Hacienda CDC to Launch Small Homes Northwest Demonstration Project

Racial and economic disparities in access to safe, affordable housing existed long before COVID-19, and the pandemic has only widened these divides. In the new year, Hacienda will pilot a new solution, Small Homes Northwest (SHNW). 

SHNW is a program to build small backyard homes—also called accessory dwelling units (ADU) or casitas—as affordable rentals. We aim to build up to three energy-efficient casitas in Portland neighborhoods at risk of gentrification, in partnership with moderate-income homeowners and local community organizations, including Community Vision. The casitas will be regulated affordable rentals for a period of 10 years, built at a fraction of the public cost of a typical affordable apartment. 

Why we are excited about this approach 

SHNW benefits both homeowners and renters. Right now, ADU’s are primarily built by people with wealth for long-term investment. Our goal is to work with moderate-income homeowners in quickly gentrifying neighborhoods for whom an affordable rental casita in their backyard can raise their property value and generate income while also increasing the stock of affordable rental units for low-income individuals and small families. The program is a natural complement to Hacienda’s ongoing work to build affordable housing and support stable homeownership. 

The SHNW pilot project is funded by Meyer Memorial Trust and resources secured by Verde. We are thrilled to share that the Oregon Legislature passed a bill, HB 3335, allocating a $1,000,000 grant to Hacienda to fund a demonstration project and create the opportunity for replication across the state. 

Our partners in this pilot include Bend/Redmond Habitat for Humanity and DevNW. Both joined us in advocating for this pilot project as a statewide tool to create new affordable rental housing and to provide stability and asset-building for modest-income homeowners. Many community partners, including 1000 Friends of Oregon and the Oregon Housing Alliance, provided letters and testimony in support of HB 3335. 

We received strong support in the last Legislative session for this pilot (House Bill 4015), but it was one of the many bills that did not get final approval due to the walkout. The bill was re-introduced in the 2021 session by Representative Meek, and endorsed by the Oregon Housing Alliance. 

What's next? 

We are proud to announce that HB 3335 was signed into law by the Governor on July 19 and will be administered by Oregon Housing and Community Services. 

We want to express our deep thanks to the Legislature, and specifically Representative Meek for sponsoring HB 3335 and co-sponsors Representatives Bynum, Leif, Pham, Ruiz, and Salinas, and Senators Frederick and Jama. 

Funding from the Legislature will allow us to demonstrate the model by building up to 8 affordable ADU’s, both in the Portland Metro area and across the state. This is a key innovation to help meet the growing need for affordable housing. 

Our long-term hope is that this ADU model will give community organizations throughout Oregon a new tool to achieve the goals of adding modest residential density in single-family neighborhoods to help address our affordable housing crisis. 

Courtney Freeman, a hospital health educator and mom who lives in Northeast Portland knows firsthand the life-changing effects of homeownership. "I really worked hard on my way to being a homeowner… I know what it’s like to struggle and here I am, a homeowner." When asked about our pilot ADU program she says, “I looked at this as: here’s two people who can meet each other halfway and help each other.”  

Stay tuned for more updates as we roll out this program.