Like so many seniors who want to maintain their independence, Shirley Dixon lived on her own in Florida as long as she could. It wasn’t until her late 80s that she finally decided it was time to relocate to Oregon to be closer to her children and their families. “In my 70s, my friends began moving away to be with their children, or losing their wits, so I knew I had to make a decision,” said Dixon.
Her daughter, Lesa Dixon-Gray, 59, knew how much her mother valued her independence and began looking into several retirement communities in the Portland area where Dixon-Gray lives with her husband, Ken. Because both of them work full-time, they knew they’d need more help supporting her mother’s needs during the day, so an assisted-living situation seemed like the best fit.
But the senior communities they visited cost too much. With a typical asking price of around $350,000 down, plus $4,000 to $5,000 in fees each month, the high cost forced them to search for more affordable options. That’s when Dixon-Gray discovered that Portland was encouraging property owners to build housing additions, called accessory dwelling units (ADUs), by waiving about $10,000 worth of fees associated with construction.
“It’s a way to provide more affordable housing options for people looking to relocate and a way to increase the density of housing, which is an objective for our city,” said Ross Caron, a public information officer for Portland’s Bureau of Development Services.
But building an ADU meant that Dixon-Grey and her husband would have to sell their home and move into one with enough land for the addition. Despite the effort, they were willing to take on the investment and take advantage of the ADU benefit.
From the sale of their house, they were able to afford a similar-sized home on a larger piece of land for $350,000, and then spent about $110,000 for the ADU. From start to finish, it took five months to build the 500-square-feet, one-story wheelchair accessible home, customized to their mom’s liking—and she couldn’t be happier with the results.
“It turned out beautifully. I live independently here in a home on the piece of land that my daughter and son-in-law own. I’m saving money and enjoying my life,” said Dixon.
Finding solutions
ADUs can provide a wide variety of practical and financial solutions for multigenerational families. Depending on where you live, the level of difficulty in building one can vary greatly as the process is different from state to state, even county to county.
“Each community has to balance out the issues they face. If they see a need to have more solutions for families with caregivers or aging relatives, being flexible with housing regulations is one response,” explained Rodney Harrell, AARP’s director of livable communities. He noted that New Hampshire and Virginia recently passed laws that make it easier to build, giving more flexibility to homeowners.
For homeowners interested in building an ADU, Harrell says the first thing you need to do is check with a local planning and zoning department in your county. “There are state laws, but they are always impacted by the local building regulations, so speak to someone who knows the local zoning ordinance,” advises Harrell. Some permits to build ADUs can cost as little as $100, while others can be upwards of $10,000.
It’s been about five years since Dixon moved into her daughter’s backyard. “Up to this point, we would have paid over $201,000 for her to be in assisted living over a five-year period. We paid $110,000 for the ADU. So thus far, we’ve saved $90,000,” said Dixon-Grey, doing the math.
As for providing Dixon with assistance during the day, they rely primarily on long-term care insurance, which she began paying for her in her 70s. Before Dixon started using the coverage, she paid about $3,000 a year for the supplemental insurance. The plan currently allots her about $2,200 to $2,500 worth of coverage a month, so the family hasn’t had to pay much out-of-pocket for the roughly $30,000 it would cost to provide private home health care.
“I have been very lucky. It’s a question of being comfortable here and not imposing myself on my daughter and my son-in-law, and I think both of us are doing very well in that arrangement. I would recommend it to anybody,” said Dixon.
WATCH MORE
How a spending intervention is helping one woman climb out of $50K of debt