Affordable housing 101: Why not build more granny units?

MENLO PARK — Erin Craig and Rich Dvorak knew it was time: Their grown daughter, who has severe disabilities, needed her own home. But where?

They decided to build a private studio for Kim — a separate apartment inside the family home in Palo Alto, where they had lived for 25 years. But Palo Alto has notoriously strict zoning rules for add-on units. So the couple scoured the Peninsula, hunting for a new house — only to discover that each city had its own patchwork of restrictions.

“I went shopping for our house with a 50-foot tape measure, because you have to measure all the setbacks,” Craig said. “It got complicated.”

It almost always does.

Amid the Bay Area’s housing crunch, a movement to ease restrictions on accessory dwelling units — officially referred to as ADUs, or informally as “granny flats,” companion units or in-law apartments — has gained traction in the last year. Local initiatives to relax land-use rules and liberalize permitting procedures have sprung up around the bay, as communities from San Jose and Palo Alto to Concord have adopted or are considering new ordinances.

“It’s a policy initiative whose time has come,” said Denise Pinkston, housing co-chair for the Bay Area Council, a prime mover behind some of the initiatives.

If just 10 percent of the Bay Area’s 1.5 million owners of single-family homes were to create granny flats for family members or other tenants, that would add 150,000 new units — most of them affordable — to the region’s infamously tight housing supply.

So says a growing number of affordable housing advocates — as well as a number of state legislators, who have proposed bills requiring municipalities to cut red tape and speed up permitting for this class of small, rentable dwellings, which can include backyard cottages and apartments within homes. The bills also would reduce some of the fees that can add a deal-breaking $10,000 to $60,000 to an accessory unit project.

“Nobody who’s sane is going to pay those fees,” said Sen. Bob Wieckowski, D-Fremont.

Wieckowski’s Senate Bill 1069 has passed the state Senate and is expected to come up for a vote in the Assembly next month. Among other provisions, it would prevent water and sewer agencies from charging hookup fees for ADUs built within an existing house or in an existing detached unit on the same lot.

Because many jurisdictions treat accessory units as if they were new single-family homes, Wieckowski said, “You pay the same fees you’re paying for a McMansion. Come on!”

Faced with those costs, thousands of homeowners build illegal units, bypassing safety codes — and depriving towns and cities of revenue that would accrue from legal units.

“We see it time and again,” said Kevin Casey, whose Emeryville-based company, New Avenue, manages the design and construction of accessory units. “People go, ‘What? You’re going to charge me to do something in my own home?’ The impact fees kill projects.”

But momentum may be shifting. New ordinances have been adopted in Concord, Oakland and Berkeley, as well as in San Francisco, Redwood City, Portola Valley and Half Moon Bay. San Jose, Mountain View and Palo Alto are all discussing new ordinances, as is San Mateo County, which wants to see more ADUs in unincorporated areas.

Why all the interest right now?

After World War II, as returning GIs and their families flooded the suburbs, there was a construction boom of single-family homes on large lots. To this day, many neighborhoods hold onto a “Leave it to Beaver” self-image, built around the nuclear family.

“There are people who think the single-family home is in the Bill of Rights — it’s sacred and there should not be ADUs or more cars on the street,” said Michael Brilliot, a San Jose planner involved with discussions for a new city ordinance governing ADUs.

But in 2016, hardly anyone is untouched by the housing crunch. A recent Bay Area Council poll showed that one-third of the region’s residents are thinking of leaving because of housing costs and traffic congestion. Increasingly, ADUs are held up as a relatively easy way to increase housing density while attending to the needs of college students, millennials, single parents, empty nesters and the elderly — among the many who can’t afford, don’t want or no longer need big single-family homes.

“Where is the housing for these people?” asked Rachel Ginis, a Marin-based residential designer and general contractor.

Ginis founded the nonprofit Lilypad Homes to promote the creation of “junior accessory dwelling units” of 500 square feet or less — a subclass of ADUs championed by Sen. Tony Thurmond, D-Richmond, whose own bill, AB 2406, is moving through the Legislature. Typically, a junior unit is created by doubling up an interior door — allowing a homeowner to secure the master bedroom and bath — to create a rental unit within a house, then adding a private entrance and kitchenette.

“Families have morphed over time,” Ginis said, “and yet our ideal of a single-family home goes unchanged. Our houses are not sufficiently flexible to change when people’s lives change — when an elderly relation becomes ill, when the kids go off to college, when a homeowner needs supplemental income to pay the mortgage.”

It’s time to think outside the box, because the housing crisis “isn’t going away any time soon,” said Karen Chapple, a UC Berkeley professor and housing specialist whose 2012 study of five East Bay communities showed that about 30 percent of homeowners expressed interest in an ADU.

“As soon as we get our next 2 million residents over the next 30 years, we’re going to have to invent new things like this,” she said. “We need to find solutions.”

Chapple built her own 420-square-foot cottage in her Berkeley backyard — and rents it out for $1,500 a month, though she said she could charge twice that in the current market. While some opponents of accessory units predict that most would fall into the hands of landlords looking to maximize rental charges, Chapple doubts that. Her research shows that just 38 percent of ADUs are rented to strangers; 25 percent are rented to family or friends, typically at reasonable rates, while 37 percent are used by homeowners as housing, office or studio space.

Els de Graauw, an assistant professor at the City University of New York, appreciated the cozy — to say the least — comforts of Chapple’s unit when she rented it earlier this summer.

“It has a little bit of a porch, so I can sit outside and have my breakfast, while looking out at this beautiful yard full of flowers,” she said. “The tiny house — that’s how I think of it — has big French doors, so it feels airy, even though it’s small.

“And the kitchen has everything you would want, even a dishwasher. I live in Brooklyn, and I don’t have a dishwasher in Brooklyn, so I feel this is quite luxurious.”

Erin Craig and Richard Dvorak are satisfied, too.

It took about eight months, but they finally bought a suitable house in Menlo Park. They converted the garage into a 640-square-foot studio with a private entrance — and daughter Kim, 26, has a home.

The fees were high — about $15,000 — and the construction costs were “ridiculous.” But in the end, Craig said, “It worked out really well. It’s a really nice solution for us. Our daughter is happy.”

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