Are ADUs the Answer to San Francisco’s Affordable Housing Crisis?

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While the Bay Area is often referred to as the heart of unaffordability, San Francisco has been working to provide more cost-effective housing by making the planning, permitting and building processes for accessory dwelling units easier.

The unwavering affordable housing crisis across the country is pushing homeowners and local authorities to identify new strategies to provide more cost-effective housing to those in need. Accessory dwelling units (ADUs)— colloquially known as granny flats, in-law units, laneway houses, or secondary dwelling units—are emerging as one popular method, especially on the West coast. According to accessorydwellings.com, an ADU is a second small dwelling  on the same grounds, or attached to a regular house, such as an apartment over the garage, a tiny construction in the backyard or a basement apartment.

California passed several reforms in 2016 and 2017 to begin expanding ADUs statewide. Among other things, the changes addressed parking requirements, design, fees and the permitting process. The immediate effect was an increase in ADU permit applications in many Californian cities. According to a Terner Center for Housing Innovation report released at the end of last year, 1,970 Los Angeles residents filed ADU applications in 2017, compared with only 90 in 2015.

The nucleus of unaffordability

San Francisco, a metro where the tech boom has priced out not only low-income residents, but also middle-class workers, faces an unprecedented affordable housing crisis. In the past few years, the city has begun to rethink its zoning and other regulations in order to allow the development of more ADUs or to encourage residents that have already built such dwellings to legalize them. Adding income value to the property and providing an additional unit of housing are among the main benefits of having an ADU.

According to data from the San Francisco Planning Department, 702 owners filed permits to increase density on their property, with 167 permits issued and approved to-date since 2014. Moreover, 350 permits were issued and approved for dwelling unit legalization. Of those, work has been completed in 167 cases. Roughly 75 percent of permit applications were filed since the enactment of the city’s Accessory Dwelling Unit and Unit Legalization Program in September 2016. The city of San Francisco was recently recognized by the American Planning Association for the program’s success, winning the Silver 2018 National Planning Achievement Award for a Best Practice. As of March 2018, 1,200 new ADUs were in housing pipeline, compared to only 200 units added per year before 2014.

A complex process

One firm contributing to the spread of ADU projects is Design Draw Build,  a Berkeley-based company that develops residential and commercial projects in the Bay Area. The firm is currently working on 10 ADU projects in different Californian cities. “(ADUs) are most appropriate in the semi-urban—areas between urban and suburbs—and where neighborhoods tend to be the most nimby. Our San Francisco ADUs have been extremely difficult because they’re standalone, in the front yard and in the Castro, with tough neighbors and other barriers to entry. It may take 1.5 years before we get a building permit on it,” Principal Tyler Kobick told Multi-Housing News.

As of April 2018, the city of San Francisco has begun implementing several process improvements to make planning, permitting and building easier.

“We’re also looking at several more processes in further detail over the coming months, including: accepting online submittals and payments for some applications; developing enhanced electronic document review capabilities; consolidating and modernizing various neighborhood notification procedures; (and) launching application review for ADUs by appointment with over-the-counter review for much faster processing,” San Francisco Planning Department Spokeswoman Gina Simi told Multi-Housing News.

In order to increase density in existing neighborhoods, the metro currently has two programs for adding accessory dwelling units to existing residential buildings. One program permits one ADU in an existing Single-Family Dwelling (SFD) and the other allows between one and an unlimited number of additional accessory dwelling units to be added to an existing SFD or multi-unit building.

“The underlying foundation of San Francisco’s ADU and dwelling unit legalization programs is that some of the most frequent zoning restrictions to adding additional housing units are waived, notably density and parking,” Simi added.

Local density bonus program

ADUs are not the only way authorities are trying to ease the affordable housing crisis and encourage developers to include more affordable housing units in their projects. HOME-SF is an optional program for developers constructing mixed-income projects in certain areas of San Francisco. Under this program, 30 percent of the units in a new housing project must be affordable to low-, middle- and moderate-income families. In return, density bonuses and zoning modifications are provided. The maximum bonus for a project is an additional two stories and relief from density controls.

Other cities taking initiative to tackle affordable housing issues have included Vancouver, which passed an ordinance in 2009 legalizing ADUs, making the Canadian city an ADU pioneer. The Portland, Ore., city council also recently changed its code to make it easier to build these types of small units and voted unanimously in 2016 to extend a popular fee waiver for ADUs, which saves ADU developers between $12,000 and $20,000, according to the Portland Business Journal.

Video courtesy of San Francisco Planning

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