The ‘Granny Unit’ Option for a Rental-Squeezed L.A.
News that the April median price for a house in the city of Los Angeles was $309,000 put the dream of homeownership further out of reach for two of three residents. Even with interest rates at 40-year lows, it would still take an income of roughly $75,000 a year to qualify for a mortgage on that modestly priced house.
With so few affordable homes to buy, rents have been soaring as fast as housing prices, if not faster. At $1,200 and up for a standard two-bedroom apartment, nearly one in four renters in the city pays more than half of his or her monthly income in rent. Furthermore, nearly one in five apartments is severely overcrowded, with seven residents crammed into a typical two-bedroom flat, according to city housing authorities. No wonder that, on any given night, as many as 40,000 men, women and children sleep on the streets.
Everyone laments the city’s housing crisis, but for years the City Council has refused to open a potential gold mine of reasonably priced housing -- guest houses, garage apartments and granny flats on single-family lots. As things stand, zoning laws forbid renting out or building these second units, also known as “accessory dwelling units.” But if the council made these legal rental units, tens of thousands of new apartments would be immediately added to the market. By also selectively encouraging the construction of similar units, it could make long-term progress in creating more affordable housing in the city.
Indeed, these second units could become a prime source of new housing when one considers that, by city estimates, 8,000 new units are needed annually, and at the current pace just half of them are being built. Tax rolls -- hence, city revenues -- would increase. The number of lower-end apartments would grow, reducing pressure on rental prices.
Though renting out second units would involve a small commitment of city resources, it would chiefly rely on the private wealth of individual homeowners, who would invest their own money to create rental property with the expectation of a decent long-term return -- or even as an offset to the new mortgages so many are taking out nowadays in the latest rush to tear down and “McMansionize.” It would also be the cheapest way to add housing, because infrastructure, from sewer lines to concrete footings, is usually in place.
Nobody knows how many bootleg apartments and guest houses exist, because the city has never conducted a survey. But estimates range from 40,000 to 200,000 households occupying unlawful residences. Usually single rooms, some are comfortably outfitted. Others are firetraps with pails for toilets and extension cords for electrical power. Nannies and maids live in some units. Others are occupied by family friends or recent college graduates trying to get a toehold in both the job and housing markets.
Many, as city inspectors regularly discover, are home to families cooking on hot plates and breathing unventilated fumes from gas-fired water heaters. You can find ramshackle hovels carved out of laundry rooms in upscale apartment buildings in Westwood, with rents pegged below prevailing rates, and you can find fairly habitable flats in converted garages in Highland Park, priced well below comparable apartments in more affluent neighborhoods.
Council members, the mayor’s office, city housing authorities, renters’ rights groups, even building-and-safety bureaucrats (with a wink) tolerate these illegal units as a fact of life in L.A. But they don’t have to be hypocrites. A state law, passed in 1982 and updated last year, declares that “second units are a valuable form of housing in California” and encourages their development. The city’s own housing department endorses that idea. In Sacramento, second units are being rented and built, and in Santa Cruz the local planning department has commissioned plans for seven prototype granny units for distribution without charge to homeowners.
Yet, the L.A. City Council continues to hold sacrosanct the single-family dwelling. Parking, design standards, privacy, crime, density -- all the code words for “Not In My Neighbor’s Yard” -- have repeatedly checkmated efforts to reform the city’s zoning regulations.
The California Legislature had it right in 1982, when it said: “Second units provide housing for family members, students, the elderly, in-home health-care providers, the disabled and others, at below-market prices within existing neighborhoods. Homeowners who create second units benefit from added income, and an increased sense of security.”
Thus, the legal framework for the City Council to act exists, even if the political will does not. But think on the bright side. Los Angeles could get the granny-unit blueprints from Santa Cruz -- free.
