'Granny flats' – a solution to housing crunch – come under fire

Ira Belgrade never intended to turn his detached rec room into a rental unit.

But in 2009 his wife died, and the business they owned together in Los Angeles fell apart. So Mr. Belgrade converted the structure and rented it out to help provide for himself and his young son.

[Editor's note: The first two paragraphs of this story were corrected to make clear what structure was converted for rental purposes.]

All was well until about two years ago, he says, when city inspectors determined that the unit violated city ordinance because it was too close to the property line. Belgrade would have to apply for a variance, or an exemption from the city, which could take months and run into thousands of dollars – without any guarantee of approval.

After the money he had invested in renovations and his efforts to ensure the unit’s style was in keeping with the rest of the neighborhood, Belgrade says he feels cheated.

“Regulation needs to come with safety. Is it a fire trap? Is someone going to die in there? Not, ‘Oh, it’s not 15 feet from the back [of the property],’ ” he says. “Who is this hurting?”

Secondary homes, or "granny flats," have become a rallying cry in an ongoing battle over affordable housing. In the most expensive US cities, they're cheaper to build and less disruptive than major developments. But they're running into resistance from residents who want to preserve the character of their communities. 

Belgrade’s predicament is also indicative of a broader cultural clash, researchers and observers say. Longstanding notions of the ideal American home, and policies meant to preserve it, are colliding with a reality of soaring housing costs, stagnant incomes, and a growing desire to live close to walkable city centers. The result is a struggle that cuts to the heart of the American Dream as it was imagined by the generations following World War II.

“From about post-World War II to the ‘70s, cities became defined by single-family housing,” especially in the West, says Vinit Mukhija, a professor and vice chair of urban planning at the University of California, Los Angeles. “But so many factors seem to have changed [since then]. Land is much more expensive, transportation costs are much more expensive, family structure has changed.”

“Most important is the cost of housing is so high now,” he adds. “I think we may be reaching a point where [our perspective around housing] has to be rethought.”

Popular in Portland

Kol Peterson would agree. A resident of Portland, Ore., Mr. Peterson owns a company called Accessory Dwelling Strategies, which seeks to educate the public about the benefits of building a granny flat, or accessory dwelling unit.

He gives talks about designing and constructing ADUs and consults with realtors about the best ways to market secondary homes. He also runs a citywide ADU tour of Portland in an effort to prove that secondary homes can enhance neighborhoods rather than spoil them while allowing owners to make a profit.

“It’s a way for middle-income homeowners to create a passive income stream and flexibility for themselves,” Peterson says. “It’s a compelling form of development opportunity that is entirely market-driven … [but] not done by huge, large scale, well-heeled developers. It’s kind of a grass-roots form of housing movement.”

And it's growing, he says. In 2015, Portland saw three times the number of applications for ADU permits than in 2009, when it first waived system development fees and reduced the cost of permits by up to $15,000, OregonLive reports. Portland now approves slightly more than 100 ADUs annually, more than almost any other city in the US, Peterson says.

Los Angeles, on the other hand, has approved fewer than 400 since 2010 – and now faces a moratorium on construction after a Los Angeles County Superior Court judge ruled that the city violated its own ordinance by adopting the state’s looser regulations around secondary homes.

Still, the estimated 50,000 unpermitted secondary units already existing in the city suggests that homeowners want to build in their backyards, says Professor Mukhija at UCLA.

“Their presence indicates that there is a demand for ADUs,” he says. “But it’s so difficult and expensive, and at times impossible, to get permits.” Making the rules less complicated could encourage residents to build more, and perhaps help ease the pressure on large developers struggling to construct affordable housing, he notes.

More than spurring discourse around regulations, however, the growing interest in secondary housing points to a gradual change in the way Americans view homes, neighborhoods, and cities, Mukhija and others say.

“There are huge changes going on about how we view cities,” says Dan Bertolet, a senior researcher at the Sightline Institute, a nonprofit research firm in Seattle that specializes in sustainable urban development.

“When I started working in this field,” he says, “most of us were thinking of cities and sprawl in terms of environmental terms. Now, we have a lot of people who want to live in cities, and we don’t have enough space for them.”

Return to roots?

Today’s shifting views around housing might also be seen as a kind of return to the perspectives of the late 19th and early 20th century, when jobs born of the Industrial Revolution drew Americans to cities. At the time, many homes housed more than one family.

“Secondary units are part of the American vernacular,” says Karen Chapple, a professor of city and regional planning at the University of California, Berkeley. “Granny flats were very common around US neighborhoods around the turn of the century. They are part of our history, it’s in the blood of our urban form.”

“That all changed with post-World War II development, where we were building single-family homes that … [housed] two parents and 2.2 children,” she says.

Migration to the suburbs propelled the modern version of the American Dream, which is deeply entwined with the idea of the single-family home and the white picket fence, Professor Chapple and others say. Changes in the nation’s socioeconomic environment in the decades that followed did little to mar the image in popular imagination.

“A lot of people equate the American Dream with living in the single-family house,” Mukhija says, partly because over the years, realtors, advertisers, and others have spent time and money selling the dream in that form.

“We have spent a lot of effort in creating this model,” he adds. “It’s such a strong idea … that I think to change will require an equal amount of effort.”

Some say the time to begin exerting that effort has come – if not already overdue.

In many coastal cities, the housing supply is so short that even continuous building starting today would not meet demand for years to come. To illustrate: Between 1980 and 2010, Los Angeles County needed to build 55,000 units to cover the growing demand – but constructed less than 20,000, according to a report from California's Legislative Analyst’s Office. San Francisco County needed 15,000 units in the same period, but built less than 5,000.

The majority of what was constructed in both cities were single-family homes and luxury apartments.

“We are hemming ourselves in with just two building types,” Chapple says.

Local and state leaders are starting to explore different housing types, such as ADUs. Some residents – especially young people – have also warmed to the idea that living in the city may mean residing in nontraditional housing, whether it’s a miniature home, a “co-living” space, or a converted garage.

But resistance remains from those who maintain that change should not come at the expense of the communities that drew new populations to cities in the first place. These groups raise concerns around crowding, traffic, noise, and privacy. The rise of the short-term rental – largely in the form of home-sharing sites such as AirBnB – has only complicated matters, as residents worry about the model’s impact on local housing markets and quality of life.

“Culturally, all these challenge our perceptions around what cities should be,” Mr. Bertolet at Sightline says. “We’re pushing up against the limits [of the single-family model].”

Unknown impact

Back in Los Angeles, the challenge has taken the form of a heated battle over the right to build and rent out backyard homes.

Belgrade, whose meticulously designed granny flat in the La Brea-Hancock Park area has been deemed technically illegal by the city, has become a vocal advocate for what he says are common-sense practices around secondary homes.

“I took such care to keep my neighbors happy,” he says, flipping hotdog buns for his sons’ dinners on his backyard grill. To his right, the two-story accessory dwelling rises above the 1920s-era Spanish bungalow that serves as the main house.

Belgrade put in thousands of dollars to make the the place livable – inexpensive by most secondary housing standards which, depending on the unit’s size and location, can run into the hundreds of thousands. But Belgrade says the turmoil after his wife’s passing sapped him of funds and left him in danger of losing his current home, which he bought more than 20 years ago.

Renting out the back cottage “totally saved me,” he says.

Belgrade would be the first to admit that his ADU would not fall under the auspices of “affordable housing.” But he says he charges far below market rate. (He declined to state the exact figure. A quick search shows that two-bedroom rentals in the immediate area run between $2,800 to more than $4,000 a month.)

“People can’t afford to live in this neighborhood anymore,” he says. “This gives people more options.”  

Now that he’s stuck in regulatory limbo, Belgrade has fully taken up the cause for secondary housing, writing letters to city hall, going door-to-door, and starting online petitions. His goal is to get the city to support state laws that would lower barriers to building accessory dwellings throughout California. In the meantime, he aims to convince local leaders to repeal the 1985 city ordinance at the center of the moratorium against building secondary homes in Los Angeles.

On the opposite end of the spectrum stands Carlyle Hall, the attorney whose lawsuit against his neighbor’s ADU led to the Superior Court decision that brought the accessory dwelling issue in Los Angeles to light.

Mr. Hall, a retired environmental and public interest lawyer, is urging the city to maintain the existing ordinance until sufficient research has been done on the potential effects these types of housing units might have on communities. He denies being antidevelopment, saying he only wants to ensure that both policymakers and the public understand what impact a potential surge in ADUs might have on Los Angeles neighborhoods.

“Normally we strike a balance after public outreach to get input from various communities,” he says. “It takes a certain amount of study. What are other cities doing? What are our options, what could we be doing? Should we have more or less regulation? What are the pros and cons of both?”

Meanwhile, Hall says, there’s no reason not to maintain a more restrictive policy – especially one that’s been in the books for decades.

For Belgrade, however, it’s a matter of principle. He acknowledges the role that secondary houses have in helping alleviate the current housing crunch. But, he says, it’s also about how neighborhoods – and Americans in general – are responding to changing times.

“It’s so insane that there are these people out there who think that having a second unit in someone’s backyard is going to destroy their neighborhood,” he says. “It’s just not true.”

“What is anyone afraid of?” he asks. “Am I running a drug den? No. I’m keeping my family together in the house that I’ve lived in for 20 years. That’s what I’m doing.”