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Breakthroughs: Successful Local Strategies for Affordable Housing
Volume 3, Issue 1


For-rent sign in front of apartment complex

Accessory Housing is Part of the Solution


Many communities are using an old technique to provide affordable housing in single-family neighborhoods. Often referred to as in-law apartments or “granny flats”, accessory dwelling units (ADUs) provide a reliable source of affordable, conveniently located housing for many people. Cities that permit such housing, however, typically try to balance the need for this type housing with a desire to protect the residential character of the surrounding neighborhood. This article examines how different communities encourage and regulate the creation and use of this form of affordable housing.

Process Requirements

Variances and Approval Authority

Almost all communities that permit accessory housing units require the property owner to apply for a permit and be approved to renovate or construct an accessory housing unit. Cambridge, Massachusetts requires the Board of Zoning Appeal to grant a special permit for the creation of accessory housing. Sacramento County, California requires the issuance of a conditional use permit, and Ann Arbor, Michigan places the responsibility for issuing a special exception use permit with the planning commission. Seattle, Washington delegates that authority to the Director of Department of Construction and Land Use.

Most regulations also have different rules depending on the property’s zoning or use. Greensboro, North Carolina places different conditions on the creation of these units, depending on whether the original single-family house is an attached house or detached housing.

Different Regulations Within a Community

While many communities permit accessory apartments, they often restrict the types of uses permitted and also restrict the residential zones that can contain this type of housing. Charlotte, North Carolina allows accessory housing to be used as guesthouses, employee quarters, and elderly and disabled housing. Providence, Rhode lsland differentiates between accessory family dwelling units, which have kitchens, and accessory living quarters, which do not have kitchens. In Providence, accessory family dwelling units are not allowed, whereas living quarters are allowed. Knoxville, Tennessee only allows accessory units in higher density residential zones.

Continuing Compliance

In addition to obtaining permission to create the accessory unit, some communities require owners to comply with government regulations on a continuing basis. Charlotte requires the owner of elderly and disabled housing to register annually with the Zoning Administrator. Seattle; Nashville, Tennessee; and Madison, Wisconsin require approvals to be recorded in the county Register of Deed’s office.

In addition, Madison does not allow an accessory housing permit to be transferred to another person. It also requires that the alterations be removed within six months unless extended by the Director of Planning. Ann Arbor requires the owner to commence use of the dwelling within three years of approval. In addition, if the use ceases for a period of two years, permission for the use lapses, unless extended by the planning commission. Ft Lauderdale, Florida specifically forbids the use of an accessory use if the principal structure is no longer used.

Design Considerations

How Many and How Big

Most communities only allow one accessory dwelling unit to be created on the same lot as the principal unit. Indeed, Greensboro, Ft. Lauderdale, Seattle, Sacramento County, and Charlotte are among the communities that specifically limit the number of ADUs to one per lot.

Because the accessory dwelling is supposed to be subordinate to the primary single-family house, most communities limit the size of the dwelling, typically by placing a restriction on the size of the accessory unit relative to the size of the primary dwelling. Greensboro limits the accessory unit to 1,000 square feet or 30 percent of the gross floor area of the principal dwelling, whichever is less. Ft. Lauderdale has a smaller 600 square foot limit, but allows accessory units to occupy up to 49 percent of the gross floor area of the principal structure. Nashville and Ann Arbor limit the accessory space to 25 percent of the principal house. Nashville further limits the size of the unit by excluding garages and utility areas from the calculation of gross floor area of the principal dwelling. Charlotte permits accessory units to have a floor area no greater than 50 percent of the principal structure, regardless of size.

Attached to Main Residence

Communities have different standards concerning the location of the second unit. Some communities require the unit to be included within the existing structure, while others (such as Santa Clara, California) allow it to be attached or detached from the main dwelling. Charlotte permits elderly and disabled housing to be attached, within, or separate from the principal dwelling, while Seattle does not allow such flexibility.

In addition to limiting the overall size of the accessory unit, some communities limit the number of bedrooms that can be in the apartment. Ft. Lauderdale limits the unit to either a one-bedroom/one bath unit, or an efficiency unit.

Exterior Design Considerations

Most communities restrict any construction of an accessory housing unit that would alter the look of the principal residence. Ann Arbor and Greensboro forbid any alteration that would make the house appear to be a multifamily structure. Santa Clara requires that the roof, siding, and windows of the accessory unit be consistent with the design of the principal residence. Madison’s standard is somewhat less restrictive, in that the regulations state that the appearance of the building should remain “generally the same.” Sacramento County allows manufactured housing to be used as an accessory dwelling, but the manufactured home must meet certain defined architectural requirements.


Requirements regarding access also vary widely across jurisdictions. Nashville does not permit any additional entrances that would be visible from the street. Madison and Ann Arbor allow new entrances, but require that the entrance be located on the side or in the rear of the main building. Sacramento County requires that attached units share entrances with the primary unit. Charlotte also regulates the number of driveways allowed and does not permit accessory units to be served by a driveway separate from that serving the principal dwelling.

Occupancy Standards


Most jurisdictions require the owner of the principal residence to also own the accessory unit. Charlotte requires that the same person own its elderly and disabled housing units, as well as its guesthouses or employee quarters. Madison requires that the owner of the principal residence be at least 60 years old, or to be certified that they need to have a unit created for health reasons.

Occupancy Limitations

Most communities place limits on the occupancy of both the primary residence and the accessory unit. Seattle requires the property owner to occupy the main structure for more than six months each year. The City does not limit the number of related people who can occupy both the units, but does limit the number of unrelated persons to not more than eight. Charlotte’s program to offer housing to the elderly or disabled requires that the second unit be occupied by someone at least 55 years old or disabled, and that the occupant be related to the owner of the principal dwelling by blood, marriage, or adoption. Nashville restricts the occupants of the second unit to family members and also lists those who may live in the unit. Ann Arbor limits occupancy to those related by blood, marriage, or adoption.

Planning Requirements


Communities that allow accessory housing frequently require that the additional housing have adequate parking. Seattle and Santa Clara require one off-street parking space for each unit. Sacramento County requires one parking space per bedroom. Ann Arbor requires that at least 3 off-street parking spaces be provided for the principal dwelling and accessory apartment.

Minimum Lot Sizes

Minimum lot requirements vary widely. Cambridge requires that the lot be no smaller than 3,000 square feet. Sacramento County’s requirement is 5,200 square feet, while Santa Clara and Providence each have minimum lot sizes of 8,000 square feet. Providence’s minimum lot size for domestic servants’ living quarters is 25,000 square feet. Charlotte does not specify a numeric lot size, but instead requires that the lot be twice the minimum required in the zoning district in which the main dwelling is located.


Despite the rhetoric espoused by many communities that purport to embrace accessory housing as a resource for addressing the lack of affordable housing, a large number of them impose a long list of restrictions on the visual impact of the unit and its use in an effort to protect the surrounding neighborhoods. As the population continues to age and longer life spans become increasingly common, municipalities may be looking to relax some of their more stringent requirements as a means of encouraging the development of this viable form of affordable housing.

Man and woman standing in front of judge

Land Use Appeals … the Oregon Way

In 1979, the Oregon Legislature established the state Land Use Board of Appeals (LUBA) to simplify the appeals process and provide consistent interpretation of state and local land use laws. LUBA replaces circuit courts, which now no longer hear such appeals. The appeals process has the potential to ameliorate local resistance to affordable housing developments by introducing a streamlined process for reviewing decisions at the state level.

Types of Decisions LUBA Can Review

The cases that are reviewed by LUBA are restricted to the following three types:

  1. Final "land use decisions." This category includes comprehensive plan changes, zoning changes, issuances of conditional use permits or variances, or rural land divisions.
  2. Final "limited land use decisions." This category encompasses decisions concerning sites within urban growth boundaries, including urban partitions, urban subdivisions, urban site review decisions, or urban design review decisions.

  3. Under both of the above cases, “final” is defined as decisions that are put in writing. In addition, the petitioner must have exhausted all local avenues of appeal.

  4. Appellate court rulings that have significant impact on present or future land uses in the area. This category would include, for example, the construction of a major street through a residential area.

Timeframes for Action

Once the petitioner files a “Notice of Intent to Appeal”, LUBA rules require the process to continue in a timely manner. The local government (the respondent) must submit a record of action within 21 days, and the petitioner must in turn submit a petition for review within 21 days after LUBA receives the respondent’s record of action. LUBA will extend the deadlines only if agreed to in writing by all parties. The respondent then has another 21 days to answer the arguments raised in the petition for review. Oral arguments are held about two weeks after the respondent files its brief, and a decision is rendered within a few weeks after the single hearing. Failure to meet these deadlines can result in LUBA denying the appeal. The average appeal takes about six to eight months.

Cost of the Process

There are costs involved in appealing local decisions to LUBA, but these costs are often less than those associated with a judicial proceeding. While LUBA does not require individuals to be represented by an attorney, it recommends utilizing an experienced lawyer owing to the complexity of the issues at hand. Even without an attorney, however, there are expenses for typing and copying briefs and correspondence, postage, and travel.

The petitioner is also required to pay a $325 fee when initiating an appeal. The fee covers a $175 filing fee and a $150 deposit called "the deposit for costs." The petitioner receives a deposit reimbursement if LUBA rules in the petitioner’s favor. LUBA also has the authority to require that the respondent reimburse the petitioner for the $175 filing fee. If LUBA finds against the petitioner, the deposit is used to reimburse the respondent for costs incurred in preparing for the appeal. In addition, if LUBA finds that unrepresented parties have presented claims without merit, it can require them to pay the attorney fees of the prevailing party.

Mediation Available

To reduce the cost of an appeal, all parties can request that the LUBA allow them to enter into mediation. Oregon assists the mediation process by providing information on independent mediation services to the parties.

Eligible Petitioners

Oregon limits those who can appeal local land use decisions to those who initiated the action before the local body or supported or opposed the original request. There is no informal citizen participation in the LUBA appeals process. However, the Board reserves the right to allow amicus (friend of the court) briefs. At the hearing, only parties who have submitted briefs are allowed to make a short presentation.

Appeals and Work Stoppages

In order to stop development, the petitioner must request that development be halted, but those opposed to the work stoppage are also given an opportunity to respond to the request. If LUBA grants the work stoppage request, it requires the petitioner to post a $5,000 bond. If LUBA later upholds the land use decision, the bond is used to reimburse the developer for attorney fees and damages.

Reasons for Overturning a Local Decision

LUBA can take four actions in deciding the merits of an appeal. It can affirm, reverse, or remand the decision, but it can also dismiss the appeal or transfer the appeal to the courts if it determines that it’s not a land use decision. The legislature has limited the ability of LUBA to overturn a local decision by statutorily listing the types of reasons they can use to rule against the local body. Those reasons are limited to the following:

  • Local officials made procedural errors that deprived the petitioners of the opportunity to prepare and submit their cases for a fair hearing;
  • The local decision violates a Constitutional guarantee, a state law, or a local law; or
  • The local decision is not supported by evidence in the record.

Impact on Affordable Housing

The LUBA appeals process provides a mechanism for overturning local government planning decisions without the need for lengthy, expensive judicial proceedings. For those who develop affordable housing, it has the potential to be a valuable device to fight unfair or unsubstantiated opposition to new housing developments.

For more information on Oregon’s Land Use Board of Appeals, you can visit the LUBA section in the Regulatory Barriers Clearinghouse at


Close-up of pencil and tax form  

State Tax Credit Programs: Some Encouraging, Others Less So


Congress created the Low Income Housing Tax Credit (LIHTC) in 1986 to encourage private sector production of housing for low- and moderate-income households. Many in the development community claim that the state administering agencies have added to the cost and difficulty of creating affordable housing by instituting complicated and expensive application procedures for the credits. Some states, realizing the impact of these rules on small and disadvantaged developments, have revised their processes to reduce certain costs and make it easier to compete for the tax credits.

Program Features that Encourage Participation

The Internal Revenue Service, which regulates the overall tax credit program, requires each state to develop a “Qualified Allocation Plan” wherein the state lays out its plan for the distribution of tax credits to affordable housing developments. The IRS has a few mandatory requirements, but leaves the decisions regarding a number of issues to the discretion of each state. Some of the issues states have addressed in their recent QAPs that encourage participation in the LIHTC program include set-asides, developer limits, and supplemental programs.

Set asides

While federal law requires that state agencies set aside a minimum of 10 percent of their credit allocation for non-profits, many states have created specific allocations to encourage regional distribution of affordable housing, and even to promote specific types of housing development, such as smaller affordable housing communities. California sets aside 20 percent of the annual credit for projects in rural areas and two percent for projects with 20 or fewer units. It also reserves 50 percent of the nonprofit set-aside for homeless assistance projects. Missouri designates separate allocations for different regions of the state, whereas Ohio assigns bonus points in the selection criteria for certain disadvantaged areas of the state. Virginia has a number of regional set-asides and also maintains a separate tax credit pool for projects not exceeding 14 units. Illinois reserves a portion of its allocation for the rehabilitation of currently occupied housing developments, and sets over $1 million aside for projects with 50 or fewer units. That state has also created a special needs housing reservation.

Per Developer or Development Limits

Most states place limits on the amount of credits any one development or developer can receive so as to encourage broad-based participation in the program. Missouri, Ohio, and Massachusetts place a dollar cap on the amount of credits that can be allocated to any one development. Virginia limits the amount of credits to 15 percent of the state’s per capita dollar amount for any applicant or to any related applicants for one or more developments. Texas limits the number of units in a new construction development to 250 (of which 200 are rent restricted), but provides exceptions for counties with large populations.

State Supplementary Programs

Many states realize that the LIHTC program alone can not produce affordable multifamily housing, and so have created special programs to supplement the tax credit subsidy. Massachusetts, California, and Missouri allow developments that are eligible for the federal credit to access a state housing tax credit. Illinois provides a tax credit to organizations that provide donations to non-profit housing developers.

Some Program Requirements May Discourage Participation

States endeavor to award credits to those projects which are most likely to be realized. To encourage developers to submit only strong applications, most states impose requirements, such as application fees and “ability to proceed” rating criteria. While many of these requirements are well intentioned, they add to the cost of developing a project. Developers who submit proposals that do not receive credits pay these costs out of their own pockets. Recognizing that the costs associated with these requirements can discourage participation, some states have structured or reformed their application process to eliminate these financial obstacles.

Application and Reservation Fees Vary

Most state administering agencies charge developers a fee to process applications for the tax credit program. Some states have created mechanisms to reduce the impact of these costs on disadvantaged developers. For example, Missouri charges for-profit developers a $1,500 application fee but reduces the fee for non-profits to $750. Ohio has a different approach to the application fee, charging a variable rate based on the number of units in a development. The fee currently ranges from $250 for a development with 25 units or less to $1,000 for a development with 76 units or more. Authorities in Massachusetts charge non-profit sponsors and for-profit sponsors of projects with 20 or fewer units a fee of $500; all other sponsors must pay $3,000. Illinois charges developers proposing projects with more than 25 units a fee of $1,100. For projects with 25 or fewer units or those competing under the Nonprofit Set-Aside, the fee is only $500. Texas charges an application fee of $15 to $20 per unit and allows a 10 percent discount for non-profit organizations. Texas is one state that allows refunds of application fees if the organization withdraws the application during the review period. Virginia is one of the more unusual states, in that it does not require nonprofit sponsors competing in the nonprofit pool to pay the application fee until the time of the first syndication payment.

Site Control

Most states require that the developer demonstrate that it has site control. Most states recognize that the cost of acquiring a site is too high if the project fails to receive tax credits. In Missouri, Ohio, California and elsewhere, the state agency requires a recorded deed, option, and land term lease or lease option. Illinois, on the other hand, has most of these same requirements, but also gives owners the flexibility to submit other written evidence of control.


Another common requirement that often results in upfront costs is the prerequisite that the property be zoned for the intended use. California requires that all land use approvals, which are at the local government’s discretion, be in place. Oregon requires a letter from the local zoning board indicating that the land is properly zoned. Missouri’s criteria is slightly less stringent, in that it requires the local body to either rezone the land or endorse the rezoning. Ohio’s regulatory environment is among the least restrictive, with a requirement that the zoning permit residential use, but not necessarily for multifamily development.

Local Support

Many states require local support before it will process an application. Depending on the level of local support that must be secured, this requirement can be very costly. Texas requires developers to notify the school district superintendent, all members of the governing body of any municipality and county in which the development is to be located, and the state senator and representative who serve the area. Texas also requires a sign to be installed on the development site, and the application must contain a photograph of the site with the sign in place. Massachusetts’s officials require local support, but acknowledge that some entities oppose tax credit projects without good reason. While additional points in the scoring criteria are assigned for local support, Massachusetts’s officials consider applications that do not have local support if the sponsor can demonstrate substantial efforts to respond to local concerns. Another even-handed approach can be found in Virginia, which does not exclude a project that lacks local approval, but gives those with local support more points in the evaluation process.

Financial Commitments

Securing financial resources early in the development process is a necessary but often time-consuming and expensive process. Almost all states require evidence that other financing is available for the tax credit project. Illinois requires an acknowledgment letter from any lender providing funds to the development. The state permits some flexibility, however, in that the lender’s letter must only say that the application is under consideration. California requires that the lender’s final commitments be in place, but requires those commitments to represent only a portion of the total estimated financing required.


Tax credit allocation agencies are often faced with the dilemma of setting standards that result in good housing developments, but at the same time, do not hinder developments by establishing costly obstacles. Some states are addressing the problem by reducing fees and easing – or eliminating – the unintended costs of burdensome submission requirements. And while there is no ‘quick fix’ or single ‘right answer’ to the question of LIHTC application process, communities can look to the advances being made in other parts of the country for guidance in crafting a process that addresses the needs of an economically and culturally diverse constituency.


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