ADUs Can Rebuild The American Dream

Greeting neighbors and welcoming guests are my simple joys of living in a community. These experiences are new to me because, for the first time ever, I am living alone in a single-family neighborhood.

My home is a thoughtfully designed 390 sq ft accessory dwelling unit (ADU) with its own front yard, backyard, and street address. There is enough storage for my belongings, room for my thinking, and grass for the dog I want to adopt.

Prior to 2016, it would have been illegal to build the dwelling I call a home. 

Since then, California has implemented state-wide zoning reform to allow ADUs to be built by-right as a rental or for family members, but not for sale. 

In 2022, over 18,000 ADUs were completed, but they remain elusive. They hide in backyards or masquerade as garages. They are talked about but rarely experienced. 

Shortly after I settled in, I began welcoming guests, hosting tours, and organizing open houses. As many as ten at a time have stood in my kitchen, sat on my couch, and shared their stories.

Visitors ranged from curious neighbors to fellow ADU owners. From adults with aging parents, to parents with young adults. From nonprofits and government officials to builders and investors.

People seeking ADU solutions are as frequently homeowners as they are renters, and the problems are felt across generational divides and income brackets. 

In short, we need more housing for everyone and our mothers.

For example, there was a single mom whose son had just graduated from college and moved out of state. Her three-bedroom home has more space than she needs. Her vision is to build an ADU for herself, rent the primary home to a family member, and occasionally travel while knowing her living expenses are covered.

This is also an example of another challenge felt across generational divides, which is that people want to remain in the neighborhoods where they have built a life. 

People shared stories of seniors who can no longer go up and down their own stairs. In order to gracefully age in place, they are considering building an ADU for themselves while they rent their primary home to help pay for care. 

There were multiple young adults who couldn’t afford to buy a home close to their families, so their parents were looking to build an ADU. The joke became that it is better to call your parents your landlord than your roommate. 

These examples also capture another trend, which is that 61% of households are one or two people. 

Yet, at least 83% of Single Family Homes are three bedrooms or larger. This means recent graduates, empty nesters, widows or widowers don't have right-sized options.

Building ADUs provides the double benefit of increasing the housing supply and freeing up the current supply of homes for larger families that need the extra space.  

The shortage of available housing is the primary driver of rising costs. In 2011, 85% of Sacramento’s housing supply was affordable to someone making an average salary. By 2020, it was only 39%.

Since 2022, rising interest rates have diminished a home buyer’s purchasing power. A $500,000 home purchased with 20% down and a 3% interest rate would have a mortgage payment of $1,686, but with 8% interest rates, the payment is $2,935.

It's time to take action. Let’s build ADUs as starter homes. 

They are easy to build. My ADU only took 30 days to permit, and it arrived fully furnished before being set on a foundation in a single day.

There is plenty of space. Sacramento has over 150,000 properties with more than 2,000 sq ft of backyard area, and 80% of those are within half a mile of transit.

They could unlock value.  A current homeowner who builds an ADU for sale could earn a profit while providing the opportunity for another to build equity.  

The state of California has taken the first step by passing AB 1033 (Ting) in 2023. 

AB 1033 has the potential to enable an ADU to be sold separately from the primary home, but local agencies need to adopt it first in their city or county. So what can you do?

If you believe that homeownership should be more attainable, raise your voice in support. 

If you have extra space in your backyard, build!  

The next time someone says, “Housing is so expensive, but what can we do?”.

Let them know that we can revive the American Dream, one ADU starter home at a time.