Backyard homes an option for aging parents
Accessory dwelling units a solution for growing shortage
Marla Torrado and her husband, Adam Keeling, started thinking about building a second home as soon as they bought their first.
“The house is on a pretty big lot, so we thought about putting something behind it that we’d rent out for extra income,” Torrado said of their property in Austin, Texas. “But then I started talking to my parents about them moving closer to us. And we were like, ‘What if they moved into our backyard?’ ”
The couple began construction in 2017 on an accessory dwelling unit, also known as an ADU, a broad term for a secondary housing structure built on the property of an existing home. Auxiliary apartments of all types have been a popular means of earning rental income for decades as well as a way to keep aging family members close. (You may know them by their more antiquated nicknames, like “mother-in-law suites” or “granny flats.”)
In recent years, urban planners and policy wonks have hailed them as a major solution to growing housing shortages for the country’s ballooning senior population. The option is especially attractive in denser areas where homes are typically expensive and unfit for people who might struggle with stairs and slippery bathtubs.
In January, California enacted sweeping regulations to make construction of the units more affordable, praising their ability to “give homeowners the flexibility to share independent living areas with family members and others, allowing seniors to age in place as they require more care.” Across the country, the coronavirus has accelerated demand, too, as families look to hunker down together.
“Especially at the beginning of the pandemic, we heard from a lot of people who wanted to build an ADU,” said Adam Wall, an architect who lives in Atlanta and New York City. “You could hear the urgency in their voices, like, ‘How quickly can we do this?’ ”
Compounding the frenzy was a growing distrust for senior living facilities and retirement communities, as some have been deadly hot spots for the virus.
“The pandemic has forced people to look at nursing homes and ask themselves, ‘Do we need more housing options for older people?’ And the answer is yes,” said Rodney Harrell, who develops AARP’s policy on housing. “We don’t have the right mix of available housing for older people with varying levels of needs, and ADUs are a way to help us fill in those gaps.”
While these units certainly won’t replace nursing homes, Harrell added, they can provide a safe, comfortable alternative for those who need some day-to-day assistance — or want to plan for when that day comes.
Over the past two decades, ADUs have gained their strongest foothold in Pacific Northwest cities like Portland, Oregon, and Seattle (not by coincidence, two municipalities that have also seen explosive population
growth and rising housing costs during that time). Portland is home to one of the dwelling movement’s most outspoken proponents: Kol Peterson, an architect and the author of “Backdoor Revolution: The Definitive Guide to ADU Development.”
Peterson has pushed for making zoning laws friendlier to accessory dwellings and for educating homeowners about their advantages. Now, he said, the units are more desirable than ever.
“With the coronavirus, it’s become increasingly evident that ADUs can provide a critical flexibility on your property,” Peterson said. “It can fill a number of roles that you may never have needed before, like providing a place for your aging parent to live instead of a nursing home, or for your boomerang kid to come back to when they’ve lost their job, or for you to work remotely.”
Affording it is another story, though. Building costs can run from $160,000 to more than $400,000. That’s still generally cheaper than buying a separate property or paying for a senior living facility for a long period.
But securing the loans, which people usually do by taking out a home equity line of credit, and obtaining permits can take months, if not longer. That’s why there’s often a lag between interest in the dwellings and their construction.
“We probably won’t see the uptick of interest in ADUs manifest itself in actual housing data for another year or two,” Wall said.
One of his clients, Eva Mauldin, 31, started the process of designing a unit for her backyard in Atlanta before the pandemic hit. Her mother, Cary Childre, 65, plans to move into it when she retires from her nursing job and sells her home in Athens, Georgia, in the coming years. The virus put their plans on hold, as both Mauldin and her husband work in the hospitality industry and wanted to make sure their jobs were stable before proceeding. Still, they remain more committed than ever.
“The pandemic solidified that an ADU was a good idea,” Mauldin said. “The thought of having Mom here with us makes the future less scary.”
Her mother plans to help out with potential grandchildren in the future; conversely, Mauldin and her husband could eventually provide more hands-on care for her mom at home.
“It’s an expensive decision, but it seems like it’ll really be worth the money,” Mauldin added.
Finding creative ways to build multigenerational compounds isn’t just for those who can afford it — nor is it new. Jacob Wegmann, an urban planner and a professor at the University of Texas at Austin, wrote his graduate school thesis about the influx of nonpermitted ADUs built in southeast Los Angeles during the 1980s and ’90s.
Major societal upheavals often catalyze changes in housing patterns, said Karen Chapple, chair of city and regional planning at the University of California, Berkeley. She built an ADU in her backyard during the country’s last major meltdown — the 2008 recession.
“Crises, like the one we’re in right now, propel action,” she said. “It’ll make sense if the pandemic results in a surge in ADU applications.”
Even if the decision to build a unit is spurred by wanting to keep Mom and Dad close during or after the pandemic, there are longer-term upsides as well, Wegmann said.
Wegmann believes that, in tandem with new laws like California’s, critical mass will make all the difference. “Once the business model has become more standardized and organized, and companies know how to get these projects down and churn them out, that’s when ADUs will really start to boom,” he said.
It’s safe to say that 2020 will go down in history like a year no other. Even, or perhaps especially, in real estate.
COVID-19 lockdowns hit mid-March, and by the beginning of April, we heard whispers about a dramatic change in attitude from homebuyers. Agents and brokers across the country reported that buyers were fleeing big city centers, looking to escape crowded living spaces, shared elevators, shuttered restaurants and the cultural institutions they had enjoyed and supported for decades.
Where were they moving? Anywhere they could get more space: suburbs and even rural America (but only if there was great Wi-Fi). The more green space the better. Those who could work from home, and were now helping their children go to school at home, wanted more space for themselves and their families.
City condos went on the market. Suburban houses started selling like hotcakes. Condos took longer to sell, and list prices started dropping (a little in some areas, more in others) while suburban home prices soared. (Rent prices in markets like San Francisco and New York dropped as well, with landlords offering dramatic monthly rent reductions with free months of rent, a trend that continues.)
But COVID-19 hasn’t caused a real estate housing crisis the way the Great Recession caused millions of suddenly unemployed homeowners to burn through their cash as they fought, and ultimately fell into, foreclosure.
The CARES Act was passed. A remarkable piece
of legislation, it required lenders to allow homeowners with federally backed mortgages (by Fannie Mae, Freddie Mac, FHA, VA and USDA) to opt into no-fault forbearance. Just for asking, you could stop making your mortgage payment without leaving a seriously negative, long-lasting imprint on your credit history (or tanking your credit score).
Forbearance would last as long as 12 months, and then you’d have three ways to come out of it: The missing payments would be tacked onto the end of your mortgage, you’d just pay the missing amount in a lump sum (or a catch-up plan would be enacted) or the loan would be modified to an amount you could afford to pay. It was eminently reasonable, and without precedence.
(At the same time, the CARES Act put almost all federal student loans into
forbearance, which took pressure off those facing monthly mortgage and student loan payments.
As a result, a significant portion of those in mortgage forbearance continued making their monthly payments anyway.)
According to Freddie Mac, at the height of the pandemic, roughly 8% of homeowners opted into mortgage forbearance. Today, 5.46% of homeowners are still in its protective shell, according to the Mortgage Bankers Association. Average credit scores reached a new high in
2020, and mortgage interest rates hit new loans more than a dozen times. (How low? The mortgage interest rate on an adjustable loan we have was just reduced to 2.785% for 2021.)
Those Americans who held onto their jobs, or got them back fairly quickly, deleveraged their debt.
When solid credit scores and the lowest interest rates in history met the need to escape for literally greener pastures, demand for housing soared, and prices skyrocketed.
(Let’s not forget that another complicating issue in the Great Recession was that housing prices were in a bubble, so when the housing crisis hit, many homeowners were underwater with their mortgages. Rising prices over the past half a dozen years means many homeowners now enjoy a significant amount of equity. Lack of housing stock today means homeowners who are in serious trouble can simply sell their homes and walk away with cash in their pocket.)
Now, the housing crisis COVID-19 may cause is one for mom and pop landlords, who rent to those employed in the retail, hospitality or entertainment
industries. Some of these tenants owe billions of dollars in unpaid rent and have been protected thus far by eviction moratoriums. What happens when those moratoriums end?
There may well be a commercial real estate crisis brewing as well, as companies that now see their employees can work from home effectively have begun the process of deleveraging or reducing office space. Every dollar not paid in rent drops to the bottom line. Walking around downtown Chicago, we’ve seen the empty office towers and wondered who will be required to go back to work in crowded towers. Stories of much emptier city centers are playing out around the globe.
Whatever happens with commercial real estate in the next few years, homebuyers and sellers should be safe. According to Realtor.com’s December Housing Report, we started 2021 with the lowest amount of existing housing inventory (homes available for sale) ever, coming in below 700,000 homes for sale, a drop of nearly 40% year over year.
So, here’s where we are: Home prices will keep going up in 2021. Mortgage interest rates are at rock bottom. Credit scores are the highest on record. Affordability will be a challenge, especially for firsttime buyers. Home buyers beware: It’s going to be hard to find what you want at a price you can afford this year, especially if you’re looking for green space.
Six years ago, Chastity and Mark Gomez, of Denver, were speaking with friends who had begun the process of becoming adoptive parents. After learning about the abuse and neglect suffered by so many children in the foster care system, many of whom need homes, they decided to get involved as well.
“It’s impossible to ignore once you learn about it,” said Mark Gomez. “The statistics are just horrific.”
On any given day in the U.S., more than 400,000 children, who have been temporarily or permanently removed from their biological families, are dependent on the country’s foster care system. Yet a perennial challenge facing the child welfare system is recruiting enough foster parents to meet the need — a problem that has worsened during the pandemic.
“If you have ever been moved to help children in need, and have the ability, now is the time to get involved,” said Rita Soronen, president and CEO of the Dave Thomas Foundation for Adoption.
“It’s intimidating to get involved, but once you get trained and gain some experience, you realize it’s totally doable,” said Chastity Gomez. “The impact you can have on the lives of these kids is incredible.”
Child welfare advocates stress there are many different ways to help — ranging from volunteering at a child welfare organization a couple of hours a week to permanently adopting a child in need — and that no way is too big or too small to make a difference.
Make that first call
An overwhelming amount of information about the foster care system exists online, but the best thing you can do, advocates advise, is pick up the phone and call your local agency. “They will tell you everything you need to know and then some,” said Soronen.
The child welfare system is run by states, and in some instances by counties, so you’ll need to find an agency certified in your area. The Child Welfare Information Gateway — a resource funded by the federal government — maintains a directory.
The culture and quality of agencies vary widely, said Soronen, so it’s a good idea to speak with several before making any decisions. Some private, religion-based agencies won’t work with LGBTQ individuals, single people, unmarried couples or parents of differing faiths. For those interested in working without such restrictions, the Human Rights Campaign, a national LGBTQ advocacy organization, maintains a directory as part of its All Children — All Families project.
Get trained and informed
Before hosting children in their homes, all foster parents must undergo 10 to 30 hours of education and training, followed by a threeto six-month “home study.” The latter involves an inspection of your home, as the name implies, but also a background check, physical and mental evaluations, interviews with you and your family members and a financial assessment.
Irene Clements, executive director of the National Foster Parent Association, strongly suggested foster parents pursue additional education opportunities, referring to the official training required by some systems as “woefully inadequate.”
“At this stage, many people get overwhelmed by this all and give up,” said Mary Keane, senior policy advocate at You Gotta Believe, a foster care agency based in Brooklyn, “But we’re not looking for a commitment the minute you walk through the door — take your time, get educated and get involved when you’re ready.”
It is particularly important, advocates said, to seek cross-cultural education and training, as most foster parents will host a child at some point with a back
ground different from their own. For this reason, Black, Latino, LGBTQ and bilingual foster parents are particularly encouraged, as children from these backgrounds are overrepresented in foster care. However, the child welfare system will enthusiastically welcome anyone with the capacity, interest and suitability to serve as a foster parent.
It is certainly not essential that you share a background with your foster child, said Julie Farber, a Deputy Commissioner with the New York City Administration for Children’s Services. “But it does reduce the learning curve,” she said.
“Queer kids face a special challenge in the system because people don’t want to take them,” said Keane of You Gotta Believe, who has personally fostered 14 children, about half of whom identify as LGBTQ. “Having that shared cultural identity can be helpful, so it would be fantastic if more LGBTQ foster parents got involved.”
Choose your path
There are many ways to support children in foster care — even short of hosting a child in your own home if you are not able, or ready, to do so. “You can do something as simple as provide transportation to support sibling visitation,” said Minna Castillo Cohen, director of the Office of Children, Youth and Families at the
Colorado Department of Human Services. “Maybe you’ll find a deeper relationship develops along the way.”
Becoming a mentor is another way to be useful without undergoing the training and certification process required of foster parents. Nina MacLean — who has fostered five youths at her home in Brooklyn, New York, over the last 31 years — said mentors have proved crucial to her and her family over the years. “They take the kids to the zoo or aquarium, giving me time to recharge, and the kids the chance to connect with another loving adult,” said MacLean.
Those who might be willing to get certified, but are unable to host children for longer stays, can still provide respite care. These short-term stays can last several days, or even hours, and are an important resource for other foster parents who travel out of town, on occasion, or need a moment to run a few simple errands. Many who might otherwise be open to long-term stays fear growing attached to the children in their care, only to see them return home to their biological families.
“The primary goal of the foster care system is to reunite children with their biological families,” said Trey Rabun, associate director of kinship and community services at Amara, a foster care agency in Seattle. “But the care and stability they provided remains with that child forever.”