On October 11th, the City of Los Angeles is considering a ban on construction of accessory dwelling units (ADUs), commonly known as granny flats or in-law suites on hillside properties in the city. According LA’s planning department, 28% of LA’s homes lie in hillside areas.
Based on our software analysis this proposed ban would prohibit the construction of over 82,000 additional ADUs that could help ease the housing crisis. A categorical ban on hillside ADUs would erase an estimated $44 billion in additional property value for these homeowners, or an average of $540,000 per homeowner.
In 2017, California implemented statewide legislation that eased restrictions for homeowners to build backyard homes and guest houses. This legislation was, in a rare show of solidarity, praised by legislators on both sides of the aisle, housing advocates, and homeowners alike. The impact of the legislation was immediate: there were 80 ADUs permitted in Los Angeles in 2016 and 1,970 in 2017. These backyard homes are used for a variety of reasons including multi-generational living (i.e., in-law suites), long-term rental units, and backyard homes. Cover’s analysis of homeowners interested in building ADUs shows that over 70% of people plan on having long-term residents occupying their units, with less than 5% saying that they would use their units for short-term rental units.
In addition to generating income for homeowners, increasing property value, generating tax revenue for the city, and increasing housing density to address the housing crisis, the state-wide ADU legislation also helps address residential safety. There are estimated to be over 50,000 unpermitted ADUs in Los Angeles, the vast majority of which would not pass building & safety inspections today, and many pose health and safety risks. By making it easier for homeowners to build permitted ADUs, the state-legislation has effectively improved the quality of the spaces being built and decreased the risk to future residents of these new ADUs.
The proposed ban on hillside ADUs would significantly hinder the progress advocates on both sides of the aisle have made to address Los Angeles’s housing crisis. New development should be carefully considered, but it’s clear that this proposed ban and its negative impact to the city of Los Angeles have not been.
ADUs are a great way to increase the supply of safe, quality housing while retaining the character of neighborhoods. The proposed hillside ADU ban isn’t good for the city, its residents, or its homeowners. It hamstrings the city’s ability to combat the housing crisis in a financially sustainable way, decreases the supply of housing in highly desirable areas of the city, and significantly reduces potential property value for homeowners. It also perpetuates the perverse incentive for homeowners continue to build and rent out unsafe unpermitted ADUs.
Alexis Rivas
Cofounder & CEO