As Housing Needs Grow, So Do Discussions of Accessory Dwelling Units

As Housing Needs Grow, So Do Discussions of Accessory Dwelling Units

(Crystal A. Proxmire, July 10, 2023)

Michigan – Why are more municipalities looking at the potential for Accessory Dwelling Units as part of the solution to nationwide housing shortages?

According to Ann Arbor City Planner Chris Cheng, “Accessory Dwelling Units increase the variety of housing opportunities available within the community… The addition of accessory dwelling units may increase opportunities for homeowners to ‘age in place’ in either the main dwelling unit or the accessory apartment, because the unit may be rented out to provide added income.

“Accessory dwelling units can…address declining household size.  The decline in household size is attributed, in part, to a growing population of seniors and an increase in single-person households.

“Accessory dwelling units can be more affordable than other new dwelling units…The addition of an accessory apartment can help first-time homebuyers leverage a mortgage or current homeowners retain a home after a change in financial circumstances, and ADU’s may provide an affordable rental alternative in established neighborhoods where a person might not otherwise be able to afford to live.”

Cheng spoke about Accessory Dwelling Units at a June 14 Oakland County Planners Gathering, sharing his experiences with planners and officials across the county.

As a college town, Ann Arbor has the housing needs that every metro area faces, plus the masses of students who need dwelling during the school year, putting Ann Arbor at the forefront of housing solutions.

Cheng was joined by the Planning Director of Traverse City Shawn Winter.

Rather than students in search of space, Traverse City has waves of tourism that require housing options for summertime residents, shorter term vacationers, and the and the workers needed for the shops, restaurants, hotels, and other businesses that spike seasonally.

An Accessory Dwelling Unit (ADU) is a second, smaller dwelling unit developed out of an existing single-family house (such as a basement, attic, or addition), or as a part of an accessory structure (such as a converted garage or carriage house).

In both Ann Arbor and Traverse City, residents were skeptical of adding ADUs.  The initial ordinances were restrictive and set caps on the number of ADUs approved per year.  In time the ordinances were refined to make it easier.

Concerns of residents included:

-Renting to college students

-Buildings too close to the property line

-Windows facing their windows

-Short term rentals (such as vacation rentals and AirBNBs)

-Appearance

-Wanting the owner to be living on the property

-Parking

The speakers shared advice and experiences, stating that neither community had any problems between owners and neighbors.

In Traverse City there is a requirement that owners must live on the property – either in the main home or the ADU.  While this rule provides comfort to the neighbors, it can be problematic.  In one case a family was living in a home with a renter in the unit above the garage.  But the owner is in the military and has to move out of state for three years for their service.  Now to rent the main house out, the long-term resident above the garage has been forced to move out and the apartment to remain vacant until the owner returns.

Another way ADU ordinances have evolved is that in Ann Arbor, the original ordinance required separate utility hook ups for ADUs, but they found that the added cost (around $50-$60,000) was a deterrent, so they have removed that requirement.

Another tip that came from Traverse City is requiring the ADUs to match the main home visually, such as using the same materials and styles.

One unique challenge for cities to consider is how the ADUs are assigned addresses.  Each county has their own rule for how addresses are added.   In both Traverse City and Ann Arbor, the new unit is given their own address and box.  In Ann Arbor the Building Coordinator can look at neighboring homes and pick an appropriate address.  Yet in Traverse City, house numbers are close, and the addition of a unit means all the addresses on a block may have to be changed.

Also of interest is software called Host Compliance which scrubs websites for ads for AirBNBs and rental apartments to see if any of them are unregistered.  Not only can the software track addresses, it checks pictures for identifying features so that homes without addresses can still be found.

In Traverse City, they have found ADUs that were built in the past, but did not pull permits or go through the inspection and licensing process.  “We invite them to come and be inspected and permitted,” said Winter of when ADUs are discovered.  Both cities have a daily fine for “rogue” ADUs, up to $500 per day, though assessing the fine is at the judge’s discretion and is often much smaller.

While the ordinances to encourage ADUs have continued to evolve, the cities haven’t seen a massive interest.  Since 2016, Traverse City has seen just 39 ADUs built.  Since 2015, Ann Arbor has has 89.

“There’s a cost barrier to build,” Winter said.  One project now in progress is the addition of a flat being built over the garage of a Traverse City home.  “It’s costing them $350,000 to build.”

But even though there have been challenges and barriers, the addition of ADUs has helped those residents to have a place to live in a high-demand area, and they are an added source of income to residents who chose to make the investment.

Organizers of the discussion did not know of any cities in Oakland County making efforts to encourage ADUs, but the response to the event shows there is interest across the county in local governments learning more.  If any cities are working on this, we’d love to hear from them (editor@oc115.com).

Those who want to learn more about Oakland County Planning and Economic Development visit https://www.oakgov.com/community/community-development/planning