Cities score poor grades for granny flats

Development roadblocks persist despite state reforms, study finds

“The sheer lack of expertise at the local level is stunning. We have so far to go.”

— Karen Chapple, faculty director of the Center for Community Innovation at UC Berkeley

California cities are doing a poor job encouraging homeowners to build granny units amid the housing crisis, despite several state reforms designed to cut red tape, according to a new report.

A survey by UC Berkeley housing researchers gave the typical city a C-plus for measures supporting accessory dwelling units, or ADUs.

In fact, since the state began loosening restrictions on ADUs in 2017, some cities have tried to hinder development, mandating extra-large lots for ADU construction, additional parking spaces and levying high impact fees for new construction.

“We thought folks were doing better,” said Karen Chapple, faculty director of the Center

for Community Innovation at UC Berkeley. “I don’t usually have a median grade of C-plus in my classes.”

Oakland (B-plus), San Jose (B), Concord (B) and San Francisco (A-minus) scored well, while Campbell (C), the city of San Mateo (C) and Saratoga (D) slipped below the median. The grades for about 200 municipalities were based on 16 different measures, including a user-friendly process and compliance with state law.

Chapple noted the grades are evolving, and do not measure how cities have adapted to new laws enacted in January.

Housing advocates see granny flats — including converted garages, backyard cottages and self-contained units with private entrances — as a relatively quick way to add needed housing in the Bay Area. Planners estimate the state is short as many as 3.5 million housing units.

ADUs are typically less expensive than traditional apartments, and can serve as affordable housing in neighborhoods near job centers.

Homeowners in Northern California were more likely to run into high permit costs, while Southern California residents became enmeshed in onerous parking regulations and demands for large lots, the survey found. Some of the restrictions, including lot sizes, have been lifted by a new state law enacted in January. The new law also streamlines the process for building up to two new units on a property.

Chapple said another major roadblock for developers and potential ADU owners has been local planning departments. Many cities are still grappling with the changes to state law, and lack a routine process for guiding homeowners and developers through the permitting process, Chapple said.

“The sheer lack of expertise at the local level is stunning,” she said. “We have so far to go.”

The center plans to eventually review ADU policies from more planning departments across the state.

Many homeowners echo a common complaint — development guidelines can change midproject, and well-meaning efforts to bring old units into compliance often end up with running disputes against city inspectors and planners.

Buddhadeb Basu and his wife bought a home in Campbell a few years ago. The house included a newly renovated, 500-square-foot ADU in the backyard. The couple found out later the apartment didn’t have the proper permits, he said.

Basu has spent 18 months and $15,000, along with presentations to planners and at public meetings, to try to bring the ADU into compliance. So far, the city has not granted the permits. It wants him to cut the unit to 350 square feet, he said.

Basu researched other properties in Campbell and found similar backyard apartments — perhaps just one code inspection away from being deemed illegal. “This is not an isolated event,” he wrote in an email.

Navigating the long and costly approval process isn’t the only hurdle homeowners face. Others look at the construction and planning costs — which can exceed $300,000 — and scrap the idea. Even less expensive units can stretch some budgets too far.

Nonprofit housing groups have sought to step in and encourage new housing. The Housing Trust Silicon Valley is developing a program to extend short-term loans to certain homeowners to build an ADU. The owners of the new units would be required to rent the apartments to low- and moderate-income residents.

Fathia Macauley, chief lending officer for the housing trust, said the program would help homeowners otherwise unable to get a traditional bank loan for the housing improvements. Details are still being worked out, but the nonprofit expects to roll out the program later this year.

“There’s a lack of affordable housing in our region,” she said. “ADUs are a wonderful way to build low-income housing.”