How Accessory Dwelling Units (ADU's) can Lower Housing Costs and Support Aging in Place in Honolulu
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Transcript of How Accessory Dwelling Units (ADU's) can Lower Housing Costs and Support Aging in Place in Honolulu
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How Accessory Dwelling Units (ADU's)can Lower Housing Costs and support
Aging-in-Place in HonoluluQuestor Lau
August 2011Engineers and Architects of Hawaii
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OUTLINE
How Honolulu builds Housing Govt performance
Large Developers The Community
Aging-in-Place Cheaper to stay put Multigeneration living
Show Me the Money Potential of ADUs Illegal Dwellings Units Data from Sewer bond If we do nothing scenario
The Solution of the Many
Watch ADU video:http://www.youtube.com/watch?v=LlDb2iG5p04
Not innovativeNot NewHow it fits in Honolulu
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To be heard byZoning & Planning Committee,
Sept 01, 2011 (hopefully)http://www4.honolulu.gov/docushare/dsweb/Get/Document-115333/659r2dkm.pdf
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Govt
Homeowner
Community
win-win-win
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How Govt builds Housing Requires huge subsidy Slow (takes several years) Development difficult, even when land is donated
(ie. Jeff Stone Hawn Home Lands) statewide need approximately 23,000 affordable
and workforce housing units*
Market forces, alone, will not deliver necessaryhousing**SOURCE: The Hawaii Housing Policy Study, 2006 Update
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http://hawaii.gov/dbedt/main/about/annual/2009-reports/2009-hhfdc.pdf
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5,000 homes maybe
http://www.koaridge.com/assets/KR_masterplan_map.jpg
How Large Developers build Housing
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Koa Ridge (Castle & Cooke)
Timeline for Castle and Cookes Koa Ridge development: http:// www.koaridge.com/3/the-master-plan
Year 1: -0- homesYear 2: -0- homesYear 3: -0- homesYear 4: -0- homesYear 5: -0- homesYear 6: -0- homesYear 7: start
building
5,000 new dwellings, butstarting after year 7 (maybe!)
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11,750new homesmaybe
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How the Community Builds Housing The Great Recession: 2009-2010
Garage to Bedroom Conversions Convert Patios to living area
Urban Infill Land / New Development too Expensive Additions Alterations
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Why the Community Builds Housing Need Money
Renter helps pay the Mortgage Living with Strangers preferable to foreclosure
Save Money
Build for Family moving back in Less Cost
Interior Alterations vs Addn: w/in footprint/roofline No Land acquisition costs
Value Increase Home Equity (higher appraisal value) refinance or
reverse mortgage 2nd Unit Ability desirable resale
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MLS Realtor Descriptions(Homes suspicious for Illegal rentals)
3 separate entrances ; 4 bdrms/2 bth upstairs , 4 bdrms/1.5 bth downstairs ,and 2 bdrms/1 bth in back house. Great for large families or Investorsw/rental income.
Spacious classic 3 bedroom home with 2 bedroom basement unit. Perfect formulti-generational family or extra rental income .
permitted addition w/full bath & own washer/dryer-great rental or mother-inlaw quarters
Second kitchen is non-conforming 3/2 upstairs & 1/1 downstairs with wet bar , ideal for studio rental or multi-
family Upstairs apartment could be incorporated into main house or used foradditional family members or rental income. 3/1 upstairs and 3/1 downstairs, with separate entrances. 3/2 up with study & 2/1 down with 1 individual. 3 separate entrances
possible for extended family.
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Single-Family Homes Sold, 2010
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What the pattern tells us Need-based, Demand driven behavior
Response to high cost of living Need for Multigenerational Living Need for Aging-in-Place People will build/rent/occupy illegally in the absence of a
legal alternative Use vs structure, difficult to enforce Defn of kitchen
Controlling USE is difficult Use is invisible How it is used vs What it is Cannot determine from
exterior appearance
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Incentivizing Bad BehaviorOhana Dwelling Min lot size Limited by infrastructure Occupancy: family only
Sewer fee: $5,541 Attached 2 additional stalls reqd 2nd Kitchen: OK
Rec Room (illegal rental) Any lot size Not limited by Infrastructure Occupancy: illegal; often rented
No sewer fee Attached or Detached Addl parking may not be reqd Bar Area: often illegal kitchen
Drawings from Santa CruzADU Manual
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The Compromise:Accessory Dwelling Units (ADUs)
Rec Rooms ( rented illegally ): most benefits, least restrictions
Ohana Units: most restrictions, same benefits + most fees
Proposed ADUs Hybrid Ohana+Rec Room Makes legal units, easy help ease housing affordability Built/Paid for/Maintained by private sector
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Accessory Dwelling Units Legal 2nd unit on Resid zoned land Full Kitchen, OK Rent to non-family, OK Separate Entry, OK Attached or Detached Owner-Occupied +1 Parking stall per bedroom
Already legal on Maui Endorsed by HUD, EPA, Joint Center for Housing Studies at Harvard
(JCHS), AARP
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100%
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Maui(ADUs)
vs
Honolulu(Ohana)
Honolulu can improve!
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Honolulu Building Permits(Ohana)
Mar 15, 2006: City lifts size limitations on Ohana units (ord 06-15) ;has little/no effect on # Ohana permits issued.
Increase in quality (price per unit), not quantity Relo Permits = Ohana Permits
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Honolulu Building Permits(Ohana)
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# of Units
Permittedover Time(annual)
2005 trendline
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Backside of your BWS bill
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2,000 existing Ohana Unitsx $68.39 per Dwelling Unit (BWS bill)x 12 months$1.6 Million/year
in re-occurring (not one-time)BWS fees
Sewer fees generated byexisting Ohana Units
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How many ADUs can we expect?
When Ohana Units 1st
legalized in1982, they accounted for 25% of allnew residential permits .
It was a slow year for single -familyconstruction on Oahu in 1982-83.
However, in the programs first year of implementation, ohana units comprisedroughly one-fourth of all single familyconstruction. Without the ohana zoningprovisions, these units probably would not
have been built. Theoretically, about 45acres of additional land would have beenrequired had these additional units beenconstruction in a typical subdivision.
SOURCE: Ohana Housing: A Program Evaluation, C&C of Honolulu,1981.
Mayor Eileen Anderson
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SOURCE: City and County of Honolulu Wastewater System Revenue Bond Senior Series 2010
SFD Demo/Rebuilt vs New
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Illegal Dwellings San Francisco Building Dept: 8% But In the mid -1980s approximately 10 to 15% of the dwellings had
an illegal secondary unit . Given the current housing shortage and highrents, it is quite likely that the creation of new unauthorized units iscontinuing, but at what rate is unknown.
Per US Census Bureau: 190,512 SFD/TFDs in Honolulu x 8% illegal 2nd units (15,241units)x $68.39 BWS monthly fee/dwlg unit
$1,042,329 Addl Sewer Revenue/Month
Per Wastewater Bond Prospectus:136,240 Legal SFD/TFD units
x $68.39 BWS monthly fee/dwlg unit$9,317,454 Monthly Sewer Base Charge
Legalizing illegal 2nd units would increase Monthly Sewer Base Chargecollected from SFD/TFDs by 11%
SOURCE:http://www.spur.org/documents/secondaryunits.pdf ; US Census Bureau
http://www.spur.org/documents/secondaryunits.pdfhttp://www.spur.org/documents/secondaryunits.pdf -
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SOURCE: City and County of Honolulu Wastewater System Revenue Bond Senior Series 2010
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Economic Recovery
Dept of Planning & Permitting:15,000 Ohana Eligible properties
If every one of these added a 2 nd unit: $68.39 per month x 15,000Potential ADUs =
$1,025,850 /month re-occurring revenue
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ADU / SFD / 201H
25% Est. Adoption Ratex 750 New SFDs in 09
187 Est. New ADUs
COMPARATIVELY: 187 ADUs 221 new SFDs 176 units at Holomua
(Kalakaua and Beretania)
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Govt needs new source of revenue
- new fines, fees, taxes more laws that stifle growth and development affordable housing backlog Seniors need greater assistance (health and housing)
Homeowner builds illegal rentals safety concerns (fire) income non -reported forlife of structure often builds w/o permitor other energy efficiencyupgrades
Community housing costs > 30% income high care home cost, bed shortage illegal rentals continue usingroads, sewer, trash services withoutcontributing fair share of taxes/fees
Do Nothing Scenario:
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Govt increase revenue
- GET (rent, builders/designers, financing,- property taxes- permit fees
- sewer fees no new taxes more affordable housing policies favor growth and urban renewal
Homeowner rental income depend less on govt subsidies pay for upkeep/repairs security live-in companion trade for services
Community
affordable rentals in town neighborhood diversity supports multigenerational living supports aging -in-place
ADUScenario:
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ADUs and Aging-in-Place ADUs support Multigenerational living (separate
unit, legal 2 nd kitchen) Aging-in-place is least expensive option Dont want to move, cant pay for Long Term Care
ADU gives option for caregiver to live on property Added security / comfort
Added rental income: Cash flow Pays for future repairs/upkeep & accessibility retrofits Supplements fixed income Hedge against future inflation
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ADUs and Seniors
2007 Executive Office on Aging report: 74% of people 60+, are homeowners
Seniors prefer to stay put Grab bars, ramps, widen hallways, ramps
Aging in an aging home Design ADU for accessibility (visitability, no-step entry) Fall prevention / accessible retrofits cost money Alteration Cost vs Care Home monthly costs
Less costly option to institutional care But Family / Caregiver support is crucial
Less likely to take on illegal rental Risk averse
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Housing Affordability
Owner-occupant prefer good tenant(stable/quiet) vs higher rent
exchange services for reduced rent ie caregiver or household chore assistance
Provide more rental units, w/in Urban Core Increase supply to meet demand Help ease tight rental market conditions
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Aging-in-Place w/in community
Scattered throughoutcommunity vs concentrated
Greater independence / control Comfortable environment Pets OK
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Bonus Spillover Effects All new construction will be Energy Efficient
(roof/wall insulation, low-e windows) Reoccurring govt revenue
GET from rental income Sewer fees Property Taxes Boost Construction/Finance industries
One-Time govt revenue GET from design/construction, financing Permit fees
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the Solution of the Many:Unity of purpose
achieved thru[diversity]
of the community.
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Accessory Dwelling Units (ADUs) are onecomponent, a first step, towards improving housing affordability
of our great city.In setting policy, the power of the private homeowner is oftenoverlooked as government tends to focus on larger projects of several hundred acres of land or thousands of homes. But that
can take decades to develop, whereas the individual homeowneris more often ready, willing and able to take on small scalealterations and additions that can add dwelling units to a
neighborhood, right now! Sprinkled throughout a community,housing capacity can be added without government subsidy,
requiring no ongoing maintenance or management on the partof the government.
Affordable Housing has never looked this good!
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Thank you for listening!
[email protected] Workshop: 942-1798
ALLKINDS.org
mailto:[email protected]:[email protected]