by James Higgins
In the past five years, few topics in zoning, development, and real estate have acquired a higher profile than Accessory Dwelling Units, abbreviated ‘ADU’ (also referred to as ‘granny flats’, ‘granny cottages’, ‘casitas’, and ‘guest houses’).
What, exactly, is an ADU ? According to California’s Department of Housing and Community Development,
An ADU is an accessory to a primary residence and has complete independent living facilities for one or more persons….[1]
A ‘Junior’ ADU (JADU) is a subspecies, in which space inside a single-family home is converted into a dwelling for independent living.[2]
The cost of constructing an ADU varies by builder, region, and the size of the unit. One North Carolina contractor quotes a figure of between $80,000 and $200,000, while a California contractor quotes a figure of $200,000 and $400,000. [3] [4] [5]
Prefabricated ADUs are a growing market and Samara, a company formed by Joe Gebbie (a co-founder of Air BnB) offers a one-bedroom model for $299,000 (refer to picture below). [6]
Three-dimensional representation of a one-bedroom, prefabricated ADU marketed by Samara (samara.com)
Another company, ‘Boxabl’, promises prefabricated ADUs (referred to as ‘casitas’) that cost about $70,000. A casita measures 361 square feet, with 9-foot, 6-inch ceilings, and (according to Boxabl) upon delivery can be ‘unboxed’ and made habitable in one day. While Boxabl promotes the casita as costing $250 per month, when necessary ancillary costs, such as a foundation, water, and sewer lines, and an electrical line are factored in, the monthly cost can reach $500 or more.[7]
Regardless of how ADUs are fabricated, the liberalization of state- and municipality-level zoning practices to accommodate these structures was demonstrated in 2020, when California passed laws that prohibited localities from restricting the emplacement of ADUs. As of 2023, California was among the leading states in implementing granny flats, with approximately 20% of annual housing production categorized as ADUs.[8] [9] [10]
Concomitant with the increase in legislation authorizing ADUs, is controversy over how well they achieve the objective of providing affordable housing.
For many progressives, ADUs are an ideal choice to provide inexpensive housing, particularly in municipalities where the cost of renting or owning apartments, townhomes, and single family homes is beyond the reach of many families.[11] [12] [13] [14]
However, opponents of ADUs argue that liberalizing the placement of these units brings unintended problems, such as the likelihood that ADUs will be used as short-term rentals (a profitable strategy for homeowners, but one that conflicts with the promotion of these structures as affordable housing). It also is difficult to monitor ADU construction and habitation to prevent disruption to neighboring properties. Some observers argue that the main beneficiaries of ADUs are wealthy, white homeowners, who have the capital necessary to construct guest homes and cottages on their properties.[15] [16] [17] [18] [19] [20] [21] [22] [23]
The failure of ADUs to provide affordable housing is exemplified in San Diego, where four years ago, the city implemented a ‘Bonus’ program to encourage property owners to build ADUs expressly designated for low-income tenants. In fact, as of April, 2024, not a single ‘Bonus’ ADU has been set aside for low-income tenants. Not only are these structures being occupied by higher-income tenants, but homeowners are not the primary beneficiaries of the Bonus program:
These multi-unit projects are exclusively the product of for-profit developers and their investors, who outbid first-time homebuyers and move-up families and singles. There are documented instances of these corporate buyers willfully misleading sellers by falsely claiming they will not significantly alter the existing home, or will add only a “casita” or at most one ADU and one Junior ADU, as mandated by state law (and endorsed by all reputable community groups).[24]
While California is at the forefront of promoting ADUs as a new paradigm for affordable housing, according to a February, 2024 editorial in the Washington Post, governors in many blue states now are advocating for ADUs. But even in Virginia, where the governor is a Republican, polities governed by progressive politicians have been championing ADUs.[25]
Democrats in the Virginia state legislature have been introducing bills mandating blanket approval of ADU construction in all municipalities. In the last 16 months, several bills (HB 900, SB 304, and HB 2100), all seeking to allow ADUs by right in residential neighborhoods statewide, have been introduced. These bills specifically prohibit localities from implementing measures (such as requiring dedicated parking, mandatory lot sizes and setbacks, and requiring consanguinity between the occupants of the ADU and the primary dwelling) to control ADU placement. [26] [27]
All three bill sponsors have bona fide progressive credentials. Sally Hudson, the sponsor of HB 2100, has in the past also submitted bills mandating ‘inclusionary zoning’; restricting the ability of landlords to evict tenants; and “…faster redevelopment of public housing projects.” For his part, Saddam Azlan Salim, sponsor of SB 304, has introduced a bill to allow municipalities to regulate the use of gasoline-powered leaf blowers (presumably as a measure to combat climate change). [28] [29]
Kannan Srinivasan, the sponsor of HB 900, was a Virginia Realtors® ‘Realtor® Champion’ for the general election of November 2023, indicating that some ADU advocates share shared goals with the realty enterprise.[30]
Interestingly, none of the bills have language addressing whether ADUs can, or cannot, be used as short-term rental properties.
Some Virginia polities are not waiting for action by the state legislature. For example, in September, Richmond passed a zoning ordinance to allow one ADU to be constructed ‘by right’, on any single-family plot in a residential area.[31]
The ordinance exhibits a carefully fashioned dexterity, in terms of accommodating short-term rental enterprises: the ordinance allows ADUs to be rented in the short-term, but not a combination of home and ADU located on the same lot. This past July, the head of the city’s planning and zoning department, Kevin Vonck, acknowledged that allowing short-term rentals of ADUs will interfere with the availability of these structures for longer-term occupancy, stating “there’s no guarantee at first that housing unit (i.e., the ADU) will be available to the public.” [32] [33]
Mr. Vonck’s admission would seem to contradict, in a decided manner, the evangelism for ADUs as a solution to the shortage of affordable housing. However, Vonck’s remark apparently has gone unnoticed by Richmond’s progressives, among them Charles Yang, a champion of ADUs who, in January 2023, founded ‘RVA YIMBY’, a ‘pro-housing movement’ in the greater Richmond area.[34] [35]
The problems with ADUs as putative affordable housing have not deterred progressives in the Charlottesville city government from promoting these structures. In February, 2024, the city issued a draft ‘Affordable Dwelling Unit Monitoring and Procedures Manual.’ The Manual, which is 12 pages long, observes that, ‘To ensure that projects that include ADUs are financially feasible and get built, ordinance requirements are calibrated to market conditions.’ The Manual is somewhat evasive on the issue of short-term rentals of ADUs; while it does not expressly prohibit ADU owners from this practice, it stipulates that tenants of ADUs cannot sublease the structures for ‘long-term or short-term vacation rentals at any time.’ [36]
According to the draft ADU Manual, the city’s Office of Community Services (OCS) will examine documentation submitted by property owners to affirm ADUs are “… comparable with market-rate units in the same project.” This stipulation of course is dependent on conscientious self-reporting by ADU owners.
Some Charlottesville residents endorse the city’s ambitions; for example, in an August, 2023 article, Len Schoppa, the representative for the Kellytown Neighborhood Association, stated that “…there is support for ending R-1 and allowing more ADU’s and townhouses” among the residents of that low-income neighborhood. [37]
As of May, 2024, Charlottesville is defending itself from a lawsuit filed in January over the city’s new zoning code, which promotes ‘missing middle housing.’ Given that the new code stipulates requirements for ADU construction, the disposition of granny cottage construction in the city likely will be an evolving endeavor. Charlottesville residents, and indeed residents of municipalities throughout the state, may find it prudent to monitor efforts to liberalize ADU placement in their communities. Residents will want to ask: are these structures genuinely providing affordable housing, or are they a convenient way for landowners and developers to earn revenue by exploiting social justice initiatives ? [38]
DISCLAIMER: The views expressed in this Commentary solely are those of the author.
[1] California Department of Housing and Community Development, “Accessory Dwelling Unit Handbook, Updated July 2022,” July 2022, page 3, https://www.hcd.ca.gov/policy-and-research/accessory-dwelling-units.
[2] ibid
[3] Cottage, “Cost of Building an ADU in California in 2023,” January 30, 2023, https://www.cotta.ge/resources/adu-costs.
[4] Phillip Love, “How Much Does an ADU Cost?,” Feel Love Homes (blog), October 10, 2023, https://feellovehomes.com/how-much-does-an-adu-cost/.
[5] As an example of construction costs and consequent revenue, according to a May 13, 2024 article in The Los Angeles Times, in the Eagle Rock neighborhood of Los Angeles, a homeowner spent $354,000 to convert their detached, two-car garage into a 1,000 ft2 ADU, which rents for $4,500 per month. “They spent $354,000 to build a modern ADU. Now they rent it out for $4,500 a month,” by Lisa Boone.
[6] Roshan Abraham, “Airbnb’s Cofounder Will Sell You a Tiny Home for the Price of a Regular Home,” Vice (blog), November 1, 2023, https://www.vice.com/en/article/dy35em/airbnbs-cofounder-will-sell-you-a-tiny-home-for-the-price-of-a-regular-home.
[7] https://www.boxabl.com/casita/. Also, https://www.youtube.com/watch?app=desktop&v=3plLxp_7Jlo explains the ancillary costs for a casita.
[8] Kelsey Neubauer, “Inside California’s Tiny-Home Takeover,” Business Insider, February 24, 2023, https://www.businessinsider.com/adu-tiny-homes-affordable-housing-california-laws-2023-2.
[9] “New Rules Allow More ADUs across California | SB 13, AB 68, AB 881,” Californians for Homeownership, accessed February 20, 2024, https://www.caforhomes.org/aduupdate.
[10] The 20% statistic comes from Christopher Elmendorf, “The Housing Treadmill,” City Journal, 2023, https://www.city-journal.org/article/the-housing-treadmill.
[11] Emily Hamilton, “The Role of ADUs in Easing America’s Housing Crisis,” Governing, Apil 2023, https://www.governing.com/community/the-role-of-adus-in-easing-americas-housing-crisis.
[12] Margaret Morales, “How Backyard Cottages Could Help Close the Affordable Housing Gap,” Sightline Institute (blog), August 15, 2018, https://www.sightline.org/2018/08/15/adus-backyard-cottages-affordable-housing/.
[13] Wyatt Gordon, “Can Carriage Houses and Granny Flats Ease the Housing Crisis?,” Virginia Mercury, March 8, 2023, https://www.virginiamercury.com/2023/03/08/can-adus-ease-the-housing-crisis/.
[14] Jenny Schuetz and Eve Devens, “Can Income-Restricted ADUs Expand the Affordable Housing Stock in Los Angeles?,” Brookings, March 4, 2024, https://www.brookings.edu/articles/can-income-restricted-adus-expand-the-affordable-housing-stock-in-los-angeles/.
[15] Natalie Bicknell Argerious, “Study Reveals Wealthy White Homeowners Benefit Most from Backyard Cottages – The Urbanist,” October 17, 2018, https://www.theurbanist.org/2018/10/17/study-reveals-wealthy-white-homeowners-benefit-most-from-backyard-cottages/.
[16] “Affordable Housing at What Cost: Presidio Sentinel,” January 2, 2022, https://presidiosentinel.com/local-news/affordable-housing-at-what-cost.
[17] Connor Thomas, “Summit County Bans Short-Term Rentals in Guest Houses, in Line with State Policy,” KPCW | Listen Like a Local, November 9, 2023, https://www.kpcw.org/summit-county/2023-11-09/summit-county-bans-short-term-rentals-in-guest-houses-in-line-with-state-policy.
[18] Steve Price, “New ADU Being Built Inches from Neighbor’s Normal Heights Home | What You Can Do If Faced with Something Similar,” cbs8.com San Diego, May 19, 2023, https://www.cbs8.com/article/news/local/working-for-you/new-adu-being-built-inches-from-neighbors-home-normal-heights/509-0546753f-e4cf-4e42-a4ba-a1122040d326.
[19] Gale Melcher, “Greensboro and Winston-Salem Debate Accessory Dwelling Units, Short-Term Rentals amidst National Housing Crisis,” Triad City Beat (blog), May 1, 2023, https://triad-city-beat.com/greensboro-and-winston-salem-debate-accessory-dwelling-units-short-term-rentals-amidst-national-housing-crisis/.
[20] Shelby R. King, “Why ADUs Can’t Solve the Nation’s Housing Crisis,” Shelterforce, May 17, 2022, https://shelterforce.org/2022/05/17/why-adus-cant-solve-the-nations-housing-crisis/.
[21] Mehdi Vatani, “Pros and Cons of Building a Granny Flat | Valley Home Builders,” accessed January 24, 2024, https://valleyhomebuilders.com/pros-and-cons-of-building-a-granny-flat.
[22] Dorian Hargrove, “ADUs Rented out as Short-Term Rentals,” cbs8.com, December 13, 2023, https://www.cbs8.com/article/news/investigations/short-term-rentals-and-adus/509-b577555d-54f3-44c8-9bcc-75cca9bc746f.
[23] Krueger, Paul, “Is $2,000 a Month for 480 Square Foot ADU ‘Affordable Housing’? San Diego City Thinks So,” OB Rag, December 17, 2021, https://obrag.org/2021/12/is-2000-a-month-for-480-square-foot-adu-affordable-housing-san-diego-city-thinks-so/.
[24] Krueger, Paul, “Why San Diego Should Not Be Awarded Anything for Its ‘Bonus ADU’ Program — Not One ADU Unit Has Been Built as Low-Income Housing,” OB Rag, April 18, 2024, https://obrag.org/2024/04/why-san-diego-should-not-be-awarded-anything-for-its-bonus-adu-program-not-one-adu-unit-has-been-built-as-low-income-housing/.
[25] Washington Post Editorial Board, “Build, Baby, Build ! Governors Take a Walk on Housing’s Supply Side,” The Washington Post, February 24, 2024, https://www.washingtonpost.com/opinions/2024/02/24/housing-governors-affordable-red-tape/.
[26] HB 900 ‘Zoning; developmental and use of accessory dwelling units,’ sponsored by Kannan Srinivasan, and SB 304 ‘Zoning; development and use of accessory dwelling units,’ sponsored by Saddam Azlan Salim, have identical wording and were introduced in 2024. Delegate Sally L. Hudson is the sponsor of HB 2100 ‘Accessory dwelling units; establishes authority & requirements for localities in development & use,’ which was introduced, but later tabled, in 2023.
[27] As of May 2024, none of these bills have been passed by the legislature, but HB 900 and SB 304 are being ‘reviewed’ by an entity known as the Accessory Dwelling Unit workgroup of the Virginia Housing Commission, according to a personal communication from D. Blount, May, 2024.
[28] Sean Tubbs, “Delegate Sally Hudson Meets with Regional Housing Partnership,” Information Charlottesville, December 22, 2022, https://infocville.com/2022/12/22/delegate-sally-hudson-meets-with-regional-housing-partnership/.
[29] Saddam Azlan Salim, “SB 305 Gas-Powered Leaf Blowers; Local Prohibition or Regulation, Civil Penalty,” Pub. L. No. SB 305 (2024), https://lis.virginia.gov/cgi-bin/legp604.exe?241+sum+SB305.
[30] https://virginiarealtors.org/realtor-champion-endorsement-list/. In fairness to Srinivasan, there are 132 ‘Realtor Champions’ listed on the Virginia Realtor Champion website…….including Saddam Azlan Salim.
[31] Jeremy Lazarus, “Council Changes Housing Zoning Policies,” accessed January 24, 2024, http://richmondfreepress.com/news/2023/sep/28/council-changes-housing-zoning-policies/.
[32] Kevin Vonck’s quote comes from Jahd Khalil, “Richmond Eyes Major Zoning Changes for Short-Term Rentals, Accessory Units,” VPM, July 26, 2023, https://www.vpm.org/news/2023-07-25/short-term-rental-airbnb-vrbo-adu-sup-str.
[33] Robin Schwartzkopf, “Parking Minimums, ADUs, and Airbnbs — Your Guide to New Zoning Ordinances,” RICtoday, September 26, 2023, https://rictoday.6amcity.com/city/three-zoning-changes-update-richmond-va.
[34] Wyatt Gordon, “Virginia Is for YIMBYs: The pro-Housing Movement Spreading across the Commonwealth,” Greater Greater Washington, March 23, 2023, https://ggwash.org/view/88994/virginia-is-for-yimbys-the-pro-housing-movement-spreading-across-the-commonwealth.
[35] “RVA YIMBY,” RVA YIMBY, undated, https://www.rvayimby.org/.
[36] Sean Tubbs, “Charlottesville City Council Adopts Affordable Dwelling Unit Manual,” Information Charlottesville, February 16, 2024, https://infocville.com/2024/02/16/charlottesville-city-council-adopts-affordable-dwelling-unit-manual/. Draft manual, pages 8 and 9.
[37] Sean Tubbs, “Deadline Looming Cville Weekly August 2024,” C-VILLE Weekly, August 9, 2023, https://www.c-ville.com/deadline-looming.
[38] Anahita Jafary, “Lawsuit Filed over Charlottesville’s New Zoning Rules,” https://www.29news.com, January 18, 2024, https://www.29news.com/2024/01/18/lawsuit-filed-over-charlottesvilles-new-zoning-rules/.
