Your Backyard is the Future of Housing

Cover, an LA based startup, designs and builds ADUs

As a college student getting ready to enter the real world, I’m beginning to consider what post-grad life will look like. One of the harsher realities I’ll be facing is the LA housing market.

Let’s take a look at some of the current problems with LA housing, then explore the viability of Accessory Dwelling Units (ADUs) as a solution.

Problems of LA Housing

Perhaps the most obvious challenge of living in LA is the extremely high cost. We can use rent burden, the amount of households spending more than 30% of their income on rent, to examine just how high that cost really is. The LA metro is the third most rent burdened area in the country, while California is the most rent burdened state.

California’s housing shortage contributes to this problem by keeping prices high while limiting people’s choice of where they can live. This is especially problematic when considering the expected growth for the region. If supply continues to lag behind demand, communities will become less affordable and the region won’t be able to welcome growth. This can discourage companies from setting up shop in the region, potentially causing broader economic woes.

Finally, while high housing costs affect everyone, they don’t affect everyone the same. Even those making 115% of the median income in communities like LA, Long Beach, and Anaheim can’t afford local housing costs. This disproportionately affects lower income groups who are most rent burdened because when families have to pay a huge portion of their income to have a roof over their head, they lose the ability to save for things like unexpected healthcare costs, buying a home, or sending their kids to college.

The Potential of ADUs

An Accessory Dwelling Unit is basically a structure that you can build in your backyard. Think of a mother-in-law apartment or a guest house. People can use them as a spare bedroom, office or rental.

One of cover’s ADU designs

ADUs benefit renters by adding much needed supply to the market. The fact that ADUs are small means that they create an increase in affordable housing options. Moreover, a UC Berkeley study found that over half of ADUs get rented out below the market rate.

Homeowners can reap the benefits of ADUs by using them as an added source of income. Aside from earning extra cash and boosting their land value, ADUs offer a way for homeowners to keep in-law’s and family members close while enabling them to maintain their independence.

Inside an ADU designed by Bunch

In addition, ADUs are great for the environment. Different methods of building them, such as modular construction, greatly reduce the amount of building material that ends up in landfills. Because they use existing utility lines, ADUs boost land use efficiency and mitigate the negative effects of urban sprawl.

It’s also important to note that in this new age of COVID-19, ADUs can accommodate increased density while allowing people to be socially distant in ways that apartment buildings can’t.

Lastly, the scalability of ADUs also makes them a promising housing solution. Companies like Icon are using 3D printers to make 500 sq ft homes in 24 hours. They even built an entire community of these homes in Mexico, as seen in the video below.

Cons of ADUs

Still, there’s some serious things to consider before you start taking measurements of your backyard.

One of the biggest reasons ADUs receive push back, at least when they’re intended to be rented out, is that they increase population density. This causes problems for neighborhoods like more traffic and less parking. Homeowners have a very valid concern here. ADUs can change the character of their neighborhoods and affect the value of their home. Moreover, if the goal of building ADUs is to accommodate population growth by increasing housing supply, it’s tough to say which communities should bear the brunt of the increased density and live with costs that accompany it.

But if our population is growing, some of the problems we’re avoiding (more traffic, less parking) are arguably inevitable. In addition, LA is making investments (improving public transit, for example) that signal that they’re making a commitment to accommodating increased density and mitigating the problems it brings. It follows that public policy and zoning regulations will increasingly reflect the same.

One of the other big barriers to ADUs is the cost of construction — some ADUs can cost over $200,000 to build. On top of the cost, there’s also the tedious process of permitting and planning, making them somewhat inaccessible.

But there’s startups that make the process of building ADUs easy and affordable. For example, Cover takes care of permitting, design, and construction while Rent the Backyard helps with financing and finding tenants.

Conclusion

The issue of whether or not we should look to ADUs as a solution for LA housing is more complex than this article gives credit.

ADUs are certainly not a catch-all solution, and they’re not a great fit for every community. However, they definitely have the potential to positively change the way we live.

So next time you think of the future of housing, start by looking at your backyard.

Student at USC, entrepreneur