ADUs are popping up in California. Are they really ‘affordable’ to renters? | Opinion

The rarefied, Silicon Valley town of Woodside — population just over 5,000 — ranks among the wealthiest communities in California; according to Forbes, the average annual income is $430,036 and the median home value is over $2 million.

Yet Woodside, like every town, city and county in California, is required by the state to approve future housing for residents of every income level — whether they earn $30,000 or $300,000.

Each jurisdiction is assigned a target number of units in each income category, from very low income to above moderate income, and must submit a plan to state that lays out how they will achieve those goals.

Local governments aren’t expected to build affordable housing, but they must zone for it and offer incentives to developers willing to build it — or risk losing local control over land use.

Communities have gone to ridiculous lengths to get around the mandates.

Woodside once falsely claimed the entire town was a mountain lion habitat and for that reason, it could not allow duplexes on single-family lots. A threatening letter from state Attorney General Rob Bonta helped persuade the town to retract that.

Now communities like Woodside are accused of trying a different tactic: Classifying “granny units” — officially known as accessory dwelling units or ADUs — as affordable housing.

They do so based on the assumption that the units are “affordable by design,” yet they have no actual knowledge of what the ADUs will rent for when — or if — they are actually built.

Then they file reports with the state that rely on ADUs to fulfill their obligation to include low-cost housing in their zoning plans.

That caught the attention of the San Mateo County grand jury.

“This problem is most acute in Atherton, Hillsborough, Portola Valley, and Woodside, where some residents are up in arms over the state-mandated housing requirements, and the city governments, trying to appease them, are proposing counting on ADUs to meet as much as 80% of their affordable housing targets,” it wrote in a report released in June.

Since the housing plans focus on potential development — including housing that may not even be in the pipeline — these affordable units could be phantoms that will never exist.

Little state oversight

The state of California typically doesn’t challenge local jurisdictions on the affordability issue.

It allows local governments to classify secondary units as low-income based either on actual or anticipated affordability.

Let that sink in for a second. ADUs can be counted as affordable housing based — not on what they will actually rent for — but on what they might possibly rent for at some future date.

What’s more, the state doesn’t monitor the calculations.

“We rely on the jurisdictions to report their data and we do not verify,” according to Megan Kirkeby, deputy director of housing policy for the state Department of Housing and Community Development.

Grand jury urges change

Affordability isn’t the only issue raised in the grand jury report.

It also points out that an over-concentration of ADUs in predominantly white communities can lead to greater segregation and exclusion.

Here’s why: Since homeowners often rent ADUs to family members or friends, that increases the likelihood that the renters will be white as well.

The grand jury recommended that San Mateo County and its cities and towns stop counting ADUs as affordable housing until they develop a monitoring system that verifies how they’ll be used.

There’s been pushback.

Atherton, for instance, disputed the grand jury’s allegations; the town’s mayor told a reporter with The Almanac that the panel used “too broad a brush” and noted that other types of affordable housing developments are on the drawing board.

Atherton officials also said they are “tentatively” planning to support a regional ADU monitoring effort, The Almanac reported.

But isn’t it a little late for that? Monitoring should have been in place from the start, not put in place a few years later as an afterthought.

‘We should just get real’

This bait-and-switch is used in less affluent areas as well.

In some cases, developers are either including ADUs in their plans or are designing their projects to accommodate the addition of a second unit at a later date — and local agencies then count them as affordable or moderate without having any idea of what the rents will be.

That happened at the upscale Trilogy Monarch Dunes golf course community in San Luis Obispo County, where most homes sell for over $1 million. The developer proposed adding more residences than initially approved. Those included duplexes — 31 with attached ADUs.

Half of the ADUs would count toward SLO County’s low-income housing obligation, and the other half would count as moderate income.

Again, there would be no verification of rental prices or any requirements for homeowners to keep rents within a certain range.

Still, the Board of Supervisors voted unanimously to approve the revised plan, though one supervisor at least acknowledged the uncertainty of the situation.

“Perhaps the 30-or-so ADUs, if they’re rented by a landlord with a bit of a social conscience, might be reasonably affordable to some individuals. But I think we should just get real about how this housing addition will affect the situation,” Supervisor Bruce Gibson said.

Thirty-one ADUs may not seem like a huge deal — but try telling that to 31 people who have been struggling for months, even years in some cases, to find affordable rentals on the Central Coast.

How big is the problem?

Unfortunately, there have been a lot of assumptions made about the affordability of ADU rentals, but little research to back that up — even in the middle of an ADU boomlet. In 2021, one in seven new homes built in California was an ADU, and that number is expected to increase.

UC Berkeley’s Community Center for Innovation released a report in 2021 described as “the first-ever statewide ADU-owner survey,” including responses from 752 homeowners.

Among its findings:

• The median rent was $2,000 per month
• 61% were one-bedroom; only 21% had two or more bedrooms
• 86% had one or two tenants
• Only 11% provided housing for school-aged children
• 16% provided no-cost housing to a family member
• 8% of the units were used as short-term vacation rentals

While it’s dangerous to draw too many conclusions from such limited data, it’s clear that ADUs alone aren’t enough.

They aren’t suitable for large families.

A significant number don’t end up on the open rental market but are instead used as family housing or even home offices.

And some do wind up as short-term rentals, cutting into the permanent rental housing communities need.

Another thing: ADUs aren’t a replacement for the type of affordable housing that nonprofit builders can provide. We’re talking multi-family projects with playgrounds, meeting rooms, daycare centers — the type of housing that gives tenants a sense of community.

Affordable units may exist ‘solely on paper’

Still, state and local governments should continue encouraging homeowners to add accessory dwelling units. They are an excellent way to increase the state’s housing supply quickly and relatively inexpensively, and frankly, the state needs all the housing it can get.

But let’s face reality: Some ADU owners will be inclined to charge whatever the market will bear.

Absolutely nothing wrong with that, but it is egregiously misleading to count that as “affordable” housing.

It’s a way to deprive low-income workers of the housing they deserve, forcing them to commute long distances or to live in overcrowded, often sub-standard living quarters.

Here’s how the San Mateo County grand jury explained it: “Without accountability through oversight and regulations, low-, very low-, and moderate-income housing now planned in some San Mateo County jurisdictions may end up existing solely on paper and never in operation.”

California needs to step up its game by requiring all jurisdictions to have an effective monitoring program in place before they are permitted to count ADUs as affordable. It starts by acknowledging that ADUs are being misused by rich communities to get around affordable housing laws.

There should also be periodic auditing to ensure that ADUs are properly classified after they come online.

And at some point, could we have a more comprehensive survey of ADU owners?

California has an affordable housing crisis on its hands, and accessory dwelling units are one way to alleviate it.

But pretending that high-rent, backyard bungalows are “affordable housing” only masks the problem.

Don’t let that happen, California.

This story was originally published August 4, 2023 at 5:00 AM.