how accessory dwelling units (adu's) can lower housing costs and support aging in place in honolulu

8/6/2019 How Accessory Dwelling Units (ADU's) can Lower Housing Costs and Support Aging in Place in Honolulu

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How Accessory Dwelling Units (ADU's)can Lower Housing Costs and support

Aging-in-Place in HonoluluQuestor Lau

August 2011Engineers and Architects of Hawaii


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OUTLINE

How Honolulu builds Housing Govt performance

Large Developers The Community

Aging-in-Place Cheaper to stay put Multigeneration living

Show Me the Money Potential of ADUs Illegal Dwellings Units Data from Sewer bond If we do nothing scenario

The Solution of the Many

Watch ADU video:http://www.youtube.com/watch?v=LlDb2iG5p04

Not innovativeNot NewHow it fits in Honolulu


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To be heard byZoning & Planning Committee,

Sept 01, 2011 (hopefully)http://www4.honolulu.gov/docushare/dsweb/Get/Document-115333/659r2dkm.pdf


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Govt

Homeowner

Community

win-win-win


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How Govt builds Housing Requires huge subsidy Slow (takes several years) Development difficult, even when land is donated

(ie. Jeff Stone Hawn Home Lands) statewide need approximately 23,000 affordable

and workforce housing units*

Market forces, alone, will not deliver necessaryhousing**SOURCE: The Hawaii Housing Policy Study, 2006 Update


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http://hawaii.gov/dbedt/main/about/annual/2009-reports/2009-hhfdc.pdf


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5,000 homes maybe

http://www.koaridge.com/assets/KR_masterplan_map.jpg

How Large Developers build Housing


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Koa Ridge (Castle & Cooke)

Timeline for Castle and Cookes Koa Ridge development: http:// www.koaridge.com/3/the-master-plan

Year 1: -0- homesYear 2: -0- homesYear 3: -0- homesYear 4: -0- homesYear 5: -0- homesYear 6: -0- homesYear 7: start

building

5,000 new dwellings, butstarting after year 7 (maybe!)


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11,750new homesmaybe


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How the Community Builds Housing The Great Recession: 2009-2010

Garage to Bedroom Conversions Convert Patios to living area

Urban Infill Land / New Development too Expensive Additions Alterations


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Why the Community Builds Housing Need Money

Renter helps pay the Mortgage Living with Strangers preferable to foreclosure

Save Money

Build for Family moving back in Less Cost

Interior Alterations vs Addn: w/in footprint/roofline No Land acquisition costs

Value Increase Home Equity (higher appraisal value) refinance or

reverse mortgage 2nd Unit Ability desirable resale


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MLS Realtor Descriptions(Homes suspicious for Illegal rentals)

3 separate entrances ; 4 bdrms/2 bth upstairs , 4 bdrms/1.5 bth downstairs ,and 2 bdrms/1 bth in back house. Great for large families or Investorsw/rental income.

Spacious classic 3 bedroom home with 2 bedroom basement unit. Perfect formulti-generational family or extra rental income .

permitted addition w/full bath & own washer/dryer-great rental or mother-inlaw quarters

Second kitchen is non-conforming 3/2 upstairs & 1/1 downstairs with wet bar , ideal for studio rental or multi-

family Upstairs apartment could be incorporated into main house or used foradditional family members or rental income. 3/1 upstairs and 3/1 downstairs, with separate entrances. 3/2 up with study & 2/1 down with 1 individual. 3 separate entrances

possible for extended family.


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Single-Family Homes Sold, 2010


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What the pattern tells us Need-based, Demand driven behavior

Response to high cost of living Need for Multigenerational Living Need for Aging-in-Place People will build/rent/occupy illegally in the absence of a

legal alternative Use vs structure, difficult to enforce Defn of kitchen

Controlling USE is difficult Use is invisible How it is used vs What it is Cannot determine from

exterior appearance


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Incentivizing Bad BehaviorOhana Dwelling Min lot size Limited by infrastructure Occupancy: family only

Sewer fee: $5,541 Attached 2 additional stalls reqd 2nd Kitchen: OK

Rec Room (illegal rental) Any lot size Not limited by Infrastructure Occupancy: illegal; often rented

No sewer fee Attached or Detached Addl parking may not be reqd Bar Area: often illegal kitchen

Drawings from Santa CruzADU Manual


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The Compromise:Accessory Dwelling Units (ADUs)

Rec Rooms ( rented illegally ): most benefits, least restrictions

Ohana Units: most restrictions, same benefits + most fees

Proposed ADUs Hybrid Ohana+Rec Room Makes legal units, easy help ease housing affordability Built/Paid for/Maintained by private sector


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Accessory Dwelling Units Legal 2nd unit on Resid zoned land Full Kitchen, OK Rent to non-family, OK Separate Entry, OK Attached or Detached Owner-Occupied +1 Parking stall per bedroom

Already legal on Maui Endorsed by HUD, EPA, Joint Center for Housing Studies at Harvard

(JCHS), AARP


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100%


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Maui(ADUs)

vs

Honolulu(Ohana)

Honolulu can improve!


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Honolulu Building Permits(Ohana)

Mar 15, 2006: City lifts size limitations on Ohana units (ord 06-15) ;has little/no effect on # Ohana permits issued.

Increase in quality (price per unit), not quantity Relo Permits = Ohana Permits


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Honolulu Building Permits(Ohana)


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# of Units

Permittedover Time(annual)

2005 trendline


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Backside of your BWS bill


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2,000 existing Ohana Unitsx $68.39 per Dwelling Unit (BWS bill)x 12 months$1.6 Million/year

in re-occurring (not one-time)BWS fees

Sewer fees generated byexisting Ohana Units


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How many ADUs can we expect?

When Ohana Units 1st

legalized in1982, they accounted for 25% of allnew residential permits .

It was a slow year for single -familyconstruction on Oahu in 1982-83.

However, in the programs first year of implementation, ohana units comprisedroughly one-fourth of all single familyconstruction. Without the ohana zoningprovisions, these units probably would not

have been built. Theoretically, about 45acres of additional land would have beenrequired had these additional units beenconstruction in a typical subdivision.

SOURCE: Ohana Housing: A Program Evaluation, C&C of Honolulu,1981.

Mayor Eileen Anderson


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SOURCE: City and County of Honolulu Wastewater System Revenue Bond Senior Series 2010

SFD Demo/Rebuilt vs New


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Illegal Dwellings San Francisco Building Dept: 8% But In the mid -1980s approximately 10 to 15% of the dwellings had

an illegal secondary unit . Given the current housing shortage and highrents, it is quite likely that the creation of new unauthorized units iscontinuing, but at what rate is unknown.

Per US Census Bureau: 190,512 SFD/TFDs in Honolulu x 8% illegal 2nd units (15,241units)x $68.39 BWS monthly fee/dwlg unit

$1,042,329 Addl Sewer Revenue/Month

Per Wastewater Bond Prospectus:136,240 Legal SFD/TFD units

x $68.39 BWS monthly fee/dwlg unit$9,317,454 Monthly Sewer Base Charge

Legalizing illegal 2nd units would increase Monthly Sewer Base Chargecollected from SFD/TFDs by 11%

SOURCE:http://www.spur.org/documents/secondaryunits.pdf ; US Census Bureau
http://www.spur.org/documents/secondaryunits.pdfhttp://www.spur.org/documents/secondaryunits.pdf


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SOURCE: City and County of Honolulu Wastewater System Revenue Bond Senior Series 2010


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Economic Recovery

Dept of Planning & Permitting:15,000 Ohana Eligible properties

If every one of these added a 2 nd unit: $68.39 per month x 15,000Potential ADUs =

$1,025,850 /month re-occurring revenue


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ADU / SFD / 201H

25% Est. Adoption Ratex 750 New SFDs in 09

187 Est. New ADUs

COMPARATIVELY: 187 ADUs 221 new SFDs 176 units at Holomua

(Kalakaua and Beretania)


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Govt needs new source of revenue

- new fines, fees, taxes more laws that stifle growth and development affordable housing backlog Seniors need greater assistance (health and housing)

Homeowner builds illegal rentals safety concerns (fire) income non -reported forlife of structure often builds w/o permitor other energy efficiencyupgrades

Community housing costs > 30% income high care home cost, bed shortage illegal rentals continue usingroads, sewer, trash services withoutcontributing fair share of taxes/fees

Do Nothing Scenario:


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Govt increase revenue

- GET (rent, builders/designers, financing,- property taxes- permit fees

- sewer fees no new taxes more affordable housing policies favor growth and urban renewal

Homeowner rental income depend less on govt subsidies pay for upkeep/repairs security live-in companion trade for services

Community

affordable rentals in town neighborhood diversity supports multigenerational living supports aging -in-place

ADUScenario:


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ADUs and Aging-in-Place ADUs support Multigenerational living (separate

unit, legal 2 nd kitchen) Aging-in-place is least expensive option Dont want to move, cant pay for Long Term Care

ADU gives option for caregiver to live on property Added security / comfort

Added rental income: Cash flow Pays for future repairs/upkeep & accessibility retrofits Supplements fixed income Hedge against future inflation


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ADUs and Seniors

2007 Executive Office on Aging report: 74% of people 60+, are homeowners

Seniors prefer to stay put Grab bars, ramps, widen hallways, ramps

Aging in an aging home Design ADU for accessibility (visitability, no-step entry) Fall prevention / accessible retrofits cost money Alteration Cost vs Care Home monthly costs

Less costly option to institutional care But Family / Caregiver support is crucial

Less likely to take on illegal rental Risk averse


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Housing Affordability

Owner-occupant prefer good tenant(stable/quiet) vs higher rent

exchange services for reduced rent ie caregiver or household chore assistance

Provide more rental units, w/in Urban Core Increase supply to meet demand Help ease tight rental market conditions


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Aging-in-Place w/in community

Scattered throughoutcommunity vs concentrated

Greater independence / control Comfortable environment Pets OK


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Bonus Spillover Effects All new construction will be Energy Efficient

(roof/wall insulation, low-e windows) Reoccurring govt revenue

GET from rental income Sewer fees Property Taxes Boost Construction/Finance industries

One-Time govt revenue GET from design/construction, financing Permit fees


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the Solution of the Many:Unity of purpose

achieved thru[diversity]

of the community.


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Accessory Dwelling Units (ADUs) are onecomponent, a first step, towards improving housing affordability

of our great city.In setting policy, the power of the private homeowner is oftenoverlooked as government tends to focus on larger projects of several hundred acres of land or thousands of homes. But that

can take decades to develop, whereas the individual homeowneris more often ready, willing and able to take on small scalealterations and additions that can add dwelling units to a

neighborhood, right now! Sprinkled throughout a community,housing capacity can be added without government subsidy,

requiring no ongoing maintenance or management on the partof the government.

Affordable Housing has never looked this good!


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Thank you for listening!

[email protected] Workshop: 942-1798

ALLKINDS.org
mailto:[email protected]:[email protected]

how accessory dwelling units (adu's) can lower housing costs and support aging in place in honolulu

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