The White House: ADUs and The Future of Affordable Housing

The government agrees that building ADUs are the best option to provide affordable housing and maximize the income of every homeowner.

The White House, ADU and the future of affordable housing

As we've heard across the United States, there’s a widespread shortage of affordable housing, and the White House has something to say too!

By: Eliana Lerma

On February 1st of this year, the White House hosted a virtual event about the importance of building Accessory Dwelling Units to fix this housing shortage crisis. Ambassador Susan Rice begins the discussion by accepting that the United States has not produced enough housing to meet the demand of the growing nation. She addressed that finding affordable housing is hard everywhere in the U.S. particularly for the lowest income Americans. She claimed that constraints on housing supply limit labor mobility which in turn cost the economy up to 2% of Gross Domestic Product (GDP) annually, or around $400 billion. That's why, she stated, the administration has focused closely on addressing these housing challenges. 

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Why does The White house supports ADUs?

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California stands for change

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California's New Zoning Law.

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Get Financed for Your ADU

See if your property qualifies and find out what exactly you can build, including lot splits & ADUs.

Just last year, they secured a “historic level of funding” for affordable housing in the American Rescue Plan, both through emergency rental assistance and supplemental funding for home and housing vouchers. The Biden-Harris administration also continues to work to enact the Build Back Better plan, which would make critical investments in housing supply through expanded tax credits and subsidies. Last August, officials announced administrative actions that HUD, Treasury, the Department of Agriculture, and the FHFA will add 100,000 new affordable housing units over the next three years. They claimed to wish to further highlight the ways the federal government and the public, private, and nonprofit partners at the state and local levels can together overcome barriers to provide more housing.

Why does the White House support ADUs?

Building more ADUs is a clear solution to the rental housing affordability crisis. The chart below from their Pacific Northwest Survey shows that 66% of newly built ADUs are rented out to tenants making the ADU typically a long-term rental. The results of this study have held up among multiple different surveys from multiple different researchers.

Graph of most ADUs are built as rental housing

A study conducted just last month by the Urban Institute examined the potential for single-family home lots to produce more affordable housing through ADUs, increasing modular manufactured housing, or just preserving homes. Together, the findings estimate that these housing types could add 4.7 million units over the next 10 years. ADUs make up half of this potential housing supply!

Graph of Potential new affordable units on single-family lots per year

ADUs are affordable by design. Construction costs are less than 50% of a single family home and most rent for less than market rate. Another reason the government is in support of ADUs is that they address the national problem of home underutilization. This chart shows that we continue to underutilize our single family housing space as time passes and the nest empties out.

Graph of ADUs address the national problem of home underutilization

California Stands for Change!

In the next discussion, Dr. Karen Chapple addressed that from 2018-2020, California built 23,000 ADUs with 34,000 permitted and ready to be built. Chapple stated, “how this happened is a story of research, advocacy, and lots of education. But it's also the story of what can happen through state action.” The state had to make sure ADUs could be built within certain guidelines, and the state legislature had to return year after year to get the ordinance passed. This included fixing lot sizes, set-backs, impact fees, parking requirements, owner occupancy, and more.

California’s New Zoning Law

ADUs are an important component to push affordable housing that include benefits to owners, renters, and their communities. Despite their benefits, government officials address that ADU infrastructure is held back by a few barriers including local zoning restrictions, permitting processes, and a lack of financing for interested homeowners. Thanks to state action and California’s new zoning Law, Senate Bill 9, there is an exponential increase in ADUs being built on single-family dwellings. To learn more about all the lot-splitting potential with SB 9, check out this read.

 

To find out if your property qualifies for a lot-split, we offer a free SB 9 tool.

Get Financed for Your ADU

Now that zoning laws have changed, it's time to talk finance. As mentioned by one of the speakers at the White House, funding the Accessory Dwelling Unit is one of the main barriers people face when moving forward with their project. If financing is a concern for you, read more about our Customized Financial Report so you can move forward with a plan of financial security. The CFR provides solutions for common questions regarding mortgages, loans, credit score, equity, and more!

 

Accessory Dwelling Units, while one of the smallest increments of housing, can represent a big step towards filling in the gap in many neighborhoods and communities, and it's amazing to see the progress that our government is making to promote affordable housing in the United States. 

 

At Multitaskr, we are eager to guide you through the process of achieving your greatest home investment with advanced home technology and financial tools to make your project come to life. If you are interested in getting started with a project, check out our ADU catalog. For additional guidance, book a free consultation with one of our Home Solutions Experts.

See if your property qualifies and find out what exactly you can build, including lot splits & ADUs.

Five Things You Must Consider Before You Lot Split With SB 9


Here’s What You Need To Know About The New California Bill


1

Feasibility

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Design

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Cost

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Permits

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Timeline

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