City leaders vote to expand ‘granny flats’ for affordability, but research indicates it could backfire

Austin

AUSTIN (KXAN) — Austin City Council members took a step Thursday to loosen the restrictions on Accessory Dwelling Units (ADUs) and make them more affordable.

According to city documents, current regulations for attached or internal ADUs require at least one of the residents to be at least 60 years old or physically disabled. It also states if a space inside a home is converted into an ADU, the ADU can’t include a converted garage or a new entrance that you can see from the street.

Monica Brickley is building a detached ADU for her mom, located behind her new home.

“When you’re dealing with an aging parent, they’re typically looking for a first floor situation, and those are not easy to find,” Brickley said.

City council members unanimously passed a resolution Thursday that directs the city manager to come up with alternative ADU definitions by February that would remove those age, ability, occupation and family status requirements.

Supporters, including Brickley, said expanding ADUs is a good way to expand affordable housing stock in a quick way, and it would also provide supplemental income for the owners of primary homes on those properties.

Monica Brickley said she looked at dozens of homes for a ground floor ADU for her mother (pictured), before deciding to build one from scratch. (Photo: Monica Brickley)
Monica Brickley said she looked at dozens of homes for a ground floor ADU for her mother (pictured), before deciding to build one from scratch. (Photo: Monica Brickley)

“For people that have lived here a long time… it really is becoming unsustainable for them,” Brickley said. “These types of scenarios allow people to maybe stay in a place where they may otherwise not be able to stay.”

A recent University of Texas at Austin study analyzed 30 years of housing data in Austin and found ADUs are generally much lower in cost than primary homes, close to or just under the median price of homes in the city.

But there can be a downside.

“We basically found ADU policy has a mixed effect on affordability in the city of Austin,” said Junfeng Jiao, director of UT’s Urban Information Lab and one of the lead researchers of the study.

He said there are two ways to build an ADU: by demolishing an existing home and building two units on the same lot or keeping the current home and building an ADU behind it or attached to it.

The former method generally results in that ADU costing more than it would using the latter method.

“We found that many properties utilizing the City’s ADU ordinances experience significant property value increases due to the use of the ADUs in demolition and property redevelopment schemes. ADUs built behind existing homes, however, preserve the existing home’s value while also providing an affordable new unit.”

Austin Housing Analysis, University of Texas at Austin, 2021

“ADUs built behind existing homes generally cost the least of the group with a median equivalent value in 2021 of about $338,000 compared to $400,000 city-wide for all single-family homes,” the study read.

It notes most ADUs, however, aren’t sold separately but are instead rented out or used by the homeowners.

The report said current city policy could be tweaked to maximize building ADUs with existing homes, rather than as part of demolition and redevelopment to increase affordability.

The city’s resolution addresses that. It asks the city manager to come up with a new policy by April that would increase incentives for income-restricted, affordable ADUs.

“For some of us, trying to figure out how you preserve the houses, so that when you allow the ADUs, you don’t incentivize demolition at the same time, is really a key problem that we need to solve before we can consider adding more density,” said council member Alison Alter.

The resolution also asks the city manager to consider options for different sized units based on lot size, possible rules that would limit using ADUs allowed in new areas as short-term rentals and expediting permits, fee waivers and other incentives for people who build income-restricted ADUs.

UT’s housing analysis of Austin also indicates making an ADU too big can make the unit too expensive.

“Housing policy that limits the size of units in redevelopments may help to preserve affordable housing,” it read.

Jiao said overall, ADUs help add density to property, which he said is important for affordability for not only the potential ADU resident, but the primary homeowner, too, by offering a supplemental source of income.

Brickley said it’s a possibility her family has already thought about to help alleviate their property tax burden and allow them to be able to stay in their neighborhood, long-term.

“[My mom] can come stay in our main house for a weekend, and we could, you know, rent that out,” she said.

The resolution asks the city manager to identify the staff time and resources it would take to create a list of pre-approved building plans for ADUs, which Jiao said would help more people build them.

“That will significantly reduce the development cost, because you don’t need to hire [architects] or others to do that design,” he explained. “Also, the city probably already preapproved the layout, so that also saves the zoning and regulation costs for both sides.”

The city manager will have to speak with neighborhood groups where ADUs are not currently allowed when creating code amendments that would expand ADUs to those areas.

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