In a 49-square-mile city with 50,000 new residents added in the last five years alone, it takes innovative solutions to create more homes within the existing housing fabric. This is especially true for our most-vulnerable community members — seniors, people with disabilities and low-income residents.
One way is via the creation of Accessory-Dwelling Units (ADUs), more commonly known as in-law units, backyard cottages, secondary units and the like. No matter what you call them, ADUs are an effective solution for adding much-needed rent-controlled apartments not just in San Francisco, but in housing-strapped California.
Whereas it takes five years for a new building to be fully constructed, an ADU within the existing structure would only take up to one year to convert underutilized spaces in the buildings. The affordable ADU is intentionally limited in rent, so that a new opportunity for low- to moderate-income tenants is made available.
When the City of San Francisco first passed legislation for ADUs a few years back, private-apartment owners quickly jumped on the opportunity to add value to their rent-controlled properties. Conversely, there were no affordable opportunities being created.
When MEDA started its Small Sites preservation program, the organization recognized this could keep current residents in place in their homes while concurrently adding affordable options in the neighborhoods where few such opportunities existed.
That’s why MEDA has recently added three ADUs to its expanding portfolio of 22 Small Sites Program properties, now comprising 187 units. The City of San Francisco Small Sites Program allows nonprofits, such as MEDA, to purchase four- to 25-unit apartment buildings with residential and commercial tenants vulnerable to eviction.
MEDA’s current plan calls for seven ADUs, as follows:
- 1411 Florida (one ADU; completed)
- 305 San Carlos (two ADUs; completed)
- 4830 Mission (two ADUs planned)
- 642 Guerrero (one ADU planned)
- 1500 Cortland (one ADU planned)
This is generating impact: You can think of these seven units as the equivalent of a brand-new affordable-housing property.
It is important to note that just one of MEDA’s Small Sites Program properties has an elevator, with 21 being walk-ups as is typical of the Mission’s rental stock. This can lead to issues for elderly or disabled tenants.
Streamlining the ADU process
The process to create an ADU currently takes up to a year, from initial San Francisco permitting to construction to close-out permitting. MEDA is working with the City to streamline this process.
MEDA’s Community Real Estate construction managers were part of the research on behalf of the Mayor’s Office of Housing and Community Development (MOHCD) Small Sites Program and the San Francisco Housing Accelerator Fund (HAF); this research was conducted by Talor Wald, a San Francisco Fellow. The research outlines hindrances to ADU construction in Small Sites properties — and how to solve this challenge.
MEDA’s input was used to determine means of reducing schedule delays and ADU construction costs so that the Small Sites Program can fund additional projects, preserve more affordable housing and construct all the more ADUs. Achieving this goal requires: demystifying the ADU permitting and construction process; locating delays and cost increases in the permitting and construction process; and determining process improvements for the Small Sites Program and nonprofit developers.
Opportunities for creating more quality, sustainable affordable housing
When MEDA purchased 305 San Carlos in the Mission, the team saw an immediate opportunity: The creation of a pair of ADUs from the existing four garage spaces. MEDA Construction Manager Sara Lope (photo) was charged with supervising the work.
One larger unit was created out of three of the garage spaces (photo), with a full kitchen, one bedroom, a bonus room and one bath. A second smaller unit came to life from just one garage space, showcasing how creativity can lead to a new home, albeit a small one.
“The smaller unit definitely works for one person. The larger unit is a decent size for the Mission and offers an excellent living space,” says Lope.
Both units also meet Title 24 standards, based on calculations of energy efficiency of the apartment.
Now with a new sidewalk and a pair of trees planted on San Carlos, these units are ready for rental.
What is next in affordable ADUs
What MEDA has learned over the last two years has been instrumental in developing a model for affordable ADUs. That’s why MEDA supports a bill, co-sponsored by supervisors Gordon Mar and Vallie Brown, that would incentivize single-family homeowners to create affordable ADUs in their properties. Just two weeks ago, a supervisors’ committee voted to make it less expensive to build more in-law apartments in garages and elsewhere as affordable units. Interestingly, single-family homes account for 27 percent of all housing units in San Francisco, but take up 62 percent of the city’s residential land. (Source: San Francisco Housing Needs and Trends Report, July 2018, Planning Department.)
MEDA is also researching bridge financing sources for the preconstruction and construction period of the ADUs. Currently with the first mortgage and local funding for the buildings, bridge financing would have to be a junior loan or equity. Alternative sources would allow developers to develop the ADUs without refinancing the property. When the ADU is completed and the property is stabilized with the new tenant households, the property can be refinanced.
“Our goal has been to preserve affordable housing, while also ensuring that these are quality units. ADUs are an impactful solution to both creating affordable housing and providing homes for seniors and those with disabilities,” explains Associate Director of Community Real Estate Johnny Oliver, who spearheads the Small Sites Program at MEDA. “The ADU solution is a more rapid response than building new apartments. We have many other of our Small Sites Program seniors interested in ADUs, so we look forward to there being funding to create all the more such units moving forward.”
MEDA offers thanks to those who have offered invaluable insight into creating ADU solutions in San Francisco, including: the San Francisco Mayor’s Office of Housing and Community Development (MOHCD), especially Supervising Construction Manager Erin Carson; and the San Francisco Planning Department, with major assistance provided by Team Manager/Preservation Leader Marcelle Boudreaux and Housing Implementation Planner Carly Grob.