Flurry of new laws will hit California on Jan. 1, 2003

Property owners who want to build so-called "granny flats" will have an easier time constructing the backyard and above-garage units, no matter what the neighbors think, if they meet all of the local government standards.

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Multiple Granny Flat Articles Below...

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Restrictions loosened on second units
by C.A. Gilman
© 2002 The Ojai Valley News

Gov. Gray Davis recently signed a bill that mandates that second units (aka granny flats) be classified ministerial rather than discretionary as of July 1, 2003. This law, which goes into effect on Jan. 1, also requires that local governments provide developers of low-income housing with incentives for their projects as long as they meet specified requirements.

Ojai now treats all second units as discretionary in order to limit their development. The new law takes that choice away from local government. City Manager Dan Singer said, "This takes away local discretion for approving or not approving granny flats which might even impact public notification and offering a public hearing so that neighbors can be involved."

According to Matthew Sewell, the legislation on affordable housing means that a low-income housing project that meets state guidelines must be allowed by the local government regardless of local policies. It also provides that developers can sue the local government if state-qualified projects are denied due to local considerations.

Bruce Smith, who manages the General Plan section for the city of Ventura's Planning Department, concurs with Sewall. Smith said, "The intent of the legislation is to require local government to be more responsible in offering affordable housing. However, the conundrum is that the law doesn't override local land use legislation. It is also very expensive to sue a city, and developers fear tainting their good relationships with city councils and planning commissions."

Ivor Benci-Woodard, president of the Citizens to Preserve the Ojai, said, "If the state requirements for affordable housing are such that they don't allow for environmental review of the community, then there will be collisions with the California Environmental Quality Act."

The complexity is further increased because of the traffic problems that hinge on what is done on Highway 33, which is a state road. The county general plan requires that Highway 33 be widened to four lanes before any new projects are built. Smith said, "Right now no housing development is allowed except for single family dwellings on pre-existing lots because of the level of service on highway 33. The new legislation will mean that second dwelling units will not be affected by an environmental impact report. The county has also asked us to look at exempting affordable housing from the current LOS to enable affordable housing to be built. Right now you have a catch 22: on the one hand, you have the need for affordable housing, and not building housing triples the occupancy of many homes, which increases traffic, etc."

As for how this will impact Ojai, Singer said, " It's not clear yet which of these legislations will affect us. We will be spending more time with counsel before it goes into effect on Jan. 1."

 

Appeal Court Strikes Down City's Granny Flat Law

By Jorge Casuso
Copyright ©2000 surfsantamonica.com.

In a unanimous ruling, the California Court of Appeal last week shot down a Santa Monica ordinance that restricts who can live in second units -- or "granny flats" -- in single family residential zones, saying it violates both privacy and equal protection rights.

The ordinance -- which restricts occupancy to dependents and caretakers -- was approved by the City Council at the urging of residents, despite legal warnings from attorneys as well as City staff.

"The right to privacy includes the right to be left alone in our homes," Judge J. Bolland wrote in an unpublished decision. "Unless we are to say that a second unit is not a part of one's home, personal decisions about who may live in a second unit are no less entitled to privacy protections than decisions about who may live together in the main residence."

"The Court of Appeal has sent a loud message," said attorney James Isaacs, who represented the plaintiffs. "Santa Monica has no business regulating the types of people allowed to live in various types of housing. With very limited exceptions, people are free to choose who they live with."

According to City Attorney Marsha Moutrie, the council is now faced with three options:

bullet

It can ban second units in residential districts.

bulletIt can allow the units without restrictions.
bulletIt can appeal the decision to the California Supreme Court.

"This is an opportunity to revisit the policy," Moutrie said. "Whether that exemption was a privacy violation or not, that issue was noted when the council adopted the law. They knew there was some risk, but they thought it was better to give homeowners an option than an outright ban."

When the law was first passed in 1996, as well as when a similar law was passed to replace it in 1998 and extended with a 5 to 2 vote the following year, the council heard from dozens of homeowners -- most of them from North of Montana -- who opposed second units.

They argued that the units -- which provide complete independent living facilities for one or more persons -- would result in congestion, air pollution, noise, traffic and on-street parking.

In the written decision, Judge Bolland questions both the City's failure to heed the legal warnings and its decision to base policy on popular sentiment.

"It is questionable whether the City's findings, based not on population or traffic or any other kind of studies, but solely on opinions expressed by residents of R-1 districts, could constitute the required statutory findings," Judge Bolland wrote.

Isaacs agrees: "Xenophobic fears that a comparatively modest number of second units will destroy our City are simply unwarranted," Isaacs said after the ruling. "Strategies to placate political constituencies need to be modified and put in the context of what has happened on a Constitutional level."

In the lawsuit, brought by the Coalition Advocating Legal Housing Options and former planning commissioner Lou Moench, the plaintiffs challenged the constitutionality of the zoning ordinance, arguing that the restrictions violated the right of privacy and the equal protection clause in the state Constitution.

The City argued that the restriction helped preserve the "character and integrity of single family neighborhoods" and protected against an undue concentration of people and traffic. The court disagreed.

"It is difficult to see," the court wrote, "how the status of the occupier of a second unit -- an unrelated renter versus a dependent or caregiver who is allowed to pay rent -- bears any relationship to either one."

In the ruling, the court noted that the city's fears of an "undue concentration" of second units were unfounded and quoted the City's own Housing Element Update for 1998-2003. The document, which sets the City's housing policy for five years, noted that even if the second-unit ordinance were eased, "it is unlikely that second units would have a significant impact on the new housing stock during the planning period."

The court also disagreed with the City's argument that, as a charter city, it is not required to comply with a 1982 state statute on second units which encourages the creation of affordable housing. The statute requires local agencies to permit second units that meet state mandated standards unless it either bans them in single family or multi-family zones or passes its own ordinance allowing units with standards stricter than the state's.

The statute was amended in 1994, after the state found that local governments were either "embracing second units as a source of affordable housing, or by discouraging their creation through complicated and expensive application procedures or other means," according to last week's written decision.

The amended state law declared the Legislature's intent that "any second-unit ordinances adopted by local agencies have the effect of providing for second units.... and are not so arbitrary, excessive or burdensome so as to unreasonably restrict the ability of homeowners to create second units in zones in which they are authorized by local ordinance."

When the city passed its first ordinance in 1996, in response to an application for a second unit, staff said that it did not believe the findings for an all-out ban could be made. It also included a copy of a 1990 state housing document "indicating that a local ordinance limiting occupancy to persons related to the owner would be susceptible to legal challenge," according to the Appeal Court decision.

The council first accepted the staff recommendation and directed them to prepare an ordinance regulating second units. But after hearing testimony from some two dozen members of the public opposing second units, the council rejected staff recommendation.

Instead, the council directed staff to prepare an ordinance that would ban rental units in single family neighborhoods with the appropriate findings. The council also asked staff whether it should include limited hardship exemptions.

On October 8, the council adopted an ordinance that banned second units unless they were occupied by a relative or caretaker if the homeowner could demonstrate substantial hardship. The ordinance was extended 18 months in November and a new interim ordinance was passed with a 4 to 3 vote in June 1998 dropping the need to show hardship.

After the Planning Commission recommended that the council revisit the interim ordinance before it expired and control the units by regulating density and concentration, the council was presented with two options: enact the existing standards permanently, or extend the interim ordinance and explore the Planning Commission recommendations. Again, heeding the cry of residents, the council adopted the permanent ordinance by a 5 to 2 vote.

(Voting for the ordinance were Councilmembers Kevin McKeown, Ken Genser, Robert Holbrook, Richard Bloom and Pam O'Connor. Councilmembers Michael Feinstein and Paul Rosenstein cast the dissenting votes.)

The legal warnings the council chose not to follow were nothing new.

In 1988, the court notes that then City Attorney Robert Myers gave the council similar advice, saying that the findings for a ban on second units were "legally indefensible" and that such an ordinance was unlawful.

After reading last week's ruling, Myers questioned the council's decision to approve the restrictions.

"The City's multi-decades fight against granny flats is inconsistent with a progressive commitment to affordable housing," Myers told The Lookout.

 

 

Instead of Scattering, Families
Are Living in the Same Town
Wall Street Journal
By June Fletcher, Staff Reporter of The Wall Street Journal

December 20, 2002

Ank Miranda has always thought of his family as close-knit, but lately, it's gotten a whole lot closer: He just helped his daughter buy a house near his own California home -- and then bought his mother-in-law one just down the street. It's got an apartment over the garage, so there'll be room for Mr. Miranda and his wife, just in case they decide to move in, too....

He's not alone. In a little-noticed but steadily growing trend, the American extended family is making a comeback. Increasingly, the people next store may well be your parents -- or kids. And the in-laws? They're moving into a casita in the backyard. Indeed, according to the most recent Census, the number of households with three generations under one roof has doubled in the past 20 years, while the number of young adults moving back home is up 6%. And developers aren't far behind the curve; they're building communities with playgrounds and bingo parlors, or going upscale with the old "granny flats," perfect for Mom and Dad to move into....

All the togetherness represents a major change in American family life. For almost a century and a half, the pattern has been for generations to move farther apart -- often for job-related reasons. (In the 1850s, one in five families contained three generations under one roof; now, only one in 25 live that way.)

During past economic downturns, families also pulled together, says CLAUDE FISCHER, A SOCIOLOGIST AT THE UNIVERSITY OF CALIFORNIA AT BERKELEY. The difference this time: It's baby boomers in their 40s and 50s doing the moving -- some to help take care of their parents, others looking ahead to retirement and moving from high-cost urban areas to cheaper ones. There's even been a kind of "rural rebound," with nonmetropolitan areas growing four times as fast in the last decades as they did during the '80s -- often because people are moving back to their hometowns....

 

PO Box 6515, Ithaca, NY 14851; 607-275-3087; 607-272-2685 (fax);
mail@newurbannews.com; www.newurbannews.com
From the December 2001 issue of New Urban News

Granny flats add flexibility and affordability
In several new urban communities, accessory dwelling units are strong sellers and offer benefits to both home owners and developers.

Accessory dwelling units (ADUs) appear under many aliases — granny flats, garage apartments, carriage houses, ancillary units — and they almost invariably show up on a checklist of what sets new urban communities apart from conventional subdivisions. They are by no means ubiquitous, but developers from diverse projects report that granny flats have become a popular amenity and an important selling point.

For some home owners, the most attractive aspect of ADUs is the potential for extra income from renting out the unit. Other home owners view the extra space as a flexible addition that can be used as a home office, as lodging for teenage children or elderly family members, or as a guest room with great privacy.

From a developer’s perspective, ADUs provide an extra tier of housing options — affordable units that can attract people from diverse age and income groups. Another benefit is safer and more lively alleys. With more “eyes on the street,” children and adults are more likely to use the alley for play and socialization.
Photo courtesy of Kiki Wallace

Examples of the great variety of accessory dwelling units being built in new urban communities. Top, a garage apartment in Prospect in Longmont, Colorado, and below, a granny flat attached to a live/work building in Fairview Village in Fairview, Oregon.

Photo courtesy of Holt & Haugh

Higher density
Moreover, “accessory units are an easy way to get more people in the same area and therefore support low vehicle miles traveled and all of the good environmental outcomes from density,” says developer Bob Chapman. “Accessory units offer density without making the street appear overbuilt.” In the infill project Trinity Heights, which Chapman is developing with architect Milton Grenfell, garage apartments have been added to 15 of the 24 single homes. Because Chapman and Grenfell want to encourage builders — who generally have no experience with granny flats — to construct ADUs, they offer a financial incentive. Instead of charging builders a per lot fee, the developers ask for 17 percent of the home sale price. For the ADU upgrade, however, builders are assessed only 6 percent of the sales revenue.

Regulations vary on ADUs, but there are a few ground rules that apply in most cases. The unit must be under the same ownership as the principal building, and there is typically a requirement for at least one extra off-street parking space. In most projects, the units are considered part of the main house and do not count toward the overall density. “We were very serious about this during permitting,” says Joel Embry, developer of Amelia Park in Fernandina Beach, Florida. “To count a garage apartment as a separate dwelling unit raises the public’s impression of the density in a way that it is not actually occurring.” In most projects, ADUs are restricted to specific lots or housing types, but these rules vary considerably.

ADUs are generally not counted toward maximum density requirements, and Chapman explains why. “The developer will always choose to make $20,000 on a house rather than $4,000 on a garage apartment. So you kill any chance of them being built if they are included.”

The Prospect example
One exception to the rule is Prospect, a project in Longmont, Colorado. According to developer Kiki Wallace, the city can collect extra impact fees by counting the garage apartments as independent dwellings. The typical impact fee for a home in Prospect is $18,000, and an ADU can put in another $6,000 in city coffers. “It works out just fine, because I have 570 density units for 80 acres and I am not going to use them all,” Wallace says.

While he had no problems getting permission to build ADUs, the city has struggled with keeping track of the extra units and therefore discourage other developers from including them in new projects. “It was painful for the city to begin with,” Wallace says, but it now has a system that prevents ADUs, and the impact fees, from falling through the cracks.

Despite high impact fees, ADUs have been very successful in Prospect — out of the approximately 110 homes completed, 40 have finished garage apartments. Builders usually include an unfinished shell above the garage, and charge about $50,000 for the average upgrade. Most units are in the 650 sq. ft. range, but one 950 sq. ft. unit has been built over a three-car garage.

With an average rent of $1,000, the income potential has become a major driver for the ADUs, Wallace says. “Most people have the idea that they are going to use it for a home office. About half build it for that reason, but I’d say that all of them end up renting it out.”

Some public agencies that seek to encourage granny flats, but do not wish to give an open-ended permission, have simply capped their construction at a certain percentage of home sites. Such restrictions are placed on Fairview Village, Highlands Garden Village, and Hometown Oswego.

Help with the mortgage
The benefit to the home owner can be substantial. In Courtside Village, a neighborhood in Santa Rosa, California, garage apartments are included with every single-family home located on an alley. To date, 50 units have been completed, and developer and designer Alan Cohen estimates that half the 600 sq. ft., one-bedroom apartments are rented out at a rate of $850 to $900. The alley homes currently sell for $390,000, including the ADU. Assuming a 15 percent down payment and a 30-year mortgage at 7 percent, Cohen calculates the monthly mortgage to be $2,205. A rental fee of $900 covers 41 percent of the mortgage. Cohen adds that conventional developers in the area have noticed the success of Courtside’s ADUs, and have begun to build them in other subdivisions.

However, the calculation of more interest might be whether the rental covers the extra cost of the upgrade. In Trinity Heights, the addition of a garage and an apartment costs from $37,000 to $43,000 (the price of the garage alone is about $15,000). Since the apartments rent out for $700/month, the home owner can recoup about double the mortgage on the ADU while paying for the two-car garage simultaneously — one reason for the units’ popularity. The upgrade cost in Trinity Heights is at the lower end, however. Typically, the price of the garage is included in the price of the primary structure, and upgrades range from $40,000 to $65,000. Nevertheless, rental fees typically cover the extra monthly mortgage for the ADU, and then some.

Developers are also seeing examples of home owners who move into the garage apartment and rent out the principal building. This strategy works as a holding pattern for people who plan to retire to Amelia Park, for example. The garage apartment becomes a weekend home, while the principal townhouse is a steady source of income until retirement.

Access and amenities
Developers and builders use a variety of strategies for access to ADUs. In Orenco Station (Hillsboro, Oregon) the choice of exterior stairs allows for the addition of a small porch in front of the first-floor entrance to the unit. Some entrances face the side yard of the home, while those at the end of blocks face the street. “These are better for a home office or a rental,” says Mike Mehaffy of PacTrust, the developer.

In Courtside Village, the stairs are internal, and the entrance faces the extra parking pad off the alley. This offers homeowners and tenants the greatest degree of privacy. An unusual approach is used in the largest units in Amelia Park, those built over attached, three-car garages. They come with a separate entrance within the garage, where one of the parking spaces is reserved for the tenant.

The basic amenities in most ADUs include a bedroom, a bath, and a small kitchen. Many developers offer a range of options, from loft units to more highly finished versions with separate rooms. Hometown Oswego in Illinois has a few 500 sq. ft. units that feature a kitchen, separate living rooms and bedrooms, and walk-in closets. “People love them, “ says developer Perry Bigelow, “it’s the most efficient use of space we offer.”

Municipal regulations are a potential hurdle for developers. Even though Trinity Heights is an infill project in the City of Durham, the city charter had to be amended to allow accessory units to be built. Even with this amendment, the local law stated that the units could not be within 15 feet of the property line, even at the back alley. This shifted the units toward the middle of the lot, reducing usable yard space. (Fortunately, Trinity Heights lots are 140 feet deep).

In Portland, on the other hand, the regional planning authority now allows ADUs in all area jurisdictions. “It is expected to help with the supply of affordable residences and to contribute to a more resource-efficient development pattern,” Mehaffy explains.

Tucked away behind homes, ADUs tend to fly under the radar, but in the projects where they have taken hold, developers are uniformly positive about their impact. “They are one of our real success stories,” says Rick Holt, one of the developers of Fairview Village near Portland, Oregon. “We’ve added them to rowhouses as well as single-family homes and they have introduced a greater blend of people in our community.” Ninety percent of the ADUs in Fairview Village are rented out.

“In Amelia Park, we are discovering that when people live in the garage apartments, the alley thrives as a civic location,” Embry says. “Also, we are achieving the mix of affordability that we want on an inclusionary basis, rather than through the pods of the conventional subdivision. It’s a practical way of achieving one of the more elusive goals of the New Urbanism.”

 

 

Oswego 'granny flats'

The two-story Colonial being built on a cul-de-sac in Oswego looks like any other house on the street--until you open a side door to the attached garage and discover a staircase that leads up to the granny flat.

      Upstairs, there's snug, 500-square-foot space just big enough for an eat-in kitchen, living room, bedroom and bathroom--an apartment. And not just any apartment, but possibly the first "granny flat" in a subdivision of new single-family homes in the Chicago area. By allowing these so-called accessory housing units, Oswego--a fast-growing town of 11,000 just south of Aurora in Kendall County--is breaking one of the hallowed rules of modern suburban zoning: Thou shalt not mix renters and homeowners.

      "We just wanted the opportunity to convince you they're a good deal that will add value to the community," said Perry Bigelow, president of Bigelow Group Inc., Palatine.

      Village Administrator Bruce Bronebrake said his trustees at first were leary. One Village Board committee, he said, "recommended no outside entrances [to the flats]. You'd have to go through the house, which would have killed the concept."

      In the end, Bronebrake said, the trustees decided "the market would be the best indicator of whether these would be valuable units." Bigelow was given permission to build up to 27 accessory apartments in his 275-home subdivision.

      The term "granny flat" originated in Australia to describe a small dwelling that is next to or part of a conventional home. As the name implies, the flat is a place where the homeowner's parents can live with some degree of privacy and independence.

      The "Schoolhouse" model home to open later this month at Bigelow's HomeTown Oswego development is being finished with no connecting door to the rest of the house, which has four bedrooms. 2 1/2 baths and 1,750 square feet. The model's base price is $158,900; the flats, which are built over attached two-car garages, cost $40,000 extra.

      The flats are not just for relatives, but for anyone the homeowner accepts, Bigelow said. There are no restrictions on whom homeowners can rent to--but there are practical considerations, because landlord and tenant will have to live under the same roof.

      "These will never go downhill," Bigelow said. "You will have the best tenants in town in these units--handpicked by someone who won't let just anyone come in, and who won't tolerate someone who causes trouble."

      The notion of accessory apartments in new single-family districts came into this country on the wings of New Urbanism.

      The movement calls for developments with such neighborly touches as homes close together, front porches close to sidewalks, narrow streets that de-emphasize the automobile and "intergenerational housing"--like granny flats--to create a greater sense of community than typically found in the suburbs.

      Granny flats have been built in so-called neo-traditional communities across the country. Bigelow cites as one of his inspirations those introduced in 1990 at the pioneering Kentlands development in Maryland.

      For even longer, many older Chicago-area communities have permitted accessory apartments in single-family areas. And there may be thousands of illegal units, quietly carved out of houses with no zoning official's by-your-leave. But they're unheard of in new construction here.

      Some may regard the apartments as a threat to single-family home values, but "to me, there really are no legitimate objections to accessory housing units," said Rodney Cobb, an attorney and editor of the Land Use Law and Zoning Digest of the American Planning Association in Chicago.

      Cobb has been working with the American Association of Retired Persons on a model ordinance for accessory housing units for seniors.

      A number of jurisdictions across the country--including Montgomery County, Md., and California and Washington state--allow accessory units in single-family districts to some degree Cobb said. But some areas limit tenants to family members, seniors and handicapped people.

      Steve Hovany, president of Strategy Planning Associates, a Schaumburg real estate consultant, said "It's a nice way to buy a house: The apartment is out of the way, the rent helps pay the mortgage, and it probably introduces an affordable rental dwelling [to an area]."

      The affordable-housing angle is one of the strongest arguments for granny flats. Such housing is an increasingly short supply as the senior population continues to grow.

      The U.S. Census Bureau predicts the number of people over 65 is expected to reach 53 million in 2020, up from 35 million in 1995. In the six-county Chicago area, the 65-plus population is expected to exceed 1.3 million by 2020, up from an estimated 869,400 in 1998, according to the Northeastern Illinois Planning Commission.

      A recent study by the Metropolitan Planning Council found a tight vacancy rate of 4.2 percent in the six-county apartment market. Rents have increased 20 percent since 1995, out pacing inflation to an average of $732 a month. Bigelow figures his flats in Oswego could fetch $600 a month.

      "When this proves to be successful, this may influence other towns" to buy into the idea, Bigelow predicted.

      As a matter of fact, the developers of Prairie Crossing in Grayslake last summer proposed adding 40 single-family homes with granny flats to their neotraditional development.

      Village trustees shot down the idea because of density and traffic concerns, said Eve B. Lee, director of sales and marketing for the project.

      "We hoped to achieve a number of things, not the least of which was socioeconomic diversity, with rental units near the two [Metra] train stations," Lee said. The apartments, she added would have been "for live-in help, grown children--and grannies."