More Bend homeowners add rentals to repertoires

BEND — 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 past 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.

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, 26, $700 to $750 a month in rent, while he and his fiancee, Justine Smith, live in the main house.

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

Part of that is because of lowered cost, said Aaron Henson, a senior planner. 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.

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