City officials: ADUs are a part of solving housing deficit

Apr. 7—Standing no taller than 16 feet, a throng of tiny titans have amassed across the state, including Bakersfield, and they seek your granny, a new neighbor or your kid after they graduate.

They're called accessory dwelling units — sometimes referenced as granny flats — and have increasingly dotted the backyards and garages in major California cities like Los Angeles and San Francisco, as a counter to the state's continued housing deficit.

The idea behind ADUs — detached housing — isn't new. Family members have lived in a converted garage or backyard dwelling long beforehand. But proponents believe these homes offer a cheaper alternative for permanent housing, for people who normally can't afford it.

"Originally," said Christopher Boyle, director of Bakersfield's development services. "The idea behind (ADUs) was that Mom and Dad wanted to come back home — maybe they're getting older and don't want to go into an elder care facility, and you couldn't just build onto your existing property."

In 2019, the state approved — and extended years later — the California Housing Crisis Act, which outlined a faster permit guide to approving ADUs while offering small grants to offset some permit costs.

Per state guidelines, these homes are eligible for a permit in any residential or mixed-use zone, so long as they're no more than 800 square feet and 16 feet high, and at least 4 feet from the property line. However, it's generally up to a city to decide where and how they embrace ADUs.

In 2021, these homes accounted for about 15 percent of the state's new housing. As the statewide housing deficit continues, cities are looking for different ways to add homes fast.

They're included in every unit at the newly constructed Powder Ridge community, an 84-lot subdivision in northwest Bakersfield.

"That's 84 accessory dwelling units in total right there," Boyle said, adding that his staff has at least another 50 ADUs currently in site review process. "I think we are building a lot of ADUs compared to other California cities."

Most of the ADUs being constructed at this time, Boyle said, are being built on new tracts, as an accessory to new single-family homes. They hope to encourage more people to build on existing property.

That said, they're not that cheap. ADUs include permanent provisions "for living, sleeping, eating, cooking, and sanitation" per state housing law.

A 2020 survey by researchers at UC Berkeley found the median price was $150,000, or about $250 per square foot. Boyle said today's prices, with inflation, can jump to $200,000.

Even with $40,000 provided by the state, this price can establish a barrier many residents can't hurdle.

"Except when you're converting a garage, ADUs cost in the six digits," Boyle said. "They're expensive to build and it takes a long time before there's a return on that investment."

The idea is that, through renting it, the facade will pay for itself over time, if the upfront costs are held under tight control. Some models can also take three to four years to start paying off, from concept to occupancy.

At their March 28 Housing and Homelessness meeting, city staff presented an incentive program, whereby they can reduce or waive development fees for owners who rent ADUs for five years at an affordable rate.

"Impact fees are often due at the issuance of a permit," said Jennifer Byers, the city's assistant economic development director. "But then you go through construction costs and depending on the size of the project, you aren't actually generating much money."

Funding would be derived from Permanent Local Housing, a fund established by the Building Homes and Jobs Act in 2017 that establishes a $75 fee on every real estate transaction in the state.

"If you refinance your home, that's a real estate transaction," Byers said. "And you'll be charged $75."

"We're now seeing an ongoing funding source the city can use for housing," Byers added.

They also want to partner with local lenders to create a no-interest, five-year loan program for people who, with low-income and regardless of equity or credit, often have difficulty getting approval for a loan.

"That might bring more people into the market, if they can count their relative income from the ADU in trying to secure a home loan," Boyle said.

Officials corralled all this new information onto a new website — offered in English, Spanish and Punjabi — with a budget calculator, a lineup of preapproved ADU structures and a guidebook to boil down all the fancy, bureaucratic terminology. They expect to have it online by the end of the month.

"Something that someone can put in their back pocket and know how to get an ADU," Boyle said.

Going forward, staff said they will need to undergo further discussion before seeking council approval on implementing any incentive program, and whether to start allowing short-term rental of ADUs.

But the idea is that eventually, average people enter the market, and rent their ADU, to guests, their granny or their kid-turned-graduate.