A Revised ADU Program
It is staggering, the amount of money, earmarked for housing, that has flooded California, yet it seems that temporary housing, emergency services and few permanent homes are forthcoming.
The state has borne heavy fruit with SB9, allowing a single-family zoned lot to be split and a duplex put on each side, and SB10, offering ten units on the same lot. Myriad roadblocks, like NIMBY, code enforcement, cost, environmental and zoning rules, are out there. Because, homeless people are viewed as hopeless in their present state, it is imperative, supportive housing advocates call non-profits to train for jobs, teach language, offer medical care, legal, and life services. New construction is at $850.000 per apartment, which is a real deal killer. Getting finances, planning, code enforcement, legal challenges and construction fees all make it more difficult. One example, a 79-unit affordable building, accepted in 2019 to be built at San Jose’s Roosevelt Park, just got funding of $56.5 million and will take two years to complete. Here, the unit price is $715,200, but the wait, so far, has seen a price rise of 23%.
The city is missing a chance of quicker, less expensive housing in developing a standardized Auxiliary Dwelling Unit. San Jose already has developed a program, just not enough to matter.
1. The Standard ADU should be single story only, and limited to one. It could have one of three sizes: A Studio at 700 sq. ft, A Two Bedroom at 900 sq. ft. and a three bedroom at 1,100 sq. ft. It must be placed in the rear of the existing home. The number is controlled to no more than four ADUs in one block,
2. These standard pre-approved designs, could be partially constructed in the factory. Costs could be about $400,000 or less.
3. The City of San Jose would pay the full cost of the ADU. The City’s reward would be the housing of an individual or family at an affordable rent. The city would hold a $400,000 note owed by the owner. So long as it is rented at an affordable rate, each two-year anniversary, the loan would drop by $50,000. If the owner sells the property, the new owner must accept the same agreement, or the balance of the loan must be paid in full. If the new owner desires to end the rental program under the Ellis Act, resettlement fees would be required.
4. Construction of the ADUs could be done modeled after Habitat for Humanity’s program, by encouraging retired tradespeople, supervised union apprentices, volunteers, and future residents to hold costs down. In other words, a community effort.
5. Keep in mind, the owner will be the property manager (or they could hire a manager). They will be responsible for maintaining the property such as painting, landscaping, plumbing, roof repairs, insurance, and city regulations, while receiving less than market rents.
Therefore, the property tax reassessment of the ADU will be stopped, however, the property tax will be paid. Until the ADU loan has been cancelled, city housing fees shall also be waived.
6. This program has the City build the ADU and virtually turns it over to the owner, without a property tax increase, but a $400,000 promissory note with automatic $50,000 reduction every two years. There are no loan payments by the owner. Without additional taxes, fees and payments, the owner will be able to survive on the lower rent structure, basically 30% of earned income. However, if extraordinary expense on the AUD, like solar installation, air conditioning or privacy landscaping are accomplished, the city will take half of the cost from the loan.
7. Because, the proximity of ADU and owner is so close, the owner’s rights in the face of discord, shall have increased rights in negotiations and settlement. Rent control measures would be applied more empathetically toward the owner, because in principle, it is inviting someone into their home. Affordable rents, tenant and owner rights would be decided by a commission of Renters, Owners, and Citizens, who are neither.
8. The Housing Department is hoping to add another five full-time Employees, for approximately $1,300,000. I encourage the city to take that amount, take Measure E funds to bring the total to $2, 250,000 and make a trial building five ADUs. It certainly won’t take five years to bring it to fruition.
David Eisbach