Are accessory dwelling units making SF’s housing crisis worse?

The ADU program is greenlighting units constructed from basements and garages as well as mega homes

By Anna Tong

Special to The Examiner

Accessory Dwelling Units (ADUs) were supposed to be a win-win way to fix the San Francisco housing crisis. Convert some unused storage or basement space into an apartment — and voila! more income for a homeowner and a newly affordable living unit for a prospective renter.

Ten years ago, I lived with a roommate in an ADU in Dolores Heights. Partially underground, it was always damp and dark, but we were living the dream in a yellow Victorian for $2,100 per month. Our landlady, an elderly widowed woman, tolerated us because she relied on our rent. On weekend hangouts in Dolores Park, our friends were delighted to use our bathroom rather than the porta potties.

Our city politicians have made ADUs a key priority because they seem like a clever, relatively easy solution for creating affordable housing. San Francisco’s ADU program, established by the San Francisco Planning Department in 2016, expedites ADU projects.

Every new policy has trade-offs and unintended consequences. But, at least in Dolores Heights and likely throughout San Francisco, instead of creating more housing, the emphasis on creating ADUs seems to have created a loophole for building enormous homes that house no one, arguably making our housing crisis worse, not better.

Since 2015, the ADU program has provided 580 new units of housing in San Francisco, according to Department of Building Inspection data. Put another way, our current rate of ADU production of 100 per year fulfills 1% of San Francisco’s housing production needs. One percent is still something, but the problem is that the harms of the ADU program may greatly outweigh the paltry 100 units per year. (In comparison, the vetoed Stevenson Street project would have provided 495 new units.)

Fast forward 10 years from my Dolores Heights ADU days. Facebook (sorry, I mean Meta), has long IPO’d. Mark Zuckerberg has moved into a home on 21st and Fair Oaks, along with some of his colleagues. The latest wave of settlers in Dolores Heights have gobs of money. And some old-time Dolores Heights residents say the new folks are using ADUs as a Trojan horse for building mega mansions that destroy the character of their neighborhood, which is known for its colorful Victorians and stunning cityscape views.

While mega mansion projects don’t generally apply to the ADU program, the positive attitude toward ADUs have created an approval pathway for mega mansions. Giant homes can be approved when plans are submitted that increase the number of units on a property from one to two.

One such Dolores Heights project aims to demolish a 1,000-square-foot cottage and replace it with a concrete 4,000-square-foot home. When neighbors complained in 2019, the property owner added an ADU and it was subsequently green-lit by the Board of Supervisors. The same neighbors complained when, a block away, two lots were merged to create an 8,300-square-foot home. In response, the owners added an ADU and the plans were green-lit, part of the justification being that it created a “net gain of one unit by adding a new studio unit.”

Even worse, many of these homes go unoccupied. Resident Joerg Rathenberg, who has been leading a Dolores Heights neighborhood group that is fighting to keep the 1,000 square foot cottage, says he’s seen an uptick in the number of homeowners, like Zuckerberg, who use their San Francisco mansions as pied-à-terres. Walking around the neighborhood, many of the Victorians are bustling with retirees or residents, while the giant concrete homes sit stone-silent, their hedges beautifully trimmed.

The fight in Dolores Heights is for sure a story of the .1% versus the 1%. Yet if the rules intended to usher in affordable housing are instead creating enormous, multi-million-dollar homes that block our walking views and don’t house permanent residents, we should all care.

What’s missing from the ADU permitting and approval process is any recognition that an ADU would ever be rented and thus increase additional housing stock. These days, building costs in San Francisco for new construction are $500-$1,000 a square foot, or nearly a million dollars in just building costs for a modest sized ADU. Put another way, if somebody has $8 million to drop on building their dream home, they don’t need $3,000 a month from renting an ADU.

Some ADUs are actually meant to be rentals. Mark Hogan, whose firm OpenScope Studio wrote San Francisco’s ADU handbook in 2018, says that ADUs constructed within existing apartment buildings can make economic sense to landlords, as some can be built for less than $200,000. But he also said there has been an “unbelievable delay” in moving ADU applications through the pipeline, which disincentivizes landlords from applying.

Again, if we want more affordable housing stock through the ADU program, The City needs to prioritize the ADUs that are truly meant to become rentals. Supervisor Rafael Mandelman, whose district includes Dolores Heights, seems to have caught on to this idea. He recently introduced legislation to make it harder to build excessively large units, even if they add ADUs.

I’m all for ADUs and creative ways to fix our housing crisis. But let’s be realistic about how much housing they will actually provide The City and not let people take advantage of our ADU-mania to make the housing crisis worse, not better.

Anna Tong is a freelance reporter. Twitter: @annatonger

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