Find­ing a Back­yard So­lu­tion

Ac­ces­sory dwelling units Of­fice of the Mayor, City of Los Angeles

Fast Company - - World-Changing Ideas - BY ADELE PETERS

Trent Wolbe is stand­ing on freshly bro­ken soil in his back­yard in the Los Angeles neigh­bor­hood of High­land Park, giv­ing a vir­tual tour of the struc­ture that will soon stand there—a small two-story, two-bed­room house de­signed to re­flect the neigh­bor­hood’s Crafts­man aes­thetic. “You get to the stairs through here, in the back of the kitchen,” he says, de­scrib­ing the thou­sand-square-foot lay­out of the home he plans to oc­cupy with his part­ner, Grace Lee, and their tod­dler once the project is fin­ished, a move that will al­low them to rent out their ex­ist­ing house in front. They be­gan this ef­fort—to build what city plan­ners com­monly re­fer to as an “ac­ces­sory dwelling unit” (Adu)—two years ago, and they ad­mit to some weari­ness. “We’ve been ex­ceed­ingly pa­tient,” Wolbe says. Every home-con­struc­tion un­der­tak­ing is a chal­lenge, but since May 2016, Wolbe and Lee have been pi­o­neers in a real-world test for the City of Los Angeles, which is us­ing their project to de­sign a po­ten­tial so­lu­tion to the re­gion’s hous­ing cri­sis. The pop­u­la­tion of Los Angeles, the sec­ond-largest city in the U.S., cracked 4 mil­lion in 2017, up from 3.7 mil­lion in 2000. The met­ro­pol­i­tan area is now home to nearly 20 mil­lion peo­ple, up 2.2 mil­lion in less than a decade. The im­proved postre­ces­sion econ­omy has lured com­pa­nies—and there­fore jobs—to L.A., ag­gra­vat­ing the city’s no­to­ri­ous traf­fic prob­lems and driv­ing up hous­ing prices: Since 2011, the cost of an av­er­age one-bed­room apart­ment in L.A. has in­creased 63%, and nearly a third of An­ge­lenos now spend more than half their in­come on rent. The va­cancy rate for rentals is just 4%, and the city’s of­fice of hous­ing pol­icy es­ti­mates that more than 400,000 low-in­come fam­i­lies are ex­pe­ri­enc­ing se­vere over­crowd­ing. All of this con­trib­utes to a ris­ing home­less

pop­u­la­tion that ex­ceeds 58,000 peo­ple in the county.

It also makes it in­creas­ingly dif­fi­cult for the city to at­tract the new busi­nesses nec­es­sary to drive the re­gion’s eco­nomic growth. These prob­lems are not unique to L.A., of course. Seat­tle is ex­pe­ri­enc­ing sim­i­lar chal­lenges. But what is par­tic­u­lar to Los

Angeles is its dy­namic mayor, Eric Garcetti, and he has made solv­ing the hous­ing sit­u­a­tion his num­berone pri­or­ity.

“Peo­ple and jobs can come to a city rel­a­tively quickly,” Garcetti says. “In a cou­ple of weeks, you can open up a new busi­ness. But hous­ing takes years to be zoned, ap­proved, and built. Now, west of our 405 Free­way, there are four jobs for every one unit of hous­ing.”

If Garcetti didn’t ac­tu­ally ex­ist, Aaron Sorkin might have cre­ated him. A charis­matic 47-year-old

Mex­i­can-amer­i­can and Jewish grad­u­ate of Columbia

Univer­sity and for­mer Rhodes Scholar, he pur­sued a

PHD at the Lon­don School of Eco­nomics, be­came a lieu­tenant in the Navy Re­serve, and plays jazz piano.

He is a na­tive An­ge­leno whose fa­ther, Gil Garcetti, served as Los Angeles district at­tor­ney dur­ing the

O.J. Simp­son trial. A nat­u­ral technophile, Garcetti is ac­tive on Snapchat, in­spired an art ex­hibit with his

In­sta­gram ac­count, and once an­nounced the clo­sure of a free­way with a mu­sic video, the “#101Slow­jam.”

When he took of­fice, in 2013, as the youngest per­son ever elected to the po­si­tion, one of his first steps was to cal­cu­late the city’s hous­ing deficit and set an am­bi­tious goal for the num­ber of new units needed to be­gin to meet de­mand—100,000 by 2021. It was some­thing that the L.A. mu­nic­i­pal gov­ern­ment hadn’t done be­fore. “How can you not have a hous­ing goal for a city where that’s the big­gest is­sue?” he says.

The mayor and his team are al­ready far ahead of sched­ule, with 68,000 new units hav­ing been com­pleted or in ad­vanced stages of de­vel­op­ment. Most of them are stan­dard res­i­dences in tra­di­tional apart­ment com­plexes. But Garcetti ex­pects a mean­ing­ful per­cent­age of the re­main­ing new units to be small, free­stand­ing dwellings built in the back­yards of homes owned by peo­ple like Trent Wolbe and Grace Lee. He knows that L.A.’S hous­ing emer­gency won’t be com­pletely solved by these Adus—he and his team call them sec­ond units—but he is learn­ing that they have an emo­tional ap­peal that is help­ing cre­ate mo­men­tum to fix the hous­ing prob­lem.

“L.A. is known for its sin­gle-fam­ily-home char­ac­ter,” Garcetti says, sit­ting in a com­fort­able chair un­der the large Ed Ruscha paint­ing on the wall in his sunny, stylish City Hall of­fice. “We have a lot of real es­tate,” he says, which is what made ADUS an at­trac­tive so­lu­tion. Res­i­dents get on board with the idea, he says, be­cause they “can pic­ture a fam­ily mem­ber mak­ing a cou­ple ex­tra bucks to get by, a young cou­ple be­ing able to stretch and maybe buy a house be­cause they can cover a mort­gage now.” And there’s a great po­ten­tial for scale: “We have 500,000 sin­gle-fam­ily homes,” he says.

Plus, they were pop­ping up al­ready, of­ten sur­rep­ti­tiously. “My district when I was a coun­cil mem­ber was the most densely pop­u­lated part of the United States out­side of Man­hat­tan,” he says. “In­stead of sky­scrapers it had what I called ‘yard­scrap­ers.’ I used to go door to door in be­tween elec­tions just to chat with peo­ple on week­ends, and sin­gle-fam­ily homes sud­denly open up and you re­al­ize there’s like 16 peo­ple liv­ing there. If these ex­ist, let’s just bring them up to code. Peo­ple are strug­gling, so there’s an open­ness to den­sity.”

The ADU ini­tia­tive be­gan with a 2015 grant from Bloomberg Phi­lan­thropies, which en­abled Garcetti to launch a spe­cial “In­no­va­tion Team” to fo­cus on find­ing cre­ative so­lu­tions for the dis­place­ments that were re­sult­ing from ris­ing rents. By fo­cus­ing on a sin­gle is­sue, the In­no­va­tion Team was able to har­ness and co­or­di­nate the ef­forts of all the var­i­ous city de­part­ments—hous­ing, plan­ning, trans­porta­tion, and build­ing and safety. “We are fo­cused on prob­lem solv­ing,” says the team’s di­rec­tor, Amanda Daf­los. “We pull in all the agen­cies that are key to that prob­lem.”

City of­fi­cials quickly re­al­ized that the homes were cheaper to build than apart­ments in large-scale de­vel­op­ments. They also learned that, de­spite the abun­dance of sin­gle-fam­ily homes with yards in L.A., few res­i­dents were ap­ply­ing for per­mits to build. They saw an op­por­tu­nity.

Mean­while, the po­lit­i­cal winds had shifted in ways that fa­vored Garcetti’s ef­forts. In the past, the city met with re­sis­tance from some res­i­dents when­ever it tried to loosen reg­u­la­tions for de­vel­op­ment, but as rents be­gan soar­ing, so did sup­port for ad­di­tional hous­ing. Sud­denly the bal­ance had shifted from NIMBY to YIMBY. Garcetti points to a se­ries of re­cent pub­lic ref­er­en­dums for fur­ther ev­i­dence of this change, in­clud­ing a 2017 pro­posal to pause city ap­proval for de­vel­op­ments in low-den­sity neigh­bor­hoods that was de­feated two to one. “That was a to­tal revo­lu­tion for our city,” Garcetti says. Vot­ers also ap­proved propo­si­tions to al­lo­cate tax­payer fund­ing for new af­ford­able hous­ing and hous­ing for the home­less. A new link­age fee, which re­quires devel­op­ers to in­clude af­ford­able hous­ing in their reg­u­lar plans or pay a penalty, was ap­proved in 2017. City of­fi­cials had been try­ing un­suc­cess­fully to es­tab­lish such a fee for 40 years.

Garcetti also lob­bied heav­ily at the state level. Jerry Brown, the mayor says, “has been a won­der­ful gover­nor. But his last State of the State [ad­dress] didn’t men­tion hous­ing or home­less­ness once. It’s been a glar­ing ab­sence out of Sacra­mento.” Garcetti threw his sup­port be­hind a bill (from state Sen­a­tor Bob Wieck­owski) that blocked cities from charg­ing large fees to con­nect sec­ond units to utilities and ended re­quire­ments to add ex­tra park­ing if a house is near pub­lic trans­porta­tion. That mea­sure passed in 2016 and went into ef­fect in 2017. “Last year was one of the most ac­tive leg­isla­tive cy­cles for hous­ing we’ve seen in decades,” says Ben Win­ter, di­rec­tor of hous­ing pol­icy for the mayor’s of­fice, “in large part due to the mayor’s ad­vo­cacy ef­forts.”

As the city be­gan work­ing on plans for the pro­to­type house with Wolbe and Lee, the In­no­va­tion Team quickly re­al­ized that home­own­ers face bar­ri­ers be­yond mere pol­icy. One is fi­nanc­ing: Banks don’t typ­i­cally of­fer loans to build a sec­ond home in your yard, so the projects are of­ten out of reach for those who could most use the ex­tra in­come. The city worked with Ge­n­e­sis LA, a com­mu­nity lender, to se­cure Wolbe and Lee a loan. (Es­ti­mated con­struc­tion costs for their new unit are a rel­a­tively af­ford­able $200,000.) “It’s chal­leng­ing for peo­ple who don’t have a lot of equity in their home to be able to ac­cess the cap­i­tal that they need to get the ADU built,” says Tom de Si­mone, pres­i­dent of Ge­n­e­sis LA, which makes in­vest­ments and cre­ates loans for com­mu­nity and eco­nomic de­vel­op­ment projects. But he be­lieves that the eco­nomics ac­tu­ally make good sense for lenders, since the

sec­ond unit will add value to the prop­erty. “Ul­ti­mately, the big­gest win will be if the con­ven­tional fi­nanc­ing tools can come into the space.” ADU rent prices are not reg­u­lated, so sec­ondary units don’t guar­an­tee af­ford­able hous­ing, but pro­po­nents are bet­ting that as the num­ber of units in lower-in­come neigh­bor­hoods in­creases, those homes should be more af­ford­able than av­er­age; the small size of the houses can also keep rents lower. Some, like Wolbe, who bought his house in 2012 be­fore the mar­ket dra­mat­i­cally changed, plan to charge low rents as a mat­ter of prin­ci­ple. “I wanted to use my good tim­ing and good for­tune to try to pay it for­ward,” Wolbe says.

Rec­og­niz­ing that the build­ing process it­self would be dif­fi­cult to nav­i­gate, the mayor’s of­fice worked with re­searchers at UCLA’S City­lab (a re­search or­ga­ni­za­tion that has stud­ied the is­sue of back­yard homes for more than a decade) to cre­ate a handbook that ex­plained to home­own­ers, in straight­for­ward terms, how to build a sec­ond unit legally. In Wolbe and Lee’s case, the team part­nered with ar­chi­tects at LA-MÁS to en­sure that the new de­vel­op­ment would be aes­thet­i­cally con­sis­tent with the clas­sic bun­ga­lows from the 1920s and 1930s in the neigh­bor­hood, a his­toric district. (Habi­tat for Hu­man­ity will build.)

Ge­n­e­sis LA’S de Si­mone ques­tions whether the ADU pro­gram can scale eas­ily. “It’s a huge op­por­tu­nity, but it’s go­ing to be a long time be­fore we see the full ef­fects of it,” he says. Nev­er­the­less, in­ter­est is grow­ing. L.A. is­sued 2,342 per­mits for back­yard homes in 2017, ver­sus 120 the year be­fore, and plans to build at least 10,000 new back­yard units by 2021. At the same time, niche busi­nesses are emerg­ing, such as Cover, which dig­i­tally an­a­lyzes back­yards to de­ter­mine if they’re a fit for a sec­ond home, and then cre­ates a low-cost, fac­tory-built de­sign.

Dur­ing its ideation process, L.A. took in­spi­ra­tion from Port­land, Ore­gon; Austin; and Van­cou­ver, which have all worked to pro­mote ADUS. Now the city be­lieves that it can be a help­ful ex­am­ple for other cities strug­gling with hous­ing short­ages. Since Los Angeles helped pop­u­lar­ize the sub­urbs, “we also ought to give birth to the post-sub­ur­ban so­lu­tion,” says Dana Cuff, di­rec­tor of City­lab.

Garcetti has teamed with Pete But­tigeig, the millennial mayor of South Bend, In­di­ana, to es­tab­lish the Ac­cel­er­a­tor for Amer­ica, a fo­rum through which cities can share

repli­ca­ble lo­cal ini­tia­tives. “What if we went into an­other 10 cities, not as a think tank but a ‘do’ tank,” Garcetti says. “You want to do a ref­er­en­dum in your city this year? We’ll bring the ex­perts that helped pass it in L.A., get you polling, get you money. Our idea is to help them get their hous­ing and in­fra­struc­ture pack­ages on the bal­lot.” Ac­cel­er­a­tor for Amer­ica’s web­site draws a clear con­trast be­tween ur­ban progress and fed­eral pol­icy, an­nounc­ing that “with Washington bro­ken, lo­cal in­no­va­tors are tak­ing ac­tion.” In­deed, Garcetti has clearly grown frus­trated with na­tional pol­i­tics: As fed­eral tax law changes have de-in­cen­tivized af­ford­able hous­ing de­vel­op­ment, he is work­ing for in­creased fed­eral at­ten­tion on hous­ing. The


more he dis­agrees with fed­eral de­ci­sion mak­ing, the more he con­sid­ers a move into fed­eral gov­ern­ment him­self.

“A higher per­cent­age of my time is [de­voted to do­ing] de­fen­sive work,” the mayor says, “and I’m more and more wor­ried about the coun­try’s di­rec­tion. So if I can add some­thing to that, I’ll con­tinue to look at it. All pa­tri­ots, if they have half a chance of win­ning, should be look­ing at be­ing part of a move­ment of peo­ple to change the White House.”

For now, he’s fo­cused on Los Angeles and mak­ing sure that res­i­dents have a place to live. “This Cal­i­for­nia dream will slip away from our hands if we don’t fin­ish the work of cre­at­ing af­ford­able hous­ing,” he says.

To­ward the end of a sunny, 80-de­gree ear­lyfebru­ary day, Grace Lee steps out­side to pick greens from her gar­den in the front yard. A neigh­bor pauses on the side­walk so that his dog can say hello to Lee’s cat, who is eye­ing the ca­nine war­ily from in­side the screen door. Lee is look­ing for­ward to build­ing planter boxes be­side the fam­ily’s new lit­tle house once it’s com­plete, and she’ll be happy to help their even­tual ten­ant tend to the gar­den out front. It’s a great way to get to know the neigh­bor­hood.

The In­no­va­tion Team, di­rec­tor Amanda Daf­los says, “works on a model of re­ally deep re­search,” in­ter­view­ing city plan­ners, builders, home­own­ers, and neigh­bors.

Pho­to­graphs by Dan Mon­ick

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