Solving Our Housing Crisis One ADU at a Time

By helping average homeowners become providers of affordable housing in their own backyards, we can provide a new and much-needed approach to our local housing challenges

Los Angeles is facing an unprecedented affordable housing crisis.

High rents are forcing many low-income residents to move out of the city in order to avoid succumbing to homelessness. According to homelessness counts between 2010 and 2017, the number of homeless people across Los Angeles County has gone up 42 percent from 38,700 to more than 55,000.

It is the working poor that account for this increase, not the chronically homeless.

Wages have not increased sufficiently to accommodate the rising cost of housing. Since 2000, the income of renters has decreased by 3 percent while rents have increased by 32 percent. Today, 58 percent of renters in LA are cost-burdened, meaning that more than 30 percent of their income goes toward housing. Existing support systems, designed to guarantee housing for low-income families (such as Section 8 vouchers), are unable to meet the demand. Currently, there are 300,000 people on the Section 8 waiting list and only 2,400 vouchers become available each year. Furthermore, tenants that are lucky enough to get one of these coveted vouchers are often unable to find landlords that will accept them. The Housing Authority of the City of LA reports that 40 percent of Section 8 vouchers are forfeited due to a lack of available housing.

The supply of affordable housing is at an all time low. This can be attributed to many factors including the high cost and slow pace of development, resistance from local residents that oppose density, and the unwillingness of many landlords to rent to low-income tenants due to the prevalence of racist and classist stigmas. For all these reasons, we need to start thinking beyond the traditional model of building large-scale affordable housing developments at $500,000 per unit.

Accessory Dwelling Units (ADUs), also known as backyard homes, can be a source of affordable housing that is much cheaper and faster to build. As by-right projects that can be designed to fit within the context and scale of their neighborhood, ADUs have incredible potential to provide much needed affordable housing, while also offering low-moderate income homeowners an opportunity to build greater equity, maintain housing stability, and earn additional income as landlords.

The housing crisis is not only affecting renters. Low to moderate income homeowners are at risk of displacement by means of gentrification. Investors are eager to offer cash for homes that will then be quickly renovated and resold for much more money to wealthier residents. These offers can seem attractive to older homeowners on a fixed income. However, in the long run, low-income homeowners selling their property for short term gains can have many devastating implications.

Homeownership is one of the primary ways to accumulate and pass down wealth in the United States. The fact that people of color have historically and systematically been denied access to homeownership is at the root of the persistent and growing economic inequality. Therefore it is critical for homeowners of color to not only be able to hold onto their property, but also have opportunities to make home improvements in order to build equity that can be passed onto future generations.

Given LA has more than 500,000 single family lots, Section 8 tenants need more available units, and low-income homeowners need opportunities to preserve their homes, we believe there is a solution that connects these opportunities. By helping average homeowners become providers of affordable housing, we can provide a new and much-needed approach to our local housing challenges.

LA-Más has recently launched a new affordable housing pilot program called the Backyard Homes Project. We assembled a team of established non-profit organizations that collectively provide a “one-stop-shop” for ADU development by offering participating homeowners support with financing, designing, permitting, constructing, and leasing a new ADU in the City of LA. In exchange for this support, homeowners are required to rent the ADU to a Section 8 voucher holder for a minimum of five years.

In its first year, this pilot program will help 10 to 12 homeowners in Los Angeles build a backyard home on their property by 2020. LA-Más serves as both program manager and architects. Our team has designed a range of housing models from 290 to 800 square feet (including garage conversions, studios, 1-bedrooms, and 2-bedrooms) in order to create contextual and accessible housing that achieves design excellence. Restore Neighborhoods Los Angeles will build the ADU, committing to a price up front. For those who need access to financing, Genesis LA and Self-Help Federal Credit Union will be offering a new mortgage product. Homeowners will also be supported as new landlords and be matched with tenants that they can select directly.

 

Ultimately, we hope this program can be scaled up and adopted by many of the 88 cities within the County of LA and beyond, so many more average homeowners will become providers of affordable housing, all while earning income and building equity. This is a win-win for both homeowner and renter.