Council pushes for financing, streamlined planning to encourage accessory dwellings

A resolution passed by City Council earlier this month may make it easier and less expensive for homeowners to construct accessory dwelling units on their property.

City staff has been instructed to look for funding to provide low-cost loans to residents who need help borrowing to cover the construction costs of the units, which some Council members see as a way to add “gentle density” to the city without the upzoning and new housing types suggested in the proposed Land Development Code.

The resolution, which was approved April 9, also asks staff to establish preapproved model types for ADUs in order to streamline the planning and permitting process, while also looking for possible tax abatements for units that are priced at affordable levels. A response on the model types is due by Aug. 30, with reports on the financing and tax abatement options due by Sept. 30.

The push to make ADUs more widespread throughout the city was a subject of much discussion, analysis and action prior to the multi-year process of crafting the Land Development Code, which stalled in 2018 and started up again last year. Studies from nonprofits involved in housing options and displacement found that many homeowners who could benefit from the income of having a second smaller residence on their property lack access to the capital needed to cover building and planning costs.

Council Member Kathie Tovo, who was among the co-sponsors of the resolution, said Council members’ agreement about the benefits of ADUs for longtime residents made the action easy to support.

“There was clearly a lot of interest among the Council as a whole to see more housing opportunities. We may disagree on the extent to which that should be done through upzoning of existing properties, but where I believe we have consensus is around accessory dwelling units and the opportunities that exist within that type of housing in areas where that can add additional housing units without prompting the wholesale redevelopment of a neighborhood,” she said.

The resolution language repeatedly notes the analysis and experience of the nonprofit group Community Powered Workshop – previously known as the Austin Community Design and Development Center – around ADUs or so-called “alley flats,” though it does not specify that group as the likely partner in helping to streamline planning or financing efforts.

Tovo said historically most ADU construction has been undertaken by well-financed developers instead of residents who could opt to live in the accessory unit and sell or rent the primary home instead of being forced out of their neighborhood by rising property taxes and other costs. She also said making ADUs more accessible in the city’s central districts could reduce demolitions being undertaken to build larger and more expensive homes on existing lots.

“At the moment I’m told it’s very challenging to make that be a success financially for lower-income residents who might have trouble accessing loans and wouldn’t be a very viable solution to help them remain in place by building an accessory dwelling unit and renting it out,” she said. “If we can remove that barrier and help them access low-interest loans and find ways of facilitating development of accessory dwelling units through standardized plans, that could be a very viable way of helping people stay in their neighborhoods, avoid displacement and meet some of our city goals.”

Council Member Alison Alter said she’d like the city to eventually reduce the maximum size of accessory units from the 1,100 square feet currently allowed, but sees the new resolution as a way to take advantage of the current slack in the construction industry due to the constraints of Covid-19.

“The financing is one important step, and having the models of ADUs that you could deploy to skip a lot of the permitting steps or streamline those, that’s something I’ve been talking about as important since I got on Council as far as how we address things that were laid out in the Zucker report and thinking about how we achieve density,” she said. “One of the barriers is the permitting process, and there are ways to set up things to be streamlined so we incentivize the things that we most want.”

Photo made available through a Creative Commons license.

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