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Abstract
Secondary units, or separate small dwellings embedded within single-family residential properties, constitute a frequently overlooked strategy for urban infill in high-cost metropolitan areas in the United States. This study, which is situated within California’s San Francisco Bay Area, draws upon data collected from a homeowners’ survey and a Rental Market Analysis to provide evidence that a scaled-up strategy emphasizing one type of secondary unit – the backyard cottage – could yield substantial infill growth with minimal public subsidy. In addition, it is found that this strategy compares favorably in terms of affordability with infill of the sort traditionally favored in the ‘smart growth’ literature, i.e. the construction of dense multifamily housing developments.
Acknowledgements
This research was supported by a Faculty Grant from the University of California Transportation Center (UCTC). The authors gratefully acknowledge the contributions of Alison Nemirow in developing and implementing the parcel analysis methodology.
Notes
1. For detailed information on the two quantitative gathering methods, see Wegmann (Citation2012).
2. Examples of telltale phrases indicating that a given advertisement was for a secondary unit included ‘cottage behind the main house,’ ‘flat above the garage,’ and ‘unit has its own entrance, with the landlord right next door.’ In general, secondary units were distinguished from units within duplexes by indications that the unit in question was considerably smaller than the main house or the main portion of the house.
3. On each day that data collection took place, all advertisements for secondary units within the Rental Market Study Area were collected. Next, all listings for apartments that were not secondary units were collected in the order shown on the appropriate Craigslist web pages until they approximately equaled the number of advertisements for secondary units that had been collected up to that point. Following the end of data gathering, once all advertisements had been analyzed and their salient characteristics entered into a database, some of the listings were discarded because they lacked critical information such as the number of bedrooms or bathrooms. These procedures resulted in the totals of 174 and 164 advertisements for secondary and non-secondary unit apartments, respectively.
4. The Flatlands are extrapolated from the Station Areas as the sections within the cities of El Cerrito, Berkeley, and Oakland that are flat-lying and relatively similar in terms of zoning, parcelization patterns, and demographics to the areas of those cities that lie within the Station Areas. Insufficient data were obtained from the other jurisdictions making up small sections of the Station Areas – Richmond, Albany, and unincorporated Kensington – for these results to be plausibly generalizable, and therefore they were left out of the definition of the Flatlands. For more in-depth discussion, see Chapple et al. (Citation2011).
5. While 2005 data are somewhat out of date, there has been relatively little residential construction in the East Bay since that time due to the regional and global economic recession. For instance, an average of only 264 residential units were started within the cities of El Cerrito, Berkeley, and Oakland per year from the years 2005 to 2011, inclusive, equating to a rate of increase of barely 0.1% of the housing stock per year, even when ignoring conversion, demolition, and abandonment of existing units (US Census Citation2012b).
6. Because it is difficult to obtain housing starts data at the sub-city level, the proxy measure quoted here is computed as Oakland’s citywide housing starts of buildings of five or more units, with the 11.3% factor applied to account for North Oakland’s share of citywide housing units as of the 2010 Census, plus citywide totals of the same category of developments for Berkeley and El Cerrito.
7. To our knowledge, no comprehensive review of all 110 jurisdictions in the nine-county Bay Area with respect to permissiveness towards secondary units in zoning codes has been undertaken. Our analysis showed Berkeley generally to be the most permissive of the three Flatlands cities, and El Cerrito to be the most restrictive, with Oakland somewhere in between (Chapple et al. Citation2011). Even El Cerrito, however, appears to be more permissive than many of the other jurisdictions in the Bay Area, such as the majority of the small incorporated cities in Santa Clara County (‘Silicon Valley’), the highly affluent and jobs-rich southern portion of the Bay Area.
8. Bay Area cities, including all three Flatlands jurisdictions, commonly predicate occupancy of a secondary unit on owner-occupation of the property. In other words, a secondary unit typically cannot be occupied unless the property’s owner resides either there or in the primary dwelling. We have not factored the rate of owner-occupancy amongst the single-family housing stock in the Flatlands into the analysis. The main reason for this omission is the supposition that with increasing acceptance of backyard cottages and other secondary units, there is a high likelihood of the eventual removal of owner-occupancy requirements. This is due to homeowners gaining greater familiarity with secondary units and eventually coming to see them as valuable income-producing assets rather than as threats to neighborhood quality of life. This dynamic appears to be underway in Santa Cruz and Seattle, two jurisdictions that are much further along in efforts to increase the acceptance of secondary units than the Flatlands jurisdictions, although the owner-occupancy requirement reforms have not yet taken place at the time of writing (Interviews Citation2011a, Citation2011b).
9. Since RHNA targets are published at the citywide scale, we assigned North Oakland a share of 11.3% of the city’s targets, corresponding to the share of the city’s housing units represented by the Oakland section of the Flatlands. The Berkeley and El Cerrito RHNA targets shown are citywide.
10. Here we follow the US Department of Housing and Urban Development (HUD) definition of ‘affordability,’ in which a dwelling unit is deemed to be affordable for a household if monthly rent plus utility costs do not exceed 30% of the household’s monthly income before taxes, and which is normalized by household size and the number of bedrooms.
11. We do not adjust rents to take account of parking provision, even though free off-street parking is a valuable amenity, to match US affordability definition conventions.
12. These results, of course, are only pertinent to the subset of apartments that are advertised on Craigslist. It is entirely possible that there exists a separate category of secondary units that are located in lower-income areas but which do not appear on Craigslist because they are advertised by word of mouth or other geographically limited means. The ability of a prospective tenant to rent such a unit, however, would likely be dependent on his/her having pre-existing ties to particular social networks or locations. The results summarized here suggest that among widely publicized apartments secondary units are more likely than other types of rental apartments to be located in higher-income neighborhoods.
13. While rental units provided at reduced rates or rent-free to friends, relatives or family members provide an undeniable housing affordability benefit to those persons, because such units are not available on the open market they would not be counted against RHNA-style affordable housing quotas. We follow this convention here.
14. While inclusionary housing ordinances have been actively considered in El Cerrito and Oakland, they have not been implemented to date.
15. Between 2001 and 2011 inclusive, 23 subsidized new construction multifamily rental projects in Oakland and Berkeley received Affordable Housing Program (AHP) monies from the Federal Home Loan Bank of San Francisco. (No rental developments in El Cerrito with AHP funding were completed during this period.) These yielded a total of 1677 units, with an average project capital cost of about US$25.5 million and just under US$351,000 per unit in 2012 inflation-adjusted dollars. No project cost less than US$199,000 per unit to develop. While these figures pertain only to subsidized multifamily rental housing, total development costs would be expected to be similar for market rate projects, given the use of the same building types, similar land costs, and a similar regulatory environment, or perhaps even higher, given investor expectations for a return on equity. (For details regarding the data set from which these figures are drawn, please contact the authors.)
16. The Sampling Design Tool was created by the National Oceanic and Atmospheric Administration’s National Centers for Coastal Ocean Science. The tool can be downloaded at: http://ccma.nos.noaa.gov/products/biogeography/sampling/.
17. This far exceeds the sample size needed to achieve a 90% confidence interval and 10% margin of error (standard assumptions in the field of planning), using even the most conservative assumption of p = 0.5.
18. For garages, the number of parking spaces (one or two cars) was based on observed width. Some garages that appear from the street to accommodate only one car may in fact be deep enough to accommodate two cars.