Making ADU Development Equitable in California

Making ADU Development Equitable in California

At an event hosted by the Terner Center for Housing Innovation, panelists discussed strategies to help ensure the benefits of an enabling regulatory environment for building ADUs are available to landlords on an equitable basis.

California’s ongoing housing shortage and resulting high housing costs prompted state lawmakers, beginning in 2016, to pass a series of laws legalizing and facilitating the construction of accessory dwelling units (ADUs ) in the state. Thanks to this more hospitable legal and financial landscape, ADU licensing and construction has grown rapidly in California in recent years. However, a recent report by researchers at the University of California, Berkeley’s Terner Center for Housing Innovation reveals barriers to racial and economic equity in ADU production. On August 26, 2022, the Terner Center, along with the Casita Coalition, which promotes small home development in California, hosted a webinar to discuss the report’s findings. Moderated by report co-author and Terner Center policy director David Garcia, panelists included Nikki Beasley, executive director of Richmond Neighborhood Housing Services; Charles Ampate, housing counselor with Richmond Neighborhood Housing Services; Iliana Nicholas, Program Associate at East Palo Alto Community Alliance and Neighborhood Development Organization; and Katherine Peoples, executive director of HPP Cares.

Garcia noted that the creation of ADUs in California has been disproportionately concentrated in affluent areas of the state, which means that many middle- and low-income homeowners do not have access to ADU benefits. creation of wealth and income. Karen Chapple, co-author of the report and professor of urban planning at the University of California, Berkeley, discussed many of the barriers identified by the research team: ADUs are expensive and difficult to fund, the permitting process for ADUs are often frustrating for landlords, local planning departments are often not equipped to advise landlords on ADU policy, and many landlords simply lack information about ADUs in general.

Create clear guidance for owners

Both Nicholas and Beasley reported that their organizations served as educational resources for owners interested in building ADUs. One of the reasons their organizations have taken on this role is that, unlike developers, lay people generally have little experience navigating the fragmented bureaucratic structures of the relevant government agencies (such as the planning department and the water department) needed to undertake a one-time UDA project. .

This need, Peoples said, suggests the importance of developing single points of contact within planning departments where owners can seek comprehensive information and avoid the daunting process of jumping from one department to another for a single project. Nicholas recommended that agencies develop a strong customer service orientation designed to build trust, particularly in jurisdictions where trust between local planning departments and community members has eroded due to an adversarial approach to regulatory enforcement. Providing free, authoritative information, Peoples said, can streamline the authorization process for owners, save them money and help them avoid scammers who might take advantage of this lack of information.

Overcome funding and licensing challenges

Although ADUs have rarely been easy to finance with existing financial tools, the challenges faced by low- and middle-income households may be even greater, says Ampate, pointing to their higher prevalence of past financial challenges, such as bad credit or bankruptcy, which makes obtaining financing more difficult. Additional challenges exist when the ADU is not a new build but rather an existing unauthorized unit that needs to be brought up to code, as Garcia observed.

Nicholas noted that many unauthorized UPAs resulted from cultural preferences for intergenerational living. For Ampate, the desire for multi-generational living may mean a landlord may not derive rental income from the ADU. Without rental income, financing an ADU can become more difficult.

To fill this information gap and help owners of unauthorized ADUs bring their units up to code, Peoples again emphasized the importance of trust. Peoples said his organization, for example, operates as a safe space where owners with unauthorized ADUs can ask questions without fear of regulatory action, learn how to get their units up to code, and access grants to fund this process. Nicholas advocated for programs that offer amnesty to existing, unauthorized ADUs as a tool to help landlords. Beasley described a program in Oakland that provides access to home improvement loans to homeowners earning less than 80% of the area’s median income so they can bring their homes up to standard.

With ADUs’ broad appeal to California homeowners of all incomes, practitioners are determining how to ensure this recently legalized vehicle for wealth building is equally accessible to everyone.

Julio V. Miller