By Pamela Babcock©2019 Community Associations Institute
OWNING OR RENTING a suitable home in the U.S. is increasingly out of reach for many. As lawmakers, housing officials, and advocates scramble to find solutions to the affordable housing crisis, there's an increasing focus on accessory dwelling units (ADUs)—also known as mother-in-law suites or granny flats.
While no one says ADUs are a silver bullet for the housing problem, local and state legislators, particularly in areas where there's a dearth of so-called “missing middle housing," are progressively looking to ease single-family-home zoning ordinances to pave the way for more ADUs. Rules to develop the structures, which can be detached cottages or basement and attic additions, vary by state. A lot of places still discourage or prohibit them.
Those opposed to ADUs on single-family lots, which include many community associations, fear they'll lead to overcrowding, exacerbate parking problems, put more demand on infrastructure, and potentially change the neighborhood character, particularly if they become short-term rentals through sites such as Airbnb. A growing number of community associations are grappling with the issue of ADUs and working to learn more about what legislative changes might mean to their communities.
Meanwhile, other recent measures to address housing affordability also are likely to affect community associations, including changes to Federal Housing Administration (FHA) condominium financing guidelines and a trend to building smaller homes on smaller lots in new communities.
“The impact of affordable housing initiatives on community associations will vary from community to community, and from state to state, having a greater impact on some but not others," says Jeffrey A. Beaumont, vice chair of CAI's California Legislative Action Committee and an attorney with Beaumont Tashjian in Woodland Hills. He adds that this growing tide of changes could all bring “increasing costs associated with operating and managing the association."
Even if city or county zoning requirements are changed to make ADUs easier to install, a community association's governing documents may provide further guidance that allow it to regulate or restrict ADUs, says Beaumont, a fellow in CAI's College of Community Association Lawyers. The impact to associations also may depend on the language of the statute. Boards should consult legal counsel before considering amending governing documents to ban or otherwise restrict the construction or use of ADUs, he adds.
ADUs have been called dozens of things over the years, including laneway houses, sidekick, JADA (junior accessory dwelling unit) and “casitas," according to Martin Brown, co-editor of accessorydwellings.org, a website that focuses on ADUs. To further complicate things, ADUs can come in the form of “tiny houses" if on a foundation, but tiny houses on wheels aren't ADUs. Legally, an ADU is part of the same property as the main home, so—except in extraordinary situations—it can't be bought or sold separately.
People want to build ADUs for lots of reasons, but the most common is to house a family member, such as an elderly parent or adult child who can't get a job after college, or a renter. Brown understands why people might worry that an ADU built for an in-law might later be turned into an Airbnb because that's one of the best things about an ADU: They provide flexibility.
“It can be a house for your mother-in-law. It can be an Airbnb. It can be an office. It can be lots of things," he says. Research has shown that over time, the use of most ADUs does tend to change, but using an ADU as a short-term rental typically doesn't last forever, Brown says.
Perhaps one of the most unusual things about ADUs is that they're most frequently created by homeowners working as developers, not professional developers. That may allay fears that ADUs will proliferate where they are allowed. Building an ADU is a big job for the average homeowner, particularly because it can take a long time to get financing, permits, and complete construction.
“ADUs do not just take over streets," Brown says. “It takes a long time for the percentage of properties to climb to even a few percent."
Because ADUs can provide housing options for seniors who want to age in place, AARP has been lobbying to promote their adoption across the U.S. The group says ADUs can enhance existing neighborhoods by introducing greater diversity across age, ability-level, and income, while providing an option for aging in place. If an elderly parent can live close to family, it may help mitigate feelings of disconnect.
“We have a real crisis of isolation and loneliness," says Danielle Arigoni, director of livable communities for AARP.
A recent AARP survey found that 3 out of 4 adults age 50 and older want to stay in their homes and communities as they grow older, but many don't see that happening.
According to AARP's 2018 Home and Community Preferences Survey of adults age 18 and older, one-third (33%) of respondents said they'd consider building an ADU on their property. The most compelling reason, cited by 67%, was to live near others but still have their own space. More than half (54%) reported that they wanted to lower housing costs by either getting income from renting out the ADU or by moving into an ADU themselves and renting out their primary home.
Arigoni fears that some community association policies might be an additional barrier to creating more diverse housing choices. While regulations at the municipal level, for example, that prevent non-family members from living together “can often be solved," if they aren't solved at the homeowners association level, “then those barriers still exist."
“It's really important that homeowners associations think about the needs of who we are as a country," Arigoni says, adding that community associations can play an important role “in opening the doors for some different housing solutions that can better meet the needs of everyone."
People want to build ADUs for lots of reasons, but the most common is to house a family member, such as an elderly parent or adult child who can't get a job after college, or a renter.
It's not clear yet what impact proposed legislation to ease ADU restrictions means for community associations.
Facing suburban sprawl and a mounting housing shortage, the Lexington-Fayette Urban County Government in Kentucky has proposed an ordinance that would allow ADUs up to 800 square feet on all urban, single-family residential lots. Members of the Stonewall Community Association, which consists of about 1,000 homes in southwest Lexington, have had meetings about the structures. The group's leadership says it looks forward to learning more.
“We have no experience with them yet, but we are doing research and listening to our city leaders," says Kimberly Justus, president of the Stonewall Community Association.
California recently passed Assembly Bill 670, which prohibits the state's estimated 50,000 homeowners associations from banning construction of ADUs but allows associations to impose “reasonable restrictions."
The bill didn't pass without a fight. CAI's California LAC opposed the bill, as did some influential communities.
The San Lorenzo Village Homes Association, a community of nearly 5,800 single-family homes 25 minutes southeast of San Francisco, pushed for the bill to exempt any common-interest development that was 50 years or older, noting that its infrastructure was not designed to support the influx of people that could come from ADUs.
Established in 1944 to house wartime workers and soldiers returning from World War II, San Lorenzo Village Homes is one of the nation's first planned communities. Over the years, the community has OK'd the construction of additional condominium projects, low-income senior housing, and soon will have a new market-rate apartment community. By Bay Area standards, the community of mostly 1,000-square-foot homes are “entry-level." Resales go for $650,000 to $750,000.
“People were really shaken up," by the idea of having ADUs in the community, says Emanuel Satingin Robinson, secretary/treasurer of the San Lorenzo Village Homes Association board. “We're not saying we're against ADUs, but the board is very concerned about how it's going to impact the look and feel of the neighborhoods."
Beaumont, of the California LAC, argues that when it comes to reasonable-use restrictions in recorded declarations, such as the regulation of ADUs, it should be left to the association and its members to decide whether ADUs should be allowed based on “the unique needs of the community."
Even if zoning requirements are changed to make ADUs easier to create, Beaumont says the association's governing documents, such as the declaration or rules and restrictions, may provide further regulations.
Whether proposed legislation to ease restrictions will impact associations also depends on the language of the statute, Beaumont says. For example, AB 670 voids any provision of a community association's governing documents that either effectively prohibits or unreasonably restricts the construction or use of an accessory dwelling unit or “junior accessory dwelling unit" on a lot zoned for single-family residential use.
However, the new law allows “reasonable restrictions" that do not unreasonably increase the cost to construct or effectively prohibit the construction of the structures.
“Therefore, associations may restrict or otherwise regulate ADUs in California, but cannot prohibit them," Beaumont says.
Robinson, who has a background in urban planning and is a planner with Landsea Homes, was born in San Lorenzo Village and lived there until he left for college. Because the community is nearly 75 years old, there are big concerns about how ADUs might impact stormwater and sewer and water systems, road maintenance, and parking, which is already a headache. The potential for short-term rentals is another detractor.
The next step, Robinson says, is for San Lorenzo Village to form design guidelines that “would basically integrate ADUs into the community" and spell out how someone who wants to build one could.
“We don't really see any other way that we're going to be able to fight what's happening in Sacramento," Robinson says.
Among other things, guidelines are likely to address the need for stormwater catch basins for each ADU, since the state of California requires all stormwater be held on each individual parcel rather than allowing runoff, Robinson says. Aesthetically, the board wants to ensure that any ADUs “match" the original architecture of the main house, particularly since in some communities, people “crane in" shipping containers to use as ADUs.
“We have a very Mayberry look," Robinson says. “But if we don't preserve that, what is the desirability of our neighborhoods?"
Community association boards should work with legal counsel to interpret laws on ADUs to determine whether they preclude communities from amending governing documents to ban or otherwise restrict their construction or use.
Depending on the state's definition of an ADU, the law may apply to attached or detached dwellings, or even garage conversions. Beaumont says that it's common for an association's declaration to prohibit use of a garage for a dwelling or other habitable purposes, and legislation may result in voiding such a restriction.
“The language of the statute or local ordinance will dictate the extent of the board's authority to regulate ADUs," Beaumont adds.
Some other affordable housing initiatives also could impact community associations.
Condominium approvals. Because many first-time buyers are likely to enter the housing market by buying condominiums, the Federal Housing Administration recently adopted a new policy that will allow individual condominium units to be eligible for FHA-approved mortgages even if the condominium project is not FHA approved. The policies became effective Oct. 15. (Read more about the changes.)
Smaller homes on smaller lots. One way to create more housing stock and help address affordability is by giving development a makeover by building smaller homes on smaller lots, according to a recent National Association of Home Builders report.
“Clearly, higher density building is the current trend. Cities, municipalities, and communities will be impacted," Beaumont says. In California, for example, proposed legislation would require local governments to allow higher-density development in certain areas to address the housing shortage. (Read more about local proposals.)
But smaller lots and smaller homes in new communities mean a greater number of people, impacting traffic and parking and resulting in more wear and tear on common area recreational facilities, such as swimming pools and fitness centers, Beaumont says. “The denser a community, the greater usage on common area facilities and amenities."
Boards within these communities will need to budget for more frequent maintenance and anticipate shorter lifespans for major common area components in their reserve study, which could mean higher assessments for owners.
Pamela Babcock is a writer and editor in the New York City area. Kiara Candelaria, associate editor of Common Ground™ magazine, contributed to this article.
MAXABLE, A SAN DIEGO-BASED online platform that educates California homeowners about accessory dwelling units (ADUs), recently tried to dispel some confusion in a blog post. A few comments from CEO Caitlin O. Bigelow may resonate with community associations:
They're “fantastic for seniors." An ADU conceived with an elderly person in mind can be designed based on their needs and made compliant with Americans with Disabilities Act access guidelines. Bigelow writes that she has clients in their 60s building units now for caregivers down the road, which gives them “peace of mind and future security."
ADUs aren't “as scary as people think." ADUs will never hold mass-market appeal because people like their backyards and privacy too much, Bigelow says.
Increased property taxes benefit schools. Building an ADU increases an owner's property tax, which is a downside. But some of those taxes go to the local school system, meaning that “neighborhoods with high numbers of ADUs are bringing in a lot more tax dollars for local schools," Bigelow writes.
They can provide income and stability to families. Having $1,500 in rental income each month means couples can “save for retirement, their kid's college, or afford that vet bill that sprung up unexpectedly," Bigelow writes. —P.B.
By Kiara Candelaria
HOUSING AFFORDABILITY IN THE U.S. is frequently discussed as an issue of steep property values limiting access to homeownership. However, engineer Chuck Marohn, founder and president of Strong Towns, notes that housing prices are influenced by a combination of factors, including costs of raw materials, land, and construction, development codes, and interest rates. Strong Towns is a nonprofit that supports better development models for cities, towns, and neighborhoods across the U.S. to make them more financially resilient.
Marohn adds that the conversation and media coverage around housing affordability is dominated by major urban cities such as San Francisco, New York City, and Washington, D.C. Little attention is given to rural areas, where incomes often are not high enough for residents to afford homes.
“It is very different in different places, and I think sometimes one conversation tends to dominate because it's the lived experience of the people who are writing the stories, but it's very out of touch," he explains. “The lived experience of over half of Americans is not affordable housing as runaway prices, it's affordable housing as wages are not keeping up."
Local housing markets demand solutions that fit their needs. Marohn believes builders have an opportunity to develop housing that can cause prices to fall more in line with incomes. Accessory dwelling units could be one such solution.
“Accessory dwelling units meet a niche in the market right now that is dramatically underserved," says Marohn. “Every city that aggressively builds accessory dwelling units will benefit from that over the long term."
Marohn believes that addressing housing affordability should ultimately be “a deeply local conversation," one where community associations can become involved by serving as conduits between their neighborhoods and city officials. “They have to be the partner with the local government and really strengthen that two-way communication," he says.
Kiara Candelaria is associate editor of Common Ground™ magazine.
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