Retrofitting Cities With Accessory Dwelling Units Is A Win Win

[M II A II R II K]

One answer to the lack of affordable apartments might begin at home


September 17, 2018

By Haisten Willis

Read More: https://www.sfgate.com/business/arti...s-13235294.php

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ADUs, commonly called "granny flats" or "mother-in-law suites," date to antiquity. But there has been renewed interest as housing costs soar across the United States, especially in high-demand, relatively low-density cities along the West Coast.

- In Southern California, for example, the median sales price for homes is now above $510,000, according to real estate data firm CoreLogic. The figure was below $300,000 as recently as 2012. Higher housing costs and accompanying property taxes have pushed homeownership out of reach for many millennials and have made retirement math more complex for low- and middle-income seniors. — Because most U.S. cities are developed around single-family homes designed for automobile owners, it's difficult to increase density and provide housing relief through new construction. One potential solution to the problem is the relatively simple concept of ADUs, either a new structure built adjacent to an existing home or added to it in what's known as an attached or "junior" ADU.

- Sizes and amenities vary, but the homes are typically on the small side - between 700 and 1,000 square feet, with 1.5 baths, on average. These homes tend to blend in with their surroundings rather than drastically alter a neighborhood, quietly adding density and new options for renters. — The West Coast has become a leader in both high housing costs and in ADU construction, with California and Oregon mandating that most cities must allow ADUs. The high demand and low density of U.S. cities feeling the housing crunch underwrites the financial feasibility of ADUs. According to UC-Berkeley research, average accessory dwelling construction costs are $156,000, whereas even a modest three-bedroom, two-bathroom home can sell for more than $1 million in the San Francisco Bay Area.

- The same research found that 58 percent of ADUs are rented at or below market rates, in part because they are often leased to friends or family members, and that average construction time is 18 months. There appears to be plenty of room for accessory dwellings in America's backyards. In Portland, for example, 43 percent of all developable land is dedicated to single-family homes, according to the city's Bureau of Planning and Sustainability. — Just 15 percent is dedicated to multifamily dwellings. Overall, 60 percent of all housing consists of detached single-family homes. The concept is gaining traction elsewhere, too, in expensive cities such as Boston and Washington and even in smaller communities such as Albany, New York. — In Los Angeles, an organization called LA Más is establishing an ADU Section 8 program to provide homeowners with incentives to build ADUs specifically for Section 8 voucher holders.

- Financial issues on the part of homeowners can also impede ADU instruction, although if successfully rented, the units can pay for themselves in as little as four or five years. Another issue is reluctance on the part of some homeowners to have strangers living on their property, even within a detached structure. This concern helps explain why they are so often rented to friends, children and parents. — A Portland State University study released this year found that 42 percent of ADU owners built them for long-term rental housing and that 35 percent planned to rent to family members or friends. Portland has developed substantial momentum in its push to encourage ADU construction, Tracy said. Homeowners see their neighbors building them and become interested, which helps bring more people into the fold.

- The future for ADUs on the East Coast and in the Sun Belt is less clear. In older cities such as Boston and New York, much of the housing stock was built before World War II and is more dense than postwar suburban neighborhoods. Sun Belt cities such as Atlanta, Dallas and Phoenix were developed more recently, but housing prices, for the most part, have not reached the peaks seen on the West Coast. — "If you grew up in New York City or Boston, you have a different acceptance for density, rather than in the West, where open space has always been prized," Chapple said. "It has been really hard to retrofit these cities that were built at a later time." In the District of Columbia, it's common to find ADUs in the form of finished basements under older townhouses. Suburbs such as Montgomery County, Maryland, offer a better opportunity for detached accessory dwellings.

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