Finding a Backyard Solution
Accessory dwelling units Office of the Mayor, City of Los Angeles
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
INSTEAD OF SKYSCRAPERS, GARCETTI SAYS, L.A. HAS “‘ YARD SCRAPERS .’ PEOPLE ARE STRUGGLING, SO THERE’ S AN OPENNESS TO DENSITY.”
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.