Accessory Dwelling Units (ADU)
Today’s lesson …
Accessory Dwelling Units Arthur C. Nelson, Ph.D. FAICP Presidential Professor University of Utah
Changing Household Size Year
SLC HH Size
US HH Size
1950
3.38
3.40
1960
3.29
3.29
1070
2.93
3.10
1980
2.60
2.76
1990
2.33
2.63
2000
2.48
2.59
2010
2.50
2.58
2
Salt Lake City Households Household Total HH Family HH Single HH Nonfamily HH
Number 72k 38k 26k 8k
Share 53% 37% 11%
Source: American Community Survey 2007-09. Excludes group quarters.
3
Salt Lake City Households by Tenure HH Type Family Single Nonfamily
Rent 34% 54% 64%
Source: American Community Survey 2007-09. Excludes group quarters.
4
People Turning 65 Each Year [Figures in 000s] 4500 4000 3500 3000 2500 2000 1500
Source: US Census Bureau – 65+ in the United States: 2005; Wan He, Manisha Sengupta, Victoria A. Velkoff, & Kimberly A DeBarros. December 2005
20 25
.
20 20
20 15
20 10
20 05
20 00
19 95
19 90
19 85
19 80
19 75
19 70
19 65
19 60
19 55
19 50
1000
Multi-generational Household Share
Multi-Generational Households 30
25
20
15
10
Source: Adapted from The Return of the Multi-Generational Family Household (Pew) by Arthur C. Nelson, Presidential Professor & Director of Metropolitan Research, Univ. of Utah.
1900 1920 1940 1960 1980 2000 1910 1930 1950 1970 1990 2008 Year
Change in HHs 2010-2020 Low High
Source: John McIlwain, ULI, 2010
Buy-Sell Rates by Age Cohort AHS 10.0 9.0 8.0 7.0 6.0
Buy Rate
5.0 4.0 3.0 2.0
Sell Rate
1.0 0.0 2024
2529
3034
3539
4044
4549
5054
5559
6064
6569
7074
7579
80+
Source: Dowell Myers & SungHo Ryu, “Aging Baby Boomers and the Generational Housing Bubble: Foresight and Mitigation of an Epic
1.60
WEST
0.40
0.00
-1.20
MIDWEST SOUTH NORTHEAST
1.20 Buy
0.80
THE GREAT SENIOR SELL-OFF BUY SELL
-0.40
-0.80 Sell
Source: Dowell Myers & SungHo Ryu, “Aging Baby Boomers and the Generational Housing Bubble: Foresight and Mitigation of an Epic Transition”, Journal of the American Planning Association 74(1): 1-17 (2007). Figures for net buying or selling rate age. S M
Ca l Al ifor as ni W ka a y M om on in W ta g a n H a s hi n a w g Co aii ton lo Or ra e d U t g on o a Id h ah Ne o w Ar M izo ex Ne n ico va a da M ich In i g d a Ill ian n in a Oh ois i W o isc No on r s Io th in wa Da M ko in ta Ne nes b o Ka ras ta ns ka So a s ut h Da Lo ko ui ta W sia es n a Vi t V rg i M ini rgin iss a ia Ke ou nt r i Al uc a k M b am y iss a Te iss x i Ok as ppi l Ge aho or m Te gi a n a No ne r ss A r th e e k C So ans aro u a li Fl th s na or C id ar a ol in Co a nn Ne e w c Rh Y ticu o o t Pe de rk nn Is M sy l a a l n M ryla van d ai n ia Ne ne d w M Je as r Ve s a s e y r ch Ne mo us w n e D H t tts
Relocation Choices of Seniors Rental
Before Move 20%
After Move 59%
Source: Arthur C. Nelson based on analysis of American Housing Survey 2005, 2007, 2009.
New movers means moved in past five years. Annual senior movers are about 3% of all senior households; 60%+ of all seniors will change housing type between ages 65 and 85.
New Housing Market Realities • Sub-prime mortgages are history. • 20% down-payments will become normal – But only 1/3rd of HHs paid 20%+ down
• Fannie Mae & Freddie Mac are history. • Meaning – Smaller homes maybe more people per unit – Smaller lots more attached units – More renters including doubled-up renters
QRM (as in squirm) Qualified Residential Mortgage Lenders will need a 5% reserve. 20% minimum down payment Only FHA-backed lending for low down payments. Anyone with a 60 day delinquency in their credit history in past 2 years will not qualify for a QRM.
Effect of Higher Down Payment? Percent of purchase price No down payment Less than 3 percent 3-5 percent 6-10 percent 11-15 percent 16-20 percent 21-40 percent 41-99 percent Bought outright
Percent
Cumulative
14% 8% 12% 16% 6% 13% 13% 7% 10%
14% 22% 34% 50% 56% 69% 82% 90% 100%
Source: Adapted by Arthur C. Nelson from American Housing Survey 2009 (2010)
Life-Stage Flexibility Needed
Source: Graphic by Ryan Sullivan. http://nwrenovation.com/green-remodeling/accessorydwelling-units-%E2%80%94-can-granny-flats-save-the-world/
14
What is an ADU? • An Accessory Dwelling Unit is a secondary housing unit on the same property as a main residence. • ADUs are also called accessory apartments,
in-law apartments, family apartments, or secondary units, “granny flats”, etc.
• ADUs are not duplexes: – ADU is subsidiary to the main residence – Owner of ADU usually lives on the property
• ADUs are self-contained
Why consider an ADU Option? • Shrinking household size • Rising real estate costs • Aging population • Neighborhood stability • Character of neighborhoods • Environmental benefits
Public ADU Benefits • Increases tax revenues • Minimizes subsidies for affordable units • Maximizes use of existing infrastructure and services • Keeps growing/aging families together • Preserves existing housing/historic structures • Promotes safer and stable neighborhoods
Private ADU Benefits • Homeowners – rental income • Local businesses – employee housing • Real estate firms – rental stock • Residential contractors – remodeling
• Lending institutions – home improvement loans
Who typically creates ADUs? • Older singles/couples • Middle-aged "empty nesters"
• Younger singles/couples • Single working parents
• People who travel often
Types of ADUs • Apartments in single-family homes • Additions to homes • Conversion of garages/secondary structures • Free-standing cottages • Designed into new construction
21
Walk/Bike to Work/Errands Important/ Very Important Work
Important/Very Important Errands
23%
22%
18-34
24%
22%
35-54
21%
20%
55-69
23%
24%
70+
24%
25%
120% AMI
16%
16%
Single Person HH
28%
29%
HH No Children
22%
21%
HH With Children
20%
18%
Demographic Group All Age
Income
Household Type
Source: Adapted by Nelson et al. from Porter-Novelli (2003; 2005)
Supply & Demand Comparison
Mode and Destination Walk or Bike to Work Walk or Bike for Errands
Supply 4% 10%
Source: Supply from NHTS 2009 (2011); demand from Porter-Novelli (2003, 2005)
Demand 23% 22%
Observed Walk/Bike Share Within 1-Mile Year
Walk/Bike to Work Less than 1 Mile
Walk/Bike to Errands Less than 1 Mile
1995
25%
26%
2001
34%
35%
2009
37%
42%
Change 1995-2009
45%
59%
Source: National Household Travel Survey 2009 (2011)
.
Summary of ADU Benefits • Creates new housing using existing infrastructure and services • Reduces energy consumption • Generates community economic development • Reduces costs for the elderly • Preserves housing stock and neighborhood stability • Improves walk/bike access to work/errands when ADUs within 1 mile
US ADU Household Market Households with Relatives other than spouse/children Nonrelatives Total other relatives or nonrelatives
All HHs 21% 10% 31%
65+ HHs 16% 5% 21%
Source: American Housing Survey for 2009.
26
Salt Lake City ADU Demand 2030? 250,000 Population 100,000 Households 50,000 Single & Nonfamily HHs 30,000 Demand for ADU-like options ~2-sq. mi. of land saved from development ~$100M saved from new infrastructure 27
Transit Access Demand Demographic Group All
Easy Walk to Walk/Bike to Transit Want Rail Transit Rail Transit is Important Accessible Important (Porter Novelli) (NAR 2011) (NAR 2011)
Prefers Density if Transit Available (PPIC 2004 & ASU 2007 )
Average
23%
21%
23%
29%
24%
18-34
26%
31%
29%
34%
30%
35-54
21%
24%
22%
25%
23%
55-69
22%
24%
23%
32%
25%
70 +
24%
27%
26%
24%
25%
< 80% AMI
28%
25%
23%
36%
28%
80 %-120% AMI
17%
24%
22%
26%
22%
> 120% AMI
17%
23%
20%
25%
21%
Single Person HH
32%
27%
26%
29%
29%
HH Without Children
21%
24%
21%
26%
23%
HH With Children
19%
24%
21%
31%
24%
Age
Income
Household Type
28
29
30
Streetcar 2100 South State Street 300 East 500 East
700 East 900 East 1040 East Sub Total Light Rail Ballpark City Center Gallivan Center Temple Square Delta Center Courthouse Library
Stations 210 236 596 936
1,122 823 664 4,587 Stations 73 47 0 93 39 4 113
Light Rail Trolley 900 East Stadium University South Campus
University Medical Fort Douglas 900 South Greektown SLC Central Planetarium Cornell 800 West 500 West Fairpark Winifred Sub Total Grand Total
Stations 579 909 676 0
101 0 22 56 114 9 142 599 178 430 217 4,401 31 8,988
TODs and Energy Consumption
-55%
-57% -60%
Source: Adapted from Jonathan Rose Companies (2011) for EPA.
Thank You
Wasatch 2040 Choice Get Involved www.wasatchchoice2040.com/get-involved/
Accessory Dwelling Units Arthur C. Nelson, Ph.D. FAICP Presidential Professor University of Utah
Changing Household Size Year
SLC HH Size
US HH Size
1950
3.38
3.40
1960
3.29
3.29
1070
2.93
3.10
1980
2.60
2.76
1990
2.33
2.63
2000
2.48
2.59
2010
2.50
2.58
2
Salt Lake City Households Household Total HH Family HH Single HH Nonfamily HH
Number 72k 38k 26k 8k
Share 53% 37% 11%
Source: American Community Survey 2007-09. Excludes group quarters.
3
Salt Lake City Households by Tenure HH Type Family Single Nonfamily
Rent 34% 54% 64%
Source: American Community Survey 2007-09. Excludes group quarters.
4
People Turning 65 Each Year [Figures in 000s] 4500 4000 3500 3000 2500 2000 1500
Source: US Census Bureau – 65+ in the United States: 2005; Wan He, Manisha Sengupta, Victoria A. Velkoff, & Kimberly A DeBarros. December 2005
20 25
.
20 20
20 15
20 10
20 05
20 00
19 95
19 90
19 85
19 80
19 75
19 70
19 65
19 60
19 55
19 50
1000
Multi-generational Household Share
Multi-Generational Households 30
25
20
15
10
Source: Adapted from The Return of the Multi-Generational Family Household (Pew) by Arthur C. Nelson, Presidential Professor & Director of Metropolitan Research, Univ. of Utah.
1900 1920 1940 1960 1980 2000 1910 1930 1950 1970 1990 2008 Year
Change in HHs 2010-2020 Low High
Source: John McIlwain, ULI, 2010
Buy-Sell Rates by Age Cohort AHS 10.0 9.0 8.0 7.0 6.0
Buy Rate
5.0 4.0 3.0 2.0
Sell Rate
1.0 0.0 2024
2529
3034
3539
4044
4549
5054
5559
6064
6569
7074
7579
80+
Source: Dowell Myers & SungHo Ryu, “Aging Baby Boomers and the Generational Housing Bubble: Foresight and Mitigation of an Epic
1.60
WEST
0.40
0.00
-1.20
MIDWEST SOUTH NORTHEAST
1.20 Buy
0.80
THE GREAT SENIOR SELL-OFF BUY SELL
-0.40
-0.80 Sell
Source: Dowell Myers & SungHo Ryu, “Aging Baby Boomers and the Generational Housing Bubble: Foresight and Mitigation of an Epic Transition”, Journal of the American Planning Association 74(1): 1-17 (2007). Figures for net buying or selling rate age. S M
Ca l Al ifor as ni W ka a y M om on in W ta g a n H a s hi n a w g Co aii ton lo Or ra e d U t g on o a Id h ah Ne o w Ar M izo ex Ne n ico va a da M ich In i g d a Ill ian n in a Oh ois i W o isc No on r s Io th in wa Da M ko in ta Ne nes b o Ka ras ta ns ka So a s ut h Da Lo ko ui ta W sia es n a Vi t V rg i M ini rgin iss a ia Ke ou nt r i Al uc a k M b am y iss a Te iss x i Ok as ppi l Ge aho or m Te gi a n a No ne r ss A r th e e k C So ans aro u a li Fl th s na or C id ar a ol in Co a nn Ne e w c Rh Y ticu o o t Pe de rk nn Is M sy l a a l n M ryla van d ai n ia Ne ne d w M Je as r Ve s a s e y r ch Ne mo us w n e D H t tts
Relocation Choices of Seniors Rental
Before Move 20%
After Move 59%
Source: Arthur C. Nelson based on analysis of American Housing Survey 2005, 2007, 2009.
New movers means moved in past five years. Annual senior movers are about 3% of all senior households; 60%+ of all seniors will change housing type between ages 65 and 85.
New Housing Market Realities • Sub-prime mortgages are history. • 20% down-payments will become normal – But only 1/3rd of HHs paid 20%+ down
• Fannie Mae & Freddie Mac are history. • Meaning – Smaller homes maybe more people per unit – Smaller lots more attached units – More renters including doubled-up renters
QRM (as in squirm) Qualified Residential Mortgage Lenders will need a 5% reserve. 20% minimum down payment Only FHA-backed lending for low down payments. Anyone with a 60 day delinquency in their credit history in past 2 years will not qualify for a QRM.
Effect of Higher Down Payment? Percent of purchase price No down payment Less than 3 percent 3-5 percent 6-10 percent 11-15 percent 16-20 percent 21-40 percent 41-99 percent Bought outright
Percent
Cumulative
14% 8% 12% 16% 6% 13% 13% 7% 10%
14% 22% 34% 50% 56% 69% 82% 90% 100%
Source: Adapted by Arthur C. Nelson from American Housing Survey 2009 (2010)
Life-Stage Flexibility Needed
Source: Graphic by Ryan Sullivan. http://nwrenovation.com/green-remodeling/accessorydwelling-units-%E2%80%94-can-granny-flats-save-the-world/
14
What is an ADU? • An Accessory Dwelling Unit is a secondary housing unit on the same property as a main residence. • ADUs are also called accessory apartments,
in-law apartments, family apartments, or secondary units, “granny flats”, etc.
• ADUs are not duplexes: – ADU is subsidiary to the main residence – Owner of ADU usually lives on the property
• ADUs are self-contained
Why consider an ADU Option? • Shrinking household size • Rising real estate costs • Aging population • Neighborhood stability • Character of neighborhoods • Environmental benefits
Public ADU Benefits • Increases tax revenues • Minimizes subsidies for affordable units • Maximizes use of existing infrastructure and services • Keeps growing/aging families together • Preserves existing housing/historic structures • Promotes safer and stable neighborhoods
Private ADU Benefits • Homeowners – rental income • Local businesses – employee housing • Real estate firms – rental stock • Residential contractors – remodeling
• Lending institutions – home improvement loans
Who typically creates ADUs? • Older singles/couples • Middle-aged "empty nesters"
• Younger singles/couples • Single working parents
• People who travel often
Types of ADUs • Apartments in single-family homes • Additions to homes • Conversion of garages/secondary structures • Free-standing cottages • Designed into new construction
21
Walk/Bike to Work/Errands Important/ Very Important Work
Important/Very Important Errands
23%
22%
18-34
24%
22%
35-54
21%
20%
55-69
23%
24%
70+
24%
25%
120% AMI
16%
16%
Single Person HH
28%
29%
HH No Children
22%
21%
HH With Children
20%
18%
Demographic Group All Age
Income
Household Type
Source: Adapted by Nelson et al. from Porter-Novelli (2003; 2005)
Supply & Demand Comparison
Mode and Destination Walk or Bike to Work Walk or Bike for Errands
Supply 4% 10%
Source: Supply from NHTS 2009 (2011); demand from Porter-Novelli (2003, 2005)
Demand 23% 22%
Observed Walk/Bike Share Within 1-Mile Year
Walk/Bike to Work Less than 1 Mile
Walk/Bike to Errands Less than 1 Mile
1995
25%
26%
2001
34%
35%
2009
37%
42%
Change 1995-2009
45%
59%
Source: National Household Travel Survey 2009 (2011)
.
Summary of ADU Benefits • Creates new housing using existing infrastructure and services • Reduces energy consumption • Generates community economic development • Reduces costs for the elderly • Preserves housing stock and neighborhood stability • Improves walk/bike access to work/errands when ADUs within 1 mile
US ADU Household Market Households with Relatives other than spouse/children Nonrelatives Total other relatives or nonrelatives
All HHs 21% 10% 31%
65+ HHs 16% 5% 21%
Source: American Housing Survey for 2009.
26
Salt Lake City ADU Demand 2030? 250,000 Population 100,000 Households 50,000 Single & Nonfamily HHs 30,000 Demand for ADU-like options ~2-sq. mi. of land saved from development ~$100M saved from new infrastructure 27
Transit Access Demand Demographic Group All
Easy Walk to Walk/Bike to Transit Want Rail Transit Rail Transit is Important Accessible Important (Porter Novelli) (NAR 2011) (NAR 2011)
Prefers Density if Transit Available (PPIC 2004 & ASU 2007 )
Average
23%
21%
23%
29%
24%
18-34
26%
31%
29%
34%
30%
35-54
21%
24%
22%
25%
23%
55-69
22%
24%
23%
32%
25%
70 +
24%
27%
26%
24%
25%
< 80% AMI
28%
25%
23%
36%
28%
80 %-120% AMI
17%
24%
22%
26%
22%
> 120% AMI
17%
23%
20%
25%
21%
Single Person HH
32%
27%
26%
29%
29%
HH Without Children
21%
24%
21%
26%
23%
HH With Children
19%
24%
21%
31%
24%
Age
Income
Household Type
28
29
30
Streetcar 2100 South State Street 300 East 500 East
700 East 900 East 1040 East Sub Total Light Rail Ballpark City Center Gallivan Center Temple Square Delta Center Courthouse Library
Stations 210 236 596 936
1,122 823 664 4,587 Stations 73 47 0 93 39 4 113
Light Rail Trolley 900 East Stadium University South Campus
University Medical Fort Douglas 900 South Greektown SLC Central Planetarium Cornell 800 West 500 West Fairpark Winifred Sub Total Grand Total
Stations 579 909 676 0
101 0 22 56 114 9 142 599 178 430 217 4,401 31 8,988
TODs and Energy Consumption
-55%
-57% -60%
Source: Adapted from Jonathan Rose Companies (2011) for EPA.
Thank You
Wasatch 2040 Choice Get Involved www.wasatchchoice2040.com/get-involved/
