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.
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
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.
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.
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
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
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.
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.
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,
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
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.
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
Final "land use decisions." This category includes
comprehensive plan changes, zoning changes, issuances of conditional
use permits or variances, or rural land divisions.
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.
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.
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
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
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.
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.
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
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.
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
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
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.
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.
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
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.
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
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