Consider the accessory dwelling unit (ADU). It is a structure of many names, including secondary dwelling unit, garage apartment, granny flat, backyard cottage, casita, carriage house—the list goes on. The unit has equally as many uses: rentable occupancy, (secret) Airbnb gem, guesthouse, or extended family annex. Over the past decade, as housing costs have soared in cities like Austin, the casita has become a much-studied and proliferated phenomenon.
The ADU frenzy is not unique to Austin. The format is popular in other cities like Houston, Texas, or Sydney, Australia, which was, as of the end of 2015, churning out a hundred “Fonzie” flats a week. Portland (1,300 as of 2013) and Seattle (1,396 as of 2015) both established city pathways for creating secondary units. Across the border in Vancouver, 35 percent of all single-family residences have one. The back house represents an important option for low-impact densification, as it increases lot inhabitation and generates rental income but, due to its street invisibility, leaves the character of a neighborhood intact.
Austin’s ADU construction is widespread: 750 permits for “secondary apartments” have been issued since 2006, with the annual number of permits for these auxiliary units surpassing those for duplexes since 2014. Still, the structures are limited to multifamily and some single-family zonings, including SF-3, which carries a minimum lot size of 5,750 square feet, a maximum building coverage of 40 percent, and usually requires expensive infrastructural items like a separate water meter.
Austin’s ADU regulations were updated in November 2015, making it easier to build closer to primary structures, on smaller lots, and without parking in central, transit-adjacent areas. The ordinance also prohibited the use of the dwelling as a non-owner occupied short-term rental (STR), and restricted STR usage generally to 30 days per calendar year. Ahead of the new ordinance, local organization Austinites for Urban Rail Action (AURA) “dedicated to a vision of an Austin where everybody is welcome and everybody’s interests matter,” advocated for allowing ADUs everywhere in the city, and circulated an online petition that gathered over 1,000 signatures in support. Its “ADU City” report, released in June 2015, offers policy provisions and case studies in support of ADU growth. Via email, AURA board member Eric Goff stressed the importance of growing the housing supply and simplifying the permitting process. “Rules like unit caps, lot size, Sub Chapter F, FAR, building height, set backs, and others,” he wrote, “consistently make it difficult to add more housing.”
Here, house prices and rental rates continue to climb while income remains stagnant. The ADU, even in limited deployment, becomes useful in gentrifying neighborhoods, as its rental income balances out rising property taxes for families on low or fixed incomes. In a June editorial, city council member for East Austin’s District 3, Sabino “Pio” Renteria, said that he and his wife were only able to remain in their home because they built a secondary unit to supplement their income. These units, when rented at market rates, are largely occupied by younger individuals or couples who can afford to trade space and dollars for location. This doesn’t explicitly offer housing for lower-income renters, but it reduces market competition for cheaper units, allowing those units to be occupied by those who need them most. And it creates a revenue stream for those who are struggling to keep their homes, critical in areas like East Austin, where neighborhoods have lost 34 percent of their homeowners since 2002.
Substantial evidence demonstrates the myriad positive impacts of the ADUs. Their adoption is the goal of the Alley Flat Initiative, a collective effort started in 2005 by the University of Texas Center for Sustainable Development, the Guadalupe Neighborhood Development Corporation, and the Austin Community Design and Development Center (ACDDC). The outfit provides resources, including design services, to citizens, neighborhood groups, and nonprofits interested in building ADUs. To date, it has realized five units, with two under construction and about nine in development. In mid-June, it hosted the first-ever Alley Flat Tour, showcasing the five completed units with over one hundred attendees. Nicole Joslin, who recently took over as executive director of ACDDC, said, “the biggest hurdles are access to financing and making the property taxes calibrated to the rent that’s being collected.” For example, an ADU built and rented through the City of Austin’s S.M.A.R.T. (safe, mixed-income, accessible, reasonably priced, transit oriented) Housing Policy that caps incomes for its renters is not recognized as affordable housing by Travis County and is appraised for market value, instead of the income generated, which is the typical indicator for multi-family property taxes. “Banks don’t know what to do with ADUs,” Joslin continued, noting conflict if the structure increases or decreases property value. Further, local house appraisers struggle with ADUs, sometimes grouping the square footage together with the main house or ignoring the unit altogether. “We’ve overcome a lot of the LDC barriers,” she said. According to Joslin, what is needed now are additional subsidies to lower the cost of construction and, as ADU requirements are relaxed, incentives to retain the primary house. Moving forward, she hopes to continue to build ACDDC’s “capacity to be a resource for their community partners and single-family homeowners who are trying to prevent displacement.”
High-design versions of the granny flat showcase its possibilities for architectural achievement. This year, AIA Austin presented a Design Award to For A Better Architecture (FAB) for its Hillmont Studio, an 850-square-foot back house in the Zilker neighborhood. The unit was also featured on the 2015 AIA Austin Homes Tour, along with another alley flat. FAB cofounder Patrick Ousey, AIA, said the challenge was to create a sense of privacy while still maintaining a connection to the street. The massing is pushed into the lot’s back right corner, and because the spaces “don’t stack exactly one over the other,” the overhanging bedroom hovers over the glassed-in living area and patio. Clad in thin black Hardie siding, the project also includes walnut cabinets, clean detailing, and an interior-exterior concrete wall that was “brought into the budget without increasing overall cost.” This materiality connected the interior to the site walls, tying together the entry movement from the curb all the way back to the ADU. The project cost about $200 per square foot, including landscaping. Ousey reported a normal permitting experience, though the water meter became a problem. Adding an additional meter can cost up to $20,000, a fee that “makes a small project like that not doable.” FAB is at work on another residence with a back house that is similarly sited for privacy. Big or small, the design work “boils down to quality,” Ousey said, and “quality comes at every budget.”
Granny flats occupy the lighter end of the “missing middle” housing density spectrum that is painfully absent in Austin. The ADU joins a larger set of housing solutions in development to keep Austin affordable. In early June, the city unveiled a draft of its first-ever housing plan. The Austin Strategic Housing Plan, available online, offers progressive solutions to make up the current deficit of affordable units by producing 35,000 units for those at 80 percent median family income—$62,250 for a family of four in Travis County this year—and 40,000 market-rate units for a total of 75,000 units in the next decade. The plan provides an arsenal of tactics: Tax Increment Financing (TIF), the expansion of homestead preservation districts, expanded density bonus programs, a strike fund that would be used to purchase and maintain existing multifamily complexes, expanded use of community land trusts (CLTs), renovation of the S.M.A.R.T. Housing program, and many other bold ideas. Even without policies available to other cities—Texas is the now only state where inclusionary zoning is illegal—these tools forecast admirable gains.
City of Austin senior planner Jonathan Tomko said that there is “two-pronged” reform at work, on both the policy and code fronts, and that maximum progress happens when the two work together in tight coordination. The policy battle is well underway, as is CodeNEXT, the effort to fully rewrite Austin’s Land Development Code. CodeNEXT is led by its main consultant, Opticos Design, a Berkeley-based outfit focused on walkable urban living and the “missing middle” housing movement. The city now estimates draft code to be delivered for public review in January 2017, and has released two of four prescription papers that preview strategies. The Household Affordability document, delivered in April, lays out the changes that are coming soon.
Some believe that the promised results of the CodeNEXT rewrite may not be enough to reverse Austin’s economic segregation, now rated at the worst in the nation. John Henneberger, winner of a 2014 MacArthur Genius grant and co-director of the Texas Housers nonprofit, wrote in a May 2016 blog post that “Austin must promote, as a public policy, economic and racial diversity across all neighborhoods and should reject the ghettoization of affordable housing into city-designated districts,” referencing the strategy to concentrate investment at transit-rich nodes. Speaking to the AIA Austin audience in June, Henneberger emphasized the rights of low-income citizens and argued for reform at the neighborhood level, including leveraging solutions like community development corporations (CDCs) to create affordable housing. Such activism remains important work as inequitable policies persist—evidenced by a 2015 Texas bill that allows landlords to discriminate against renters who use housing vouchers. Contemporary studies show that “laws aimed at things like ‘maintaining neighborhood character’ or limiting how many unrelated people can live together in the same house contribute to racial segregation and deeper class disparities,” according to The New York Times. Affordability is increasingly the central topic at city council: An additional fair housing initiative was approved in June, providing yet another referendum in support of consequential action.
This action is needed if Austin is to realize the big changes envisioned in the Housing Plan and CodeNEXT rewrite. Thankfully, many individuals and groups are up to the challenge. At the Alley Flat Initiative, Joslin is focusing future work on the financing of ADUs, and on neighborhood-scale sustainability efforts “more and more—this isn’t about architecture only.”
For Tomko, the goal is to have the housing plan approved by the end of 2016 as an appendix to Imagine Austin, the city’s comprehensive plan: “all types of housing for all types of people in all parts of town.”