Tag Archives: ADU

Jumping the Affordable Housing Shark

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"Henry Winkler Happy Days 1976" by ABC Television

The Fonz

Realtor.com quoted me in Could Fonzie Solve America’s Housing Shortage? It opens,

Call me old-fashioned, but in my heart of hearts, Fonzie from the 1970s TV show “Happy Days” is still the epitome of cool. That leather jacket. The shades. Those thumbs!

He may also be the solution to America’s housing shortage.

As you may recall, Fonzie lived above the Cunninghams’ garage—offbeat living quarters that are making a big comeback today thanks to BIMBY, short for “builder in my back yard.” BIMBYs carve out small, bootleg homes on their property by renovating work sheds, upgrading floors over garages, or raising new structures from scratch.

BIMBYs typically create these dwellings for aging parents (thus their not-so-sexy nickname “granny flats”), or to rent out to college students who can’t afford traditional apartments. Their renaissance is due to plain old necessity: Housing is just too damn expensive. A BIMBY home, though modest, is a deal for both tenants and cash-strapped homeowners. It’s a win-win scenario for Cunninghams and Fonzies alike!

That’s why Logan Jenkins, a journalist for the San Diego Tribune, recently suggested the BIMBY resurgence could fill a desperate need for affordable housing in areas where the cost of living on new homes and rentals has spiraled way out of control.

“If 10% of the homeowners in San Diego County added 450 square feet of separate living space to their properties, the affordable housing crisis would be largely over,” Jenkins argued.

And far from dragging down the neighborhood with riffraff, such housing “enables a neighborhood to maintain diversity that otherwise would be lost in a hot housing market,” according to Larry Ford, a geographer and author of “The Spaces Between Buildings.” After all, wasn’t Fonzie the life of the party?

This may explain why certain cities are embracing BIMBYs with open arms. Portland has changed its local laws to forgive their developer fees. Santa Cruz offers pre-approved architectural plans, loans, and fee waivers to what it calls “accessory dwelling units,” or ADUs, spurring a fourfold increase in applications. And other local governments are following suit.

“ADUs could make a big impact in curing housing issues in many locations,” says John Lavey with Community Builders, a nonprofit that has studied the trend, “especially in desirable locations such as Bozeman, Montana, where I’m located, where housing and rent costs exceed national averages. And for millennials seeking walkability and neighborhood authenticity, these ADUs are in high demand.” 

But not all communities are automatically lining up to accept these BIMBY newcomers.

“Zoning limitations on accessory units were adopted by lots of local planning boards that were consciously rejecting them for their communities,” says David Reiss, research director at the Center for Urban Business Entrepreneurship at Brooklyn Law School. To change the regulations, BIMBY advocates would need to go head to head against the NIMBY (“not in my back yard”) crowd, who argue that an influx of Fonzies could drive down property values.

Compact Units: Mountain or Molehill?

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NYU’s Furman Center has posted a short Research Brief, Compact Units:  Demand and Challenges. The brief notes that there is no formal definition of a compact or micro unit of housing, but

the term is typically used to refer to units that contain their own bathroom and a kitchen or kitchenette, but are significantly smaller than the standard studio apartment in a given city. Accessory dwelling units (ADUs) are self-contained units located on the property of a single-family home. Sometimes ADUs are separate structures, like a cottage on the same lot as a primary dwelling; sometimes they are attached to the primary structure, located in a basement, in an extension, or over a garage.

Proponents of compact units argue that they allow seniors to live independently, respond to changing household sizes and demographics, reduce sprawl through urban infill, mitigate the environmental effects of larger developments by reducing energy consumption, free up larger units for families, and help cities provide housing affordable to a wider range of households. (2)

The brief is a very useful overview of the debate concerning compact units but my own take is that they represent a mere molehill of possibility when it comes to affordable housing. No new construction in cities, unless heavily subsidized, is geared toward low-income households and probably only a small portion of such new construction is geared to moderate-income households. The economics of new construction just don’t allow it.

This is not to say that New York City shouldn’t change its larger-than-average minimum unit size regulations (400 square feet) so that they are in line with those of other cities (220 square feet). These small units could work well for all sorts of one-person households, which, by the way, make up more than half of all households in NYC. They just wouldn’t be low-income households. But, by expanding the total number of units available, they can put at least some downward pressure on rents.

My bottom line: compact units are good, but they will not provide the mountain of affordable housing that some claim they can.