Stealth Zoning: Cities Allowing the Sale of ‘Granny Flats’

They were called “granny flats” when government agencies first started discussing  allowing “additional dwelling units” (ADUs) to be created in single-family zoned areas.

Sounds nice – a place for grandma (or big mommy and mops and grangran or whatever they happened to be called in your family) to live inexpensively, relatively independently, and stay close to the family.

And building a studio apartment above the garage was cheaper than a rest home.

Then things shifted a bit – cities started really pushing the idea and “housing advocates” caught on, saying ADUs were one way to fix the state’s affordable housing shortage.  Los Angeles even asked people to intentionally build them and then let homeless people live in them, pretty much for free.

The idea of having a mentally unstable, most likely substance addled street person living 16 feet from your back door did not catch on, for whatever reason.

But ADUs had crossed the granny Rubicon, and the state said cities really can’t deny permits for them – at all.

And now, the inevitable – cities like San Jose are letting people sell their ADUs without selling the property.  This is to provide “starter home” opportunities in a state where, admittedly, only about 25% of the population can even think seriously about buying a typical a house.

Essentially, state law allows cities to approve the idea, basically condominiuming – or creating a two person homeowner’s association –  covering the property.

The merits of the proposal can be debated – yes, it provides for the sale of cheaper housing, yes, mortaggses are being offered on them, and yes, homeownership create more stable neighborhoods than rafts of rentals (if they stay as owner-occupied.)

But the flip side does create problems – according to the glowing not a peep about any potential problems Los Angeles Times, house flippers are also being encouraged to add an ADU.

Developments are designed – and approved – with rather specific populations in mind.  A hundred house development should have about 400 residents, give or take, meaning the roads have to be able to handle X amounts of cars, the sewers have to handle Y amount of waste, and the schools have to educate (since it’s California, we’re using the term very loosely) Z number of kids, etc.

Adding the occasional actual “granny (or dissolute nephew) flat” is something pretty much any neighborhood can absorb.  But adding ADUs on an industrial scale, the numbers get badly skewed, typically creating much worse traffic than expected and unaccounted for stress on other infrastructure. And the ability to sell the unit will lead to far more units being built – it’s easy money and since experts in the Times’ story are saying they can be sold for up to half of the value of the original house, in many cases that’s a mortgage paid off (note – that number seems high, especially considering the size differential – ADUs are typically no more than about 1,200 square-feet. Real estate experts, do please chime in in the comments.)

Obviously older neighborhoods are a bit different, but jamming more people than planned for into any one environment is typically not a good idea, hence most city’s ongoing hatred of illegal alien “clown houses.”

An aside on clown houses – cities do not hate them for their inhabitants but for the fact that four families are living in a three bedroom home creates the above-noted ADU problems on steroids. Interestingly, the fact that banks would give mortgages to multiple families on one property ended up playing a noticeable role in the housing meltdown of 15 years ago – the banks assumed they were essentially getting multiple co-signers on a regular mortgage for loaning money to more than one person so the mortgage would always be paid but when the meltdown destroyed the construction industry – heavily populated with illegals – it turned out no one could pay the mortgage. Oops.

And then there is matter of bait-and-switch governmental incrementalism.  Allowing ADUs to be sold as separate units is simply “stealth zoning.”  By default, single-family zoned neighborhoods stop being single-family zoned neighborhoods without any actual zoning changes, changes on which the general public can have input.  It is similar to proposals to allow any single-family zoned property to be converted into four units.

The other issue is the increase of investor-owned properties that will occur. Buy a house for X or buy a house-and-a-half for X plus 50% and you just saved a bundle if you plan to rent out both of them.

ADUs are not inherently awful and can be very helpful for a family – either a little extra money or actually use them as a “granny flat” to help her out and to keep a family closer together (oh, and free babysitting on-site!)

But the ability to sell them now changes the entire idea behind them, behind letting them be automatically permitted because they were helping out both the property owner and, at least a bit, the community as a whole.

Now, it’s just another California real estate scam.