John Gregorchuk had a plan: He would buy a house with ample room in back, enough room to build another unit.
He would rent out that "granny flat" to help cover the mortgage. And then, when he and his girlfriend were ready to marry and start a family, his mother-in-law could move in and help take care of the kids.
It seemed at first that everything was falling into place. Two years ago, he bought a house in Exposition Park. He saved up for a construction loan. He forked over money for city fees and got his plans vetted.
But when he went to pull his building permit earlier this year, the city refused.
A legal battle had stopped Los Angeles from permitting new granny flats – and thrown hundreds of units already tucked behind local homes into limbo.
As the city tries to sort out that dilemma, it has renewed a furious debate at City Hall over what homeowners like Gregorchuk should be able to build in their backyards.
Granny flats – also known as second or accessory dwelling units – have been seen as an easy way to bring more homes for the middle class into crowded cities and chip away at the housing crisis that has driven up Los Angeles rents.
State lawmakers have sought to smooth the approval process so more are built. If granny flats popped up on 10% of the single-family lots in L.A., that would make up roughly half of the 100,000 new units Mayor Eric Garcetti has pledged to create by 2021, said Dana Cuff, director of the CityLab think tank at UCLA. Garcetti has backed them as a way to add housing "without disrupting the character and scale of our residential neighborhoods."
But some residents fear shoehorning in more granny flats could do exactly that. Neighborhood groups have pushed for the city to retain stricter rules on second units than California law would otherwise impose.
Diana Nave, who chairs the planning committee for the Northwest San Pedro Neighborhood Council, said residents worried that a "free for all" for granny flats could worsen parking and traffic. "We spend all this time making sure we have housing that fits into the neighborhood — and they're just going to wipe that all out," Nave said.
With lawmakers split on what to do, the City Council put off taking action last week, infuriating Gregorchuk and other homeowners who had hoped the city would swiftly end their plight.
"They cannot leave 600 people hanging on loose thread," said Len Judaken, whose son was sued over a unit meant for him in Cheviot Hills.
The legal dilemma centers on a clash between city and state law: Years ago, California passed a law that was meant to smooth the way for granny flats, one that conflicted with city rules that gave planning officials discretion to determine which units would be allowed.
After the state law was passed, city officials decided the municipal ordinance would not apply – but never rolled it back. Six years ago, they penned a memo that said granny flats would be allowed if they were in line with state standards and city zoning.
But after a dispute erupted over a granny flat being built for Judaken in Cheviot Hills, a court ruled that L.A. could not simply disregard its city law without doing the proper analysis. It ordered the city to stop handing out building permits for secondary units that relied on the invalidated memo.
Hundreds of granny flats had gotten city permits under those rules. Planning officials say that when the ruling was handed down, more than 200 people had obtained building permits for second units, but not certificates of occupancy, which allow a building to be legally occupied.
The city said those plans could still move forward, but owners would have to sign a document saying that their granny flats could be vulnerable to a legal challenge. An additional 354 people had already gotten the occupancy certificates but are now left under a "legal cloud," city planner Matthew Glesne said.
Garen Papazyan, a real estate investor, complained that it was like driving the speed limit one day, then getting a ticket in the mail after the speed limit was lowered. He said he had spent roughly $30,000 so far on a San Fernando Valley unit.
"People did this legally. Now they hear, 'We as the city screwed up – so you can't continue,' " Papazyan said.
The court ruled that Los Angeles could clear up the legal muddle by amending its old ordinance, or simply repealing it.
City planners had proposed rolling back the city rules. That would allow Los Angeles to fall back on California law, which sets looser rules for granny flats. They also sought to grandfather in backyard units that had gotten city permits in the past.
Relying on the state standards has troubled some neighborhood groups, which want the city to impose its own stricter rules on granny flats to stop "out-of-scale" units. California prohibits cities from requiring a discretionary process to decide which granny flats are allowed — as the old L.A. ordinance did — but it still allows cities to set some local standards for their size and placement.
Turning to the state law is "the easy choice — but it's a terrible idea," said Cheviot Hills attorney Carlyle Hall, who spearheaded the lawsuit that forced L.A. to reconsider its rules.
The municipal rules said granny flats could be no larger than 640 square feet, while the state allows them to be nearly twice as large – up to 1,200 square feet. That has alarmed local lawmakers such as Councilman David Ryu, who said speculators could exploit the looser rules to build "monstrosities."
In Van Nuys, Michelle Kiers said she avoids opening the curtains in her bedroom after a second unit that was two stories high was erected in a nearby yard.
"We're not opposed to second units," Kiers said. "But this isn't a second unit. This is a full-size house."
The unit measures nearly 1,200 square feet. Ron Mandalian, who designed it and other granny flats, argued that it had no effect on the community and that clamping down on size would squeeze out families. Planners say that even under the state standards — which L.A. has relied on for years — few units will be built that large because the city generally limits the square footage of a home and its accessory buildings to no more than half of the lot size. All in all, roughly 60 units have gotten permits annually in recent years.
Mark Vallianatos, co-founder of the advocacy group Abundant Housing L.A., said the uproar comes from "people who want to freeze the city in time." Amid a housing crisis, Vallianatos said, "we have a form of housing that is small-scale, infill and controlled by the homeowner — and people are still complaining about it."
The drama at City Hall could also be affected by action in Sacramento: State lawmakers are mulling two bills that would curb city restrictions on granny flats, including limiting parking requirements and prohibiting cities from requiring uncovered pathways to the street. Those bills are expected to be heard this week.
Follow me on Twitter at @LATimesEmily