They used to be called granny flats. Now, they’re billed as a secret element to solving California’s housing crisis.
Striving for ways to boost housing, California legislators have sent two controversial bills to the governor that would make it easier for homeowners to turn garages into rental units or build cottage apartments in the backyard.
The effort has become a focal point among California’s infill-housing advocates in urban areas who subscribe to what they call YIMBYism, an acronym for Yes In My Backyard.
One bill, AB 68 by San Francisco Assemblyman Phil Ting, would limit cities’ ability to say no when a homeowner files for permits to build second units that are less than 850 square feet in size and 16 feet in height.
The bill also allows homeowners to add a second in-law unit on the property, turning a single family home lot into a triplex, if there is space to build the units at least 4 feet away from property lines.
A separate bill by Sen. Bob Wieckowski, D-Fremont, SB 13, would eliminate or reduce development impact fees cities charge homeowners who want to add an in-law unit. It also will eliminate some cities’ requirements that the property owners reside in the main house if they build a rental unit on their property.
Building less-expensive housing
Advocates say the laws make sense if California is going to build hundreds of thousands of new, less-expensive affordable housing. The granny, or in-law units, now are formally called ADUs, or accessory dwelling units.
“It’s an efficient way to provide someone a home in an existing community that already has all the amenities in place, amenities that the homeowner already paid for in developer impact fees tied to the main home,” Wieckowski and UCLA urban planning professor Vinit Mukhija wrote last week.
It also is a way for homeowners with big California mortgages to make some money, they argue. “By converting a garage to an ADU or building a small cottage in the backyard, homeowners can generate rental income that provides much-needed financial security, especially for seniors who may be house rich but cash poor.”
ADUs “enable homeowners to be part of the solution,” Ting said. His bill also prohibits cities from requiring a homeowner provide new off-street parking to compensate for converting a garage.
Gov. Gavin Newsom has not signaled whether he will sign the bills. Legislative proponents say they are hopeful given that Newsom has said the state needs to find ways to build 500,000 housing units per year, which is higher than the state has been able to build.
Many cities oppose what they consider a usurpation of the local zoning authority and unfair limitations on the fees they say they need to pay for services for the new populations of ADU residents. The California League of Cities says it plans to send letters to the governor asking him to veto the bills, expressing those concerns.
Some California local officials have expressed concerns that large or tall ADUs can invade neighbors’ sense of backyard privacy.
ADUs are popular, however, in some dense cities, such as Portland, where officials encourage them and where advocates organize annual ADU tours, similar to garden tours, to show residents ways they can turn an out-building or garage into a rental unit or apartment.
The ADU movement already is underway in California, its advocates say, both legally and illegally. In San Francisco, pushed by the highest real estate prices in the nation, some homeowners have built unpermitted ADUs in their garages, pushed by the desire to make extra money but wanting to avoid high building permit fees.
In Los Angeles, more than 9,000 homeowners have taken advantage of an earlier round of liberalized laws in 2017 to apply for permits, according to an Assembly report, and more than 1,000 have built ADUs, Ting said.
Slow growth in Sacramento
The ADU movement remains small in Sacramento. City data show only 18 permits issued for ADUs in 2017 and 30 issued in 2018. But that may soon change. The city has eliminated some restrictions and plans to offer homeowners the chance to pick among several preapproved floor plans for ADUs, saving them time and money.
Many homeowners who might like to build an ADU may not be able to afford the price. A 2017 study of ADU construction costs in the Pacific Northwest found them to be about $156,000 per unit. A recent estimate for a 750-square foot ADU in central Sacramento topped $200,000.
The costs can be lower. Dov Kadin and Tawny Macedo just had a pre-designed ADU built in their Oak Park backyard for $140,000, using a home renovation loan. The unit is the size of a small house at 825 square feet. The couple are renting it out to another young couple for $1,500 a month.
It wasn’t as easy as Kadin thinks it will become in the next few years. The city required them to build a retention basin to soak up storm water from the roof, adding cost. But Kadin said he is pleased the city didn’t require him to build extra parking on his lot.
“As it gains popularity and city processes get more efficient, it could get easier over time,” Kadin said. “We are in this period of new policy. Everyone is getting used to ADUs.”
Their renters are delighted. Newly married and tired of living in apartment complexes, Kristina and Steven Dake are relieved to find a place that feels like a home at a price they can afford.
“I was at my wits’ end trying to find a place,” Kristina said. “I posted on social media. Anybody know of anything? We need help.”
The Ting bill also requires cities to mandate ADU rentals be for more than 30 days each, a caveat that essentially means they cannot be used for weekend or short-term rentals like those offered via online booking companies such as Airbnb.
Ting says ADUs may be the fastest way the state can get a slice of affordable housing built. If a city is on board, a property owner can get formal approvals and have the project built and rented in little more than one year.
He believes ADUs will be less controversial in existing neighborhoods than say a new apartment complex, because they will typically be built by residents who know their neighbors, and who often will be renting to a family member or someone they know.
“There is always going to be opposition depending on the neighborhood,” Ting said. “This is different. This is the owner who knows the neighbors.”
In San Francisco, he said, ADUs are often built in ground-floor garages in multi-story buildings. While the cost may top $100,000 or $200,000, that is far less expense than a building a new apartment unit in San Francisco in particular, where that cost could top $500,000, Ting said.