On April 18^th, ULI San Francisco and the Terner Center for Housing sponsored a ULI program to unveil and discuss a major research study on accelerating creation of Accessory Dwelling Units or “ADUs,” an increasingly popular way to create market-rate and affordable housing within existing neighborhoods. This event served as the kick-off for ULI SF’s Housing the Bay Initiative!

The evening began with opening remarks from Carol Galante, the Faculty Director for the Terner Center for Housing Innovation at UC Berkeley.  Ms. Galante identified the well-known and much discussed need for housing, the efforts culminating in the adoption of statewide legislation intended to encourage ADU permitting, and the collaboration that led to the preparation of UC Berkeley’s recently released, “Jumpstarting the Market for Accessory Dwelling Units: Lessons Learned from Portland, Seattle and Vancouver.” The study was proudly sponsored by ULI San Francisco.

Karen Chapple, one of the co-authors of the study and a Professor of City & Regional Planning at UC Berkeley, then presented the key findings of the study, which examines three case study cities – Seattle, WA; Portland, OR; and, Vancouver BC.  She identified where reforms have resulted in more ADU construction than others as well as the survey results gathered from those that have constructed ADUs, or recently purchased a property with a new ADU. Ms. Chapple’s presentation highlighted the potentially significant gains that ADUs can have on housing inventory, as well as concrete suggestions for additional state and local reforms needed in California.

Following the presentation of the study, Micah Weinberg, the President of the Bay Area Council Economic Institute, moderated a well-rounded response panel focusing on cutting edge aspects of implementing ADU construction in the Bay Area along with a very engaged audience.

Yat-Pang Au, CEO and Founder of Veritas Investments, described Veritas’ efforts to implement ADUs in existing multi-family buildings.  He openly shared the construction costs and infrastructure challenges with ADU construction, as well as the cascading opportunities resulting from adding two to four units to each of Veritas’ approximately 200 buildings.  Audience members added that other homebuilders are working on adding ADUs to new subdivision tracts.

Tim Hsu from the California Housing Finance Agency addressed one of the most notable remaining challenges to ADU construction – financing – and the agency’s work in modifying lending requirements to facilitate ADUs.  Again, audience members weighed in with questions and comments about related financing challenges, including issues with ADU appraisals and comps.

Carol Berg, the Housing and Community Development Manager for the City of Santa Cruz, shared a compelling Bay Area municipal success story.  She conveyed the factors the turned the political tide in Santa Cruz to adopt a favorable ADU ordinance as well as the success of Santa Cruz’s Technical Assistance Program.

The lively audience participation further touched on topics as diverse as the intersection of ADU construction and cities’ Regional Housing Needs Assessment obligations, a debate about state legislation mandates versus the need for local political leeway and ADU philanthropy efforts.  We all came away from the event with an advanced understanding of ADU implementation efforts and ideas for marching forward!

The ADU report was also the subject of a TV2 news report, among others.

Write-up by Chelsea Maclean from Holland and Knight.