Not Your Granny's Flat: ADUs Evolve As Game-Changing Solution To The Housing Crisis

Escalating rents, rising interest rates and inflation are making it increasingly difficult for people to find housing they can afford.

But many cities are trying to fix the problem by permitting the construction of accessory dwelling units (ADUs).

Often referred to as granny flats, carriage houses or casitas, ADUs are typically less than 1,000 square feet with one or two bedrooms. It must have private entrances, amenities and HVAC. ADUs cannot be bought or sold independently of the primary residence.

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ADUs offer several advantages, including:

• Rental income to boost home affordability for homeowners
• Multigenerational living that could reduce the cost of childcare and senior care
• Work-from-home spaces
• Affordable housing

In California, the lack of affordable housing prompted the state to revise its zoning laws in 2017 to make adding ADUs to single-family lots easier.

The changes proved successful. Construction of ADUs skyrocketed from 1,100 in 2016 to 23,600 in 2021, according to John Burns Research and Consulting. About 68,000 ADUs were built in the Golden State between 2017 and 2021.

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"These desirable areas have all been losing residents in recent years — in large part due to the lack of affordable housing options," said Scott Wild, senior vice president at John Burns' San Diego office. "Land is in short supply, and building new neighborhoods is a long and challenging process."

Other jurisdictions have followed California's lead and are using the state's policies as a starting point. Oregon now allows multiple units to be built on any lot, and Miami-Dade County last year approved permitting ADUs in unincorporated areas — now about 171,683 single-family properties are eligible to add an ADU, and the first permits were being reviewed in late June.

But not all neighbors are supportive of the movement. In Denver, which in June announced citywide zoning changes to allow larger ADUs suitable for families to live in, residents are concerned that a potential influx of short-term renters will jeopardize neighborhood stability, reduce privacy and increase traffic and privacy issues.

"While these counterpoints are valid, they may not be sufficient to halt the momentum of the ADU movement, considering the pressing need for more housing and the shortage of affordable housing alternatives," said Chelsea Scott, senior manager of John Burns' Denver office. "Other cities in Colorado and some neighboring states are considering similar ADU strategies."

Although NIMBYism is a common sentiment among residents faced with neighbors who are adding ADUs, opportunities abound as the trend evolves. Adding ADUs to established neighborhoods makes them more accessible to people who otherwise couldn't afford to live there. They also give homeowners a way to offset their monthly housing expenses.

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