In California, you can now sell your ADU
dwell.com
dwell.com
It's so bizarre, and if this solution is taken to its logical end, you literally have cities full of single-family homes with a class of SFH owners, and their second-class ADU "owners" who live in the fancy shed behind their home. I'm curious how the inevitable legal disputes between these two classes of owners will be treated in the coming years.
Homeowners can see themselves benefitting from ADUs, so they support them. Apartments, townhomes, etc. only weaken their market power, make homeowners think about traffic, etc.
The politics of housing is completely broken because the incentives are broken, and so is the political discourse, which is dominated by creationist-level magical thinking that vacancies, or foreign buyers, or AirBNB, or "financialization" or literally anything could be the cause of the problem rather than a shortage of housing stock.
As far as being "sheds", plenty of them are quite nice and well done. Small yes, but small units are perfectly appropriate for, say retirees, or students, or many other demographics.
In a different time, they were called "Granny units". A place where someone who doesn't need much can live, and remain local to their entire support system and social network.
Yah, but this is different from when we have a separate marketplace of these units. They're going to end up unbundled from the nearby house pretty quickly.
The state defined specific things a city has to approve and a timeline they have to approve it in. Poof, we have ~100,000 new homes and a cottage industry building them that didn't exist beforehand. It's hard to blame the housing shortage on anything other than NIMBY municipalities.
I'm not saying this is a good idea, but is it really that different?
In Seattle, ADU/DADU are built in Single Family House zone, you can tear down a single family house, build 1 main + 1 ADU + 1 DADU which is total of 3 without zoning change, then you can sell all 3 of them as Condos, require buyers share something like water bill.
Townhouse has to be build on the areas that are up zoned by the city.
The primary home is not upper class; it’s the worse of the two units. It just becomes two houses without backyards. I’ve seen such houses for sale in Seattle. An old house with a big yard on a 5000 sqft lot turns into an old house + a new house, both without backyard. The new unit is not second-class; it is a nice house but just without backyard.
Like with the homeless crisis (which is the direct result of the housing crisis), the state will waste billions doing anything and everything to look like they’re working on the problem, while actually doing nothing meaningful because the meaningful things would cost said speculators money. This ADU law is the perfect example. More opportunity to speculate while doing nothing to make housing more affordable or available.
The homeless crisis is better described as a mental health and substance abuse and addiction crisis.
There may be a small causal arrow where homelessness causes some addiction or mental health issues, or a very small arrow where addiction or mental health causes some to be homeless, but the bulk of the problem is high housing costs.
It is not always like that. I met people who are homeless and living in the car, they don't have mental health, substance or addiction problem. They are homeless because they couldn't afford the housing cost (including apartments).
The homeless crisis is a direct result of the housing rising costs. Los Angeles and San Diego in Southern California have increasing homeless population due to housing cost. I remember 12 years ago, LA downtown have a smaller homeless popultion and they are usually out of the way. I visited my friend this year who lives in LA and homeless people are in every block of downtown which is barely a thing 12 years ago. This is the result of the housing cost crisis.
You might be wondering why the homeless couldn't move to somewhere else? The thing is they can't because metropolis cities have a better social services they can provide for homeless populations and larger access to facilities within a block than a suburban or rural cities. Majority of them don't have access to transportation that they can afford.
30 years ago, the homeless are a result of mental health, substance abuse and addiction crisis. Now, that changes because of other factors such as rising housing costs which is a bigger factor.
> A large body of academic research has consistently found that homelessness in an area is driven by housing costs, whether expressed in terms of rents, rent-to-income ratios, price-to-income ratios, or home prices. Further, changes in rents precipitate changes in rates of homelessness: homelessness increases when rents rise by amounts that low-income households cannot afford. Similarly, interventions to address housing costs by providing housing directly or through subsidies have been effective in reducing homelessness. That makes sense if housing costs are the main driver of homelessness, but not if other reasons are to blame. Studies show that other factors have a much smaller impact on homelessness.
https://www.pewtrusts.org/en/research-and-analysis/articles/...
Sorry, the bar is LOW?
In normal circumstances (with prices that aren't super high), you wouldn't be able to call $610,000 affordable. But here, you can. So the bar is low. The label has loose criteria.
edit: sorry, this was already said by multiple other people - apparently had an outdated thread in the browser, those comments weren't there when I hit reply!
If you built 10 floor buildings everywhere, with 2/3 bedroom apartments, even at 1 apartment per floor, housing stops being an issue in 5 years. However, go to Seattle, San Francisco and Vancouver, out of their downtowns, houses everywhere.
Housing is a solved issue, cities in Asia and Latin America with the same surface area as SF, Seattle and Vancouver fit 3x to 4x more people, but they build up and increase density.
All these housing threads are frustrating because of this, just build buildings.
Tell that to every apartment building with a waiting list. The fetishization of single-family housing comes from planners, not the populace.
From what I read, the fetishization comes from already homeowners who want to have their cake (a house) and eat it too (making it an asset that appreciates). Since voting is non mandatory in USA, voters tend to skew old and/or homeowner, both of which like to maintain the status quo, hence favoring policies that keep it.
They blame politicians, etc. for the results of the planning profession over the past 50-70 years.
Perhaps the planners are right, but then my question is, what do planners actually do?
If preferences really were so strong for single family homes, there wouldn't have to be a legal ban on other forms of housing.
This stranglehold on the housing problem, by a few politicians and a small number of homeowners banning others from living their preferred way of life, is the true cause of the shortage.
So, 51% vs 49% ? That's still half of the people wanting houses.
I agree that regulations are to blame, and most of the voters vote against housing, because people in the us who vote are mostly the boomers, who are mostly homeowners, hence increasing the value on their home.
But this is stated preference, not the true preference as revealed by having to put money on the line. And markets prove time and time again that opinion polls do not match up with actual behavior. IMHO, I would suspect more people would choose walkability over SFH than the polls suggest, but I could also be wrong and maybe it would swing the other way.
In any case, the market is not allowed to meet consumer demand because of the ubiquity of apartment bans in cities.
I have a feeling that if we did more voting rather than backroom deals with a veneer of "public input" where the only people who provide input are busybodies, then we would not have apartment bans at 90% of land area in most cities. (I say "busybody" as a busybody myself, I had to start being one to push back against the housing policy that was causing so many of my friends to move away!)
Why is your neighbors smoke entering your house ? In my country, everyone cooks highly aromatic food, and even then I can't tell what my neighbors are cooking....let alone smell their vape or cigarettes.
Why can you hear pounding bass from our neighbor ? Sound isolation is a solved problem. The thin-walls problem is one I've experienced only after I arrived in the US.
Not sure why lack of a yard is a problem at all. What is a yard, except empty green grass ? If it is a communal space to host events, then lots of condo towers have common downstairs areas that can be reserved for free. If it is a garden, then you can easily have patio gardens. Hell, I've seen more gardens in apartments back home (since home cooking is the norm), than I have in yard in the US. If is a backyard, ie. ourdoors private space, then large patios facilitate the exact same outdoors privacy. If it is a playground, then you'll be pleased to know that most apartment complexes in Asia have playgrounds. And guess what? It comes with the community you need to actually form a team to use the playground.
It would be one thing if every time I visited the suburbs, if I saw yards being a communal source of activity, happiness and personality that people claim they are. On the contrary, I find that it is miles upon miles on completely empty plots with consistent green grass that has not been stepped on for days.
My current apartment in downtown US city has a massive common lounge area and a massive rooftop with a view of the city. We have a large enough patio and I have never heard sounds from my neighbors because it uses bricks rather than dry-wall. (And I live in the THE SPOT for young rich spoiled 20-something). It does everything you get from an SFH, but better. (assuming similar capital investment)
This comment is literally the point I was trying to make, thank you very much, I couldn't ask for a more typical american answer.
If you want to live in a city, and not pay sky high rent, these are going to be some small issues you will have to work with. I say small, because the alternative is not having housing, or paying half of your salary in rent/mortgage.
The bass is solved, have the HOA or condo board apply fines for loud noises, which grow exponentially with each infraction.
Lack of your own yard? Go to a park, I lived in Vancouver in an apartment, and I had a ton of parks nearby, same in other cities I've lived in.
Having a house in a city is luxury, not a need, a home is a need, but that can be an apartment.
How many cities will ever sign up for this?
To be fair, however, they did pass an ordinance that allows up to 6 units per lot and condo subdivision, but the catch is that the extra units are rent controlled, making them less appealing for unsophisticated buyers (https://sfbos.org/sites/default/files/o0210-22.pdf).
In California, you can NOT sell your ADU right now. Cities might opt in, but they haven't yet, so it's premature to say that you "can now" do so.
In, what is ostensibly the most progressive, most prosperous state in the union, you can build a "mini house" (accessory dwelling unit) on your property and rent it out. The ideal target market would be my generation (millennials) and the next (Gen Z), bc we can't afford homes in CA.
And now, you can even "monetize" your ADU...sometimes the free market does bizarre things.
Question - how long will this last before the young say "enough" and vote for politicians that just redistribute assets? Bc that historically has not worked well.
Anyway, see you in Texas. Or Florida.
"Selling" your ADU would either require dividing up the parcel (which I am guessing is nontrivial in most places) or somehow itemizing improvements on the parcel so that the ADU owner can pay taxes for their unit separately from the main home on the property.
No reason to figure out a solution to any of this when housing isn't much of a problem there.
The NIMBYs: they don't pay their fair share of property taxes (because prop 13). They oppose building new housing to drive up their property values, but this doesn't increase their property taxes because prop 13
A start would be this: repealing prop 13 and forcing the NIMBYs to pay their fair share of property taxes. Make them sleep in the bed that they've made for themselves
There is nothin "wrong" or "right" about free market economics bc there is no concept of morality in free market economics. It is what it is.
But it is the clearest of signals of what is going - US standard of living has peaked and is going down.
> Wouldn't this possibly incentivize more ADU building thus supplying more housing units to the market?
Is that trend that benefits me? I do not think so, I do not want to live in a ADU nor do I want one on my property, nor do I want to live in a community that has ADUs.
> nor do I want to live in a community that has ADUs
Would you rather have a free market or a local land use committee to forbid ADUs?
Sounds like you don't want them in your backyard.
Here are some instances of what CEOs do when they are flush with cash:
- A top Trump adviser’s startling response to CEOs not doing what he’d expect [1]
> "As Cohn sat comfortably onstage, a Journal editor asked the crowd to raise their hands if their company plans to invest more if the tax reform bill passes. Very few hands went up. Cohn looked surprised. “Why aren't the other hands up?” he said." [1]
> Make no mistake: The proportion of net income distributed to the shareholders of S&P 500 corporations is indeed high. From 2007 to 2016, the S&P 500 firms paid out $7 trillion to shareholders—$4.2 trillion through repurchases and $2.8 trillion through dividends—representing 96% of net income. Microsoft was one of the top cash distributors, paying out a total of $188 billion to shareholders. [2]
> In 2011, Senate Democrats, arguing against another repatriation tax holiday, issued a report asserting that the previous effort had actually cost the United States Treasury $3.3 billion, and that companies receiving the tax breaks had thereafter cut over 20,000 jobs." [3]
All of this signals pessimism in the upper ranks of corporate america.
Does this still sound reductionist?
[1] https://www.washingtonpost.com/news/wonk/wp/2017/11/14/why-a...
[2] https://hbr.org/2018/03/are-buybacks-really-shortchanging-in...
What's degrading is people on the street because CA has such an extreme housing shortage.
As is this absolute canard "the real issue is affordability." Well obviously. But where does the unaffrodability come from? What gives landlords and home sellers the power to price far above average incomes?
It's a shortage of housing. If there was enough housing they simply could not price at unaffordable prices, because there would be no buyers.
The simple inability to see this is like some Jedi mind trick that landlords and real estate interests have played on the populace. We need to fully reject any ideology that has been saying that there's enough housing, because it's a bad and harmful ideology.
Hmm, maybe the type of housing being built.
Crappy little homes all over the city spiral up in price. Meanwhile a small number of apartments and condos are built downtown, and people publish fake studies about how there are vacancies, and the studies have to be retracted within days.
Everybody focuses on the new as if that's causing the problem, rather than seeing that there's massive massive overcrowding everywhere, lower income people are commuting massive distances, and what used to be working class neighborhoods have homes selling at prices that require household incomes of more than $500k/year.
The problem is a massive shortage. (And massive corruption in the permitting process, how many LA pols are facing felonies now because of denying housing so that they can take bribes to let a few things through?)
https://www.reuters.com/world/us/us-set-unveil-long-awaited-...
The best part of your response was this though: >how many LA pols are facing felonies now because of denying housing so that they can take bribes to let a few things through?
Huizar is the poster boy for this and he was taking bribes from the worst luxury condo developers of them all to build in downtown, razing the existing affordable rentals. Not to mention he went along with literally every big housing project that came his way for Boyle Heights (Vegas hotel/strippers/poker chips included or not), as detailed in "The Sellout".
I agree with you that there's a shortage, but the conversion of housing into a speculative commodity is a much bigger problem than a lack of construction, which is why there are well over 5 million vacant homes in this country (that we know of). AirBnB, Wall Street hedge funds purchasing single family homes, get rich quick flippers, are all driving the affordability problem.
https://therealdeal.com/national/2023/10/08/millions-of-home...
We need vacant units so people can move around. I guess in your perfect world there is 0% vacancy? Please, tell me, how would anyone move to a new city in that world?
yeah....
Also, rent control doesn't work. It never has. And never will.
Soon: Recursive HOA's
A group that is extremely small - and we pretend like every grandma in the world lived in a little cottage in Hollywood that's now worth $3m - and whatever would she do if she had to 1031 into rental properties and live lavishly literally anywhere else in the world.
We have to think about all the poor multi-millionaire grandmas and not the current generation that can't afford to own a home and start a family - which is a looming demographic disaster.
It's fine if your kids can't afford to live where they grew up. But it's not fine if grandma has to take a $3m windfall and move to the mountains, or Mexico, or Europe, or literally anywhere.
Have your cake and eat it, too, grandma.
This is in the site guidelines: https://news.ycombinator.com/newsguidelines.html.
I think it comes from a distaste for low-income housing.
California law requires a fraction of new developments to be low-income housing. Because Cupertino doesn't want that, but does want to build, they created low-income housing for seniors only. (Also you get priority if you've lived in Cupertino, famously-affordable Cupertino, for a certain number of years.)
TL; DR Think of the millionaire grandmas is a convenient way to dodge low-income housing requirements.
I may get a few hundred thousand from inheritance, but even that feels really unfair. Society shouldn't operate that way.
That is an optimistic spin on a situation that can play out in several ways. What you describe is the best possible outcome. Another, pessimistic, way of phrasing that is that you're kicking out grandma because she is too poor to pay the taxes. Nevermind if it's the place where she raised a family, built a house, and had an entire life's worth of memories. She should be forced to move somewhere else to make room for Hollywood producer man and his mistress?
The economic incentive to build housing and lower prices already exists. I can buy a piece of land that has 1 house on it, bulldoze the house, and then build a multi-unit condo on it (easily quadrupling the number of people who can live on that piece of land). I will make a ton of money doing that because 3 extra families can live there and all pay me for the housing. If you let this take on a city-wide basis, prices will come down. However that incentive has been effectively killed because the city has something called "zoning". Which means the city mandates exactly what is allowed to be built on each parcel of land, in excruciating detail. If you don't believe me just google "FAVORITE-CITY zoning ordinance". The vast majority of housing in cities and towns in the US is zoned as "single family" which means that even if you own a piece of land and want to build more housing, the city will not allow you. To change this you have to go to the city zoning board and ask them to change the zoning for your land. Guess who the people on that zoning board are? People who own single family homes in the city. They do NOT want to see the character of their neighborhood change, they will deny your request in a heartbeat.
So we're prioritizing the "character" of our neighborhoods instead of the people who actually live in them? That seems completely backward.
Source: I have physically tried to build housing and been stopped by the city zoning board.
Senior citizens may be a small group, but they turn up to vote.
In California - obviously prop 13 if someone in the family plans to keep the house.
As for Proposition 13/58 inheritance, note that Proposition 19 (2020) restricted the inheritance benefit to only family homes and farms, so I don’t think inheritance is a widespread benefit anymore. Proposition 19 also made the property tax basis portable, so the increasing property tax is no longer an impediment to grandma moving.
"Whoa, hold on; we should change the law on that last point!" I hear you saying. And I might even agree, but unless/until we do, grandma is doing the obviously sensible thing by not selling while she's alive.
In this case, the federal tax treatment of inherited property (problem 1) cannot be addressed by a California state-level legislature, but the latter can try to increase the supply of housing in CA (problem 2) by making ADU sales legal there.
Helping multi-million dollar inheritances built on the housing shortage dodge taxation isn't the political winner it might have sounded like on first glance?