefab or factory built AU, however you want to call it, you know, there’s challenges in getting that unit into the backyard of an existing house. So, you can imagine a regular residential street in an urban neighborhood, or even suburban neighborhood. It’s not like you can just back the thing in the backyard. It’s usually not enough space. So, we’re using cranes and all sorts of things. We have power lines. We have …

Eve: [00:28:55] Wow.

Patrick: [00:28:56] … lots of obstacles. So, there’s a lot of properties that have space, the homeowners ready to go, the whole thing, and we can’t get there. So, we’re seeing a lot of innovation on how can you basically take the house and be able to, like, construct it on site. So, house-in-a-box. So, there’s prefab walls and things. But how can you make that process as efficient as building it in a factory, but eliminate a lot of the installation challenges that we have? If you can, if we could figure out how to get those types of units into pretty much any property, regardless of how much space you have to install, or what obstacles in front, I think that itself is going to open up …

Eve: [00:29:35] Right, right.

Patrick: [00:29:36] … the ADU market. I think that innovation will happen. I think it’ll happen more quickly than the financing innovation will happen. It’ll make the financing challenges even more acute because you have more homeowners who are ready to move forward and they’re looking at a, you know, 100,000 dollar … And the other thing I’ll just say which, every industry in the world can say this, but, you know, Amazon talks about selling these houses and you have an Airbnb, you have all these companies out there with massive scale that may or may not be able to carry through on this, but we should probably assume that some company of prominence is going to come forward with a solution as well. And I think it’s good for the market, assuming they do it responsibly. Amazon says I can sell you a 20,000 dollar house, that’s not, it’s not it’s an irresponsible thing. But it could really help with innovation, it could help with efficiency, those kind of things. So, I do think we’re going to be seeing that in the next few years. We’re going to be seeing some large companies that you wouldn’t expect to be in the middle of this, are doing it.

Eve: [00:30:42] I think it’s a great idea, and I wish you all the best of luck. I can’t wait to see how you grow and I hope you make your way over to the East Coast sometime, as well.

Patrick: [00:30:54] Thank you, Eve. We do, too. We love the West Coast, and there’s certainly a lot of work to be done out here. I get a lot of phone calls from folks in your neck of the woods. Atlanta, D.C.. We really do hear from people all over the country who want to see our model there.

Eve: [00:31:07] So, financing, we’ve got to figure it out. Thank you very much.

Patrick: [00:31:11] Thank you, Eve.

Eve: [00:31:35] That was Patrick Quinton. Patrick launched Dweller to help address what he thinks is the most pressing issue in Portland, Oregon, right now: a critical lack of affordable housing. He applied focus to the problem and decided that in order to scale, he needed to deal with some key friction points. The first is the complexity of building an ADU, which most homeowners can’t and won’t tackle. And the second is finding financing to build one, which most homeowners don’t have. By entering into a ground lease with the homeowner, and building and financing the ADU for them, Dweller has made the process as easy as can be. But now Patrick must struggle with an industry in its infancy and lenders who are not quite ready to go down the path of financing ADUs built on a ground lease. These are the growing pains of a company that is first in the marketplace.

Eve: [00:32:38] You can find out more about this episode on the show notes page at EvePicker.com, or you can find other episodes you might have missed, or you can show your support at Patreon.com/rethinkrealestate, where you can learn about special opportunities for my friends and followers. A special thanks to David Allardice for his excellent editing of this podcast and original music. And thanks to you for spending your time with me today. We’ll talk again soon. But for now, this is Eve Picker signing off to go make some change.