Accessory dwelling units combat homelessness

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As neighborhoods gentrify, rental costs increase along with property values. That makes  for less affordable housing and contributes to homelessness. Shutterstock image.

Accessory dwelling units provide an independent living space outside the primary residence on a property. It might be a smaller house in your back yard that you rent to short- or long-term tenants. This is much the same as the Viking tradition of outbuildings to provide living space for members of your own household. Or it could be a basement apartment. Or you could add a few rooms to your house or above your garage. In any case, the accessory dwelling unit must have its own kitchen and bathroom and a separate entrance. Why would you want to do this?

According to the American Association of Retired Persons (AARP), more than 17 million adults over age 65 spend at least 30% of their income on housing. These days young people struggle to pay the rent on their apartments and older people have trouble maintaining their houses. Lack of affordable housing is a growing problem in many communities. And it’s a leading cause of homelessness. AARP is working with architects to develop housing that can meet these needs.

When we think of affordable housing, we usually think in terms of multifamily housing. However, many people object to low-income apartments in their neighborhoods. They cite reasons from traffic to parking to crime, and many are concerned that their property values will decline. In addition, high-density housing increases the demand on utilities such as water and sewage treatment. Accessory dwelling units also increase housing density, but put less of a burden on public services.

Accessory dwelling units solve several problems at once

A retired homeowner might have trouble keeping up with taxes and maintenance. Yet if prices are rising fast, selling the house may not yield enough to buy a smaller home in the same area. And there would still be maintenance, property taxes, and maybe association dues. However, the rent from an accessory dwelling unit could supplement their income. The homeowner could even move into the smaller unit and rent out the main house. Short-term rentals entail more work and more variable cash flow, but the rents are higher than for long-term rentals.

Traditionally in the US, home ownership has been the main vehicle for building wealth. But many people can’t afford to buy a home—or even pay rent. Young people with student loan debts may have a hard time scraping together a deposit for an apartment, let alone a down payment on a house. Health problems can strike a person of any age, leaving them disabled or in debt. And not everyone can get help from their parents for a down payment on a house.

In many urban areas, the high cost of housing is the main cause of homelessness. Appropriately designed accessory dwelling units can add to the affordable housing stock. It’s important to keep the design basic so that an affordable rent provides an acceptable return on the investment. This is not the place for granite counter tops and high-end appliances. However, energy-efficient design and Energy Star appliances help keep utility bills low. In any case, a small space doesn’t take much energy to heat and cool. AARP and June Grant have developed some design ideas to make these units work both socially and economically.

Video: June Grant, an architect, explains how accessory dwelling units can provide low-cost housing as well as income for older adults.

Zoning and other regulations

Two major obstacles to accessory dwelling units are zoning and other regulations. Because most such regulations are local, they vary from one municipality to the next. They include the following.

  • Zoning for single-family housing. Some cities allow accessory dwelling units only in certain areas. Beginning in 2018, Minneapolis permits them throughout the city. As of 2020, California allows the conversion of most single-family homes into three separate units.
  • Complex permitting processes. While it’s important that all construction be up to code, unduly complex regulations add to the cost of housing. They are also difficult to enforce consistently. Even building officials in the same department may not interpret them the same way. That makes it even harder to comply with them.
  • Minimum lot sizes. Some neighborhoods have regulations mandating minimum lot sizes for single-family homes. For example, in the Twin Cities metropolitan area, 65% of the land zoned for single-family homes requires a lot size of at least 1/4 acre.
  • Parking requirements. Cities may require a certain number of off-street parking spaces per house. Such a requirement would discourage conversion of a garage into an accessory dwelling unit.
  • Owner occupancy requirements. While most owners will live in either the main or the secondary house, some may want to rent out both. For example, you might get a job in another city but intend to return to this one. If you could rent out both units, you’d have a place to move back to that generates income while you’re away.

In addition, simply having multiple jurisdictions makes it difficult to employ efficiency measures such as prefabrication. What’s acceptable in one town may not receive a building permit in the next. Having a state housing law, as in California, guarantees some uniformity. It also keeps homeowners’ associations from imposing undue restrictions.

Zoning perpetuates historical racism

The opposition to multifamily housing—and to the people who need to live there…stems in part from decades of local government land-use rules that prioritize single-family housing. Today, however, these rules are increasingly viewed as a major reason that Black and Latino families are essentially shut out of the vast majority of the Twin Cities.—”Zoning Divide,” Maryjo Webster and Michael Corey, Star Tribune, 8 August 2021.

Single-family zoning is not explicitly racist. However, it perpetuates the legacy of redlining, racial covenants, and other overtly racist practices. Redlining is denying mortgage loans and other (usually financial) services on the basis of race or neighborhood.

In the early 1900s, city planners…wanted to protect all-white neighborhoods that had been created by racially explicit zoning after the Supreme Court ruled those laws unconstitutional. They realized that they could achieve the same goal by barring multifamily housing from those areas since most Black people could not afford to buy a home.—”Zoning Divide”

A racial covenant prohibits selling the property to anyone “of Chinese, Japanese, Moorish, Turkish, Negro, Mongolian or African blood or descent,” as thousands of deeds in Minneapolis once put it. The Supreme Court ruled racial covenants unenforceable in 1948. The Fair Housing Act of 1968 outlawed them, but their legacy lives on.

Covenants divided Minneapolis—and many other northern cities—by race. These residential segregation patterns persist today. And this physical segregation undergirds our contemporary racial disparities… Majority white neighborhoods have more parks and more generous tree cover.  Communities of color have more environmental hazards like landfills and highways. They have less access to medical care… Schools in these neighborhoods usually have fewer experienced teachers and less challenging curriculum.—Mapping Prejudice

Video: West Side Story’s “America” (1961) refers to discrimination in housing and credit.

Practical limits on accessory dwelling units

However, it would be a mistake to assume that zoning and other regulations are the only barriers to accessory dwelling units. To understand what these barriers are, it helps to consider who wants accessory dwelling units and why.

An accessory dwelling unit is too small to be of interest to a real-estate developer. Usually it’s a homeowner who wants separate housing for a family member, or who needs extra income to help pay the mortgage. Most homeowners don’t know how to plan such a unit, obtain the permits, or supervise the construction.

In addition, someone who struggles to pay their mortgage probably doesn’t have $150,000 or more to build a second house. It doesn’t help that appraisals often assign relatively low values to the secondary buildings on a property. That can make it much harder to get a bank loan.

As a result, even cities that have relaxed their regulations to encourage accessory dwelling units are not seeing large numbers of them. For example, Portland, Oregon, has accessory dwelling units on less than 1% of the properties where they’d be allowed.

Clearly it’s not enough to remove regulatory barriers; homeowners need more help than that. That could mean loan subsidies for building affordable housing. Mortgage lenders might need some education to understand the value of accessory dwelling units. Architects and contractors could specialize in planning, designing, and building them so that homeowners don’t have to navigate the process by themselves.

Accessory dwelling units can’t solve the problem of homelessness on their own. But they can add to the stock of affordable housing while providing homeowners some extra income.