Because ADUs are expensive to build, there’s not much hope that they will solve the housing crisis.
Key Findings
There are an estimated 1.5 million Accessory Dwelling Units (ADUs) in the United States, making up roughly 2% of all homes in the country
ADUs are growing at a rate of 9%, or 100,000 per year
An average cost of an ADU is $180,000, or $260 per square foot
In America’s biggest cities, a home with an ADU is priced 35% higher on average than a home without one
The top states for ADUs are California (30%), Florida (12%), Texas (10%) and Georgia (5%)
The cities with the most ADUs are Los Angeles (12%), Portland (4%) and Houston (3%)
ADU sale listings are growing fastest in Portland (+23%), Dallas (+19%), and Seattle (+18%)
Whether you call them granny flats, in-law suites, or garage apartments – accessory dwelling units (“ADUs”) are on the rise. There are an estimated 1.4 million of them in the United States, with around 110,000 constructed in the last year alone.
In 2020, ADUs were often heralded as one answer to the growing housing affordability crisis. Their proponents argue that ADUs offer an opportunity for homeowners to make extra income, for young people to rent affordably, and for communities to grow slowly and sustainably.
But then the pandemic came and changed everything, and hardly for the better. So where did that leave ADUs in 2021?
Thanks to just some guy for sending this in – a company that is mass-producing ADUs that start as low as $49,500. Elon Musk has been living in one for a few months so you may have heard of these by now:
Governor Newsom signed SB 9 yesterday, but it won’t change much because building an ADU is cost prohibitive. How many people need one bad enough that they would spend $50,000 to $100,000 and go through the hassle? Plus the number of available parcels will limit how many could get built:
On Sept. 16, two days after winning the recall election, Gov. Gavin Newsom signed the bill into law, despite pleas from cities to veto it.
But some analysts say the linchpin of the Senate’s housing package would probably have a negligible impact on the California housing crisis, at least in the short-term. As for the nightmare scenario described by opponents? There simply isn’t enough evidence to back that up, either.
That’s because a change to zoning means very little in reality, starting with the number of units that would actually get built, these analysts say.
Development would be realistic in only about 410,000 parcels in California at most, or 5.4% of land now occupied by single-family houses, according to a new study by the Terner Center for Housing Innovation at UC Berkeley based on the version of the bill without the new amendments.
That could add a total of 700,000 new units across California, if every single homeowner for whom the change made sense chose to develop. “Overall, that’s a sliver of the 7.5 million single-family homes throughout the state,” said David Garcia, policy director for the Terner Center.
One of the new amendments — which requires owners to live in the home for at least three years after they split their lots and build as many as four units — cuts the potential total of new units by 40,000, or 6%.
The analysis was conducted using current land values and development costs, so the number of feasible units could change. But Garcia said that was unlikely in the near-term. The study found that the typical property owner could not afford to build a second unit, much less a third or fourth. Other barriers: The new split lot couldn’t be less than 1,200 square feet, and historic districts, fire hazard zones and some rural areas would be barred from development.
“You would not see the wholesale bulldozing of single-family homes, as we’ve seen characterized in many of the public comments in committee hearings,” Garcia said. “There’s just no financial basis for that fear.”
It is already legal to add an ADU and a junior ADU to a property zoned single-family. Another bill has passed the California Senate that allows up to four units total – and to be able to create two parcels, which means they could be sold separately – if the owner agrees to occupy the property for at least three years. Here’s a thorough article on the subject with examples:
Senate Bill 9 would technically allow as many as two duplexes, two houses with attached units, or a combination — capped at four units — on single-family lots across California, without local approval.
The bill would allow more building where it’s now illegal, with the intent of reducing California’s fast-rising home prices and increasing access to homeownership through a greater variety of options, according to state Senate leader Toni Atkins, a Democrat from San Diego who introduced the bill and similar versions in the past.
The bill returns to the Senate for expected concurrence on the amendments before heading to Gov. Gavin Newsom’s desk.
A group calling itself Californians for Community Planning Initiative immediately filed a proposed constitutional amendment for the November 2022 ballot to reassert local control over zoning and land-use decisions in opposition to the bill.
But some analysts say the linchpin of the Senate’s housing package would probably have a negligible impact on the California housing crisis, at least in the short-term. As for the nightmare scenario described by opponents? There simply isn’t enough evidence to back that up, either.
That’s because a change to zoning means very little in reality, starting with the number of units that would actually get built, these analysts say.
Pacific Legal Foundation obtained public records from San Diego and Riverside Counties (two of the most populous counties in the state) to determine whether local governments are abiding by the new 60-day permit-approval period, which took effect in January 2020.
Unfortunately for California residents, local governments are failing miserably to abide by the new state law.
San Diego County took a median of 187 days to issue an ADU or Junior ADU building permit after January 2020. Permits issued prior to the new law took a median of 112 days to be issued. Only 52% of permits issued prior to the new law fell within the previously required 120-day mark.
Currently, only 5% of permits issued by the county met the state’s 60-day deadline. Many times, the permitting process is held up by excessive fees or approvals needed from other departments within the county. As of July 21, 2021, there are 587 pending applications, of which 90 were submitted prior to 2020. If these permits were issued today, the median wait time would be 255 days after the application was submitted.
The government, and society in general, needs to recognize how dire the housing crisis is for the citizens. We’re going to have continued upward pressure on home prices and rents, and building ADUs is one of the best ways to alleviate the problem. It doesn’t matter if the resistance by local governments is conscious or sub-conscious, the ADU-approval process needs to improve radically to implement the will of the people, and slow down prices.
Excerpts from an article from the WSJ discussing the higher-end ADUs being built mostly due to covid, but also an inevitable solution vs. the astronomical cost of senior care:
There should be some scrambling to purchase properties in the two highlighted areas below, but the cost for Mom & Pop to add an ADU is still a hurdle ($50,000 to $100,000 min).
San Diego further loosened rules for granny flat construction Tuesday, eliminating all parking requirements and allowing property owners to construct extra granny flats if they agree to rent restrictions on at least one of them.
Tuesday’s loosening of granny flat rules builds on recent state and city efforts to encourage construction of the homes, which city officials call the cheapest and fastest way to help solve the local housing affordability crisis.
The City Council unanimously approved the regulations as part of a package of reforms aimed at boosting housing construction.
Other updates encourage construction of more “micro” housing units, allow buildings to be three stories taller if all their units are rent-subsidized, and let housing intended for students to have more units than previously allowed.
“This isn’t the sexy, make-the-news kind of story, but at the end of the day it’s helping create more housing,” Councilman Scott Sherman said. “Hopefully we can start bringing down the cost of housing for residents.”
Mayor Kevin Faulconer, who has spearheaded dozens of housing revamps in recent years, said the new moves will make a difference.
“The changes we’re making now are going to speed up the development process, cut burdensome regulations, and make it easier to build units that San Diegans can actually afford,” he said.
On granny flats, which the city and state call “accessory dwelling units,” parking spaces will no longer be required. San Diego has been requiring one parking space per new granny flat unless the unit is less than 500 square feet, in a historical area, within a residential parking district, or the granny flat is near a transit line or ride-sharing station.
On the bonus granny flats, property owners are eligible if they agree to make one of the granny flats they build rent-restricted for low-income residents for at least 15 years.
For granny flats within a half-mile of an existing or planned transit line, the number of bonus units is unlimited. For granny flats not near transit lines, a maximum of one bonus unit is allowed.
The rule change for micro housing units builds on 2018 city legislation that allowed developers to double the number of units in a project if they made the units smaller than usual – 400 square feet maximum.
The change approved Tuesday will create additional incentives based on height of the building and distance from the property line. City officials said the change would allow more projects to take advantage of the city’s micro unit incentives.
The new density bonus for projects with 100 percent rent-subsidized units builds on recent state legislation, AB 1763. That law allows a developer to double the size of a project if half the units are rent-subsidized.
San Diego will go beyond that. If all the units are rent-subsidized, the city will allow an unlimited number of units, and allow the height of the building to increase by three stories above what is allowed under current zoning. But the city’s change only applies in areas within a half-mile of an existing or planned transit line. In addition, 80 percent of the units must be for low-income or very-low-income residents, meaning a maximum 20 percent of the units can be for moderate-income residents.
On student housing, a new state law, SB 1227, allows developers to build 35 percent more units if their housing project is geared for students. The city has added two local incentives on top of that.
San Diego also increased the number of zones in the city where emergency shelters for homeless people can be located, a change required by recent state legislation.
The city will now allow shelters in all “community commercial” zones, which are essentially low-intensity commercial areas. Shelters were previously allowed only in mostly industrial areas, such as the Midway District near the sports arena.
Leaders of local development praised San Diego for being on the cutting edge of housing reforms.
“The city of San Diego continues to be the leader in our region to jumpstart affordable housing through incentivizing affordable housing at all levels,” Jeanette Temple of the Atlantis Group told the council.
CARLSBAD — The city finalized its policy regarding accessory dwelling units to reflect changes in state law.
During its Sept. 1 meeting, the City Council approved amendments to the zoning and municipal codes, in addition to the Village and Barrio Master Plan and Local Coastal Program.
The changes to the city’s municipal code align with six new state laws aiming to spur construction of ADUs, or “granny flats,” and create more affordable housing options for residents.
Don Neu, Carlsbad city planner, said ADUs are secondary residential units on an existing property and the city’s recent approval is keeping in line with the new state laws.
The latest California laws (AB 68, AB 881, SB 13, AB 587, AB 670 and AB 671) allow for ADUs on any lot with single-family or multi-family dwellings to include junior ADUs — units within the walls of a single-family home with a maximum size of 500-square feet — along with ADUs, which are detached units up to 1,200-square feet.
Other changes include setbacks, heights, lot coverage allowing for 800-square-foot units and prohibiting ADUs being used as short-term rentals, Neu said. Also, homeowner’s associations must allow both types of ADUs and state-mandated Housing Elements must include incentives for ADUs, Neu said.
“The processing time to act on a permit request for an accessory unit has been reduced from 120 days to 60 days,” Neu said.
The council also approved the attached ADUs to be 50% of the main dwelling or a maximum of 1,200-square feet, whichever is less. For detached units, 1,200-square feet is the maximum, which is in line with state law, Neu said.
These new guidelines also regulate height limits, which are 16 feet for both detached and attached units, and the city will default to the height allowed by the current zoning. As for landscaping, city ADUs must apply the same requirements as applied to the development of the property, while the architecture must be consistent with the main dwelling.
As of Nov. 2019, Neu said there were 425 ADUs in the city with rent running between $1,416 for a studio and $1,618 per month for a one-bedroom unit. Of the 425, there are 184 that are deed-restricted for lower-income residents and the rest are counted as affordable to moderate-income households.
“These were accessory units that were constructed to satisfy the inclusionary ordinance,” he said.
According to the staff report, the new state law also includes a requirement for the California Department of Housing and Community Development to review the city’s accessory dwelling unit ordinance for compliance.
The city will be given 30 days to respond and indicate if it will either change the ordinance to comply with the state housing department’s findings or adopt it as-is. If no response is made within 30 days, the state may notify the attorney general the city is in violation of state law.
Peter also noted this detail which should help to appease the NIMBYs:
Title 21 Zoning Chapter 21.10.030 ADUs has a unique permit requirement:
2g. An owner signed and notarized a notice of restriction, to be recorded against the property, declaring that:
The property owner(s) shall reside in either the primary dwelling unit or the accessory dwelling unit, unless a lessee leases both the primary dwelling and the accessory dwelling unit; and
The obligations and restrictions imposed on the accessory dwelling unit per the chapter are BINDING ON ALL PRESENT AND FUTURE PROPERTY OWNERS.
