ULI San Francisco Blog

Small Homes, Big Benefit: Lessons from Three West Coast Cities

Photo courtesy of Karen Chapple

As housing costs keep rising and the demand for new housing continues to outpace supply, accessory dwelling units (ADUs) are an innovative way to create more homes, with fewer resources. A new study from researchers at the University of California, Berkeley, and the University of Texas at Austin explores how three cities have helped to stimulate production of ADUs to help ease housing pressures in their high-cost regions.

“How did Portland go from seeing two ADUs constructed per month in 2009 to one per day today?  What is it about Seattle’s and Vancouver’s policies that have made ADUs so much more prevalent in those places compared to the rest of North America? We wanted to learn from these cities to encourage this innovation nationwide,” says lead researcher Karen Chapple, a professor of city and regional planning at UC Berkeley, who has an ADU in her own Berkeley backyard.

The study, Jumpstarting the Market for Accessory Dwelling Units: Lessons Learned from Portland, Seattle and Vancouver, is sponsored by the San Francisco chapter of the Urban Land Institute. It explores the barriers faced by homeowners and the best practices coming out of the public sector to help overcome these challenges and realize the benefits of ADUs.

“ADUs have myriad benefits,” says Michelle Malanca Frey, executive director of the Urban Land Institute San Francisco. “Renters have access to a more affordable source of housing, homeowners have an additional source of income and policymakers can help increase the supply of housing in their region at a relatively low cost — all with minimal impacts on neighborhoods.”

Researchers found that to realize the benefits of ADUs at scale, a few elements are key, including:

  • Education to spread the idea of accessory dwelling units and familiarize homeowners with the process of building them;
  • Local and state regulatory and zoning reforms that reduce the barriers for homeowners who want to build; and
  • Financing and lending tools to help homeowners embark on an ADU project.

In California, legislation sponsored by state Sen. Bob Wieckowski (D-Fremont) and Assembly member Richard Bloom (D-Santa Monica) would ease the barriers for homeowners who are interested in creating an accessory dwelling unit on their property.

For a state at the epicenter of the affordability crisis, and for others facing similar challenges, this could have a major impact: Researchers report that 60 percent of the ADUs studied are being used for permanent housing, and 58 percent of ADU tenants are paying below market rent. Without public subsidy, ADUs can provide a source of housing that is affordable to a range of incomes.

“As our public dollars are increasingly squeezed, we need to find ways to stimulate affordability in the broader market, and especially in single-family neighborhoods, which remain our predominant neighborhood type” says Carol Galante, faculty director of the Terner Center for Housing Innovation and a partner in the research effort.

“Many of these communities have the same number of homes, but house far fewer people than 30 or 40 years ago,” Galante says. ”ADUs can provide an affordable source of housing for people in neighborhoods already set up to accommodate them.”

As a low-cost tool in the housing affordability toolbox, accessory dwelling units have significant potential to add new housing to markets that urgently need it. Lessons from cities that have been able to jumpstart their ADU market can help other places facing affordability challenges bring this innovation to scale.

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