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What to do about not enough housing?

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The population of California is growing and there are just not enough homes to accommodate all the folks who want to live in our fair state. It is reported that 3.5 million more homes are needed by 2025 to keep up with demand, 12,000 units a year just in San Diego County. What’s the state to do?

Build more housing appears to be a no-brainer. But it’s not as simple as that. The shortage of land, cost of land, re-zoning complications and other governmental obstacles are standing in the way or at least delaying plans. As the need for housing grows the pace of building lags behind, especially of affordable housing. It makes you think of that famous scene in the I Love Lucy show where the chocolates on the assembly line come faster and faster and Lucy just can’t keep up.

For an immediate remedy, enter the granny flat. A granny flat is a housing unit built as accessory housing on the site of a primary home. The name comes from the fact that these units were often provided for extended family members of the main homeowner. But these units are not always let to family, and in many cases they are rented to unrelated persons whose rent aids the primary homeowner in meeting the housing cost.

Many of the granny flats in existence do not comply with existing city health and safety codes, and bringing them up to code would involve a significant investment by the lessor. In 2014 the city of Encinitas, in an effort to legalize granny flats, invited homeowners to convert their granny flats into legal homes. Only six individuals applied for the program as it required homeowners to provide sprinklers, parking, and other upgrades to these units.

Surely, legalizing granny flats is but a drop in the ocean, and only a band aid to the problem of insufficient affordable housing. It has the virtue, however, of being a quick fix, and this is what motivated the city of Coronado to pass SB1069, a law making it easier for homeowners to build a granny flat. If the main house does not have sprinklers, the law does not require them in the flat; new water and sewer fees are waived, and the parking requirement is not applied if the unit is within a half mile of public transit or in a historic district. Permits are awarded in 90, no longer 120 days, and the size footprint has been increased from 700 to 1,200 square feet.

Granny flats may help a few, but we all know what the state needs are significant new housing units, preferably linked to public transportation. Making these units affordable probably requires government subsidies, but the upsides are significant. According to a report from the McKinsey Global Institute, the state loses $140 billion in GDP due to lack of housing, and think of what all those construction jobs could do for California’s workers.

The report says that New York added 80 percent more housing units than California from 2009 to 2014 relative to population growth. Come on California, rise to the occasion and get to work. Granny flats are nice, but they won’t tackle the problem. Let’s get building!



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Posted by on Nov 10, 2016. Filed under Real Estate, Bottom Highlights. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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