That sounds nice, but don't rent to your friends. I've been there and it sucks. Everything works great until someone hits the hard times and the resource imbalance between parties gets amplified. You're either going to end up trashing friendships and dealing with the emotional baggage, making a really poor business decision or both.

Rent to people you're comfortable evicting/taking legal action against if things sour and then if you're so inclined, help your friends out by subsidizing outings/entertainment etc.

The permitting in PDX is very permissive if you do the work yourself. You don't need to build a second house - you can essentially stand up a large shed and do some pretty basic work to finish it into a studio apartment.

Alternatively, the tiny home bubble has popped, and you can buy a used, pre-built tiny home and just park them on your property.