Should Granny Flats Count for Housing Goals If Granny Lives There?

Every year, in each of California’s 58 counties, a group of residents is sworn in to serve as a civil grand jury that investigates the operations of officers, departments and agencies of local government. This posse of deputized residents can investigate whatever they decide needs investigating.

In San Mateo County, located on the Peninsula between San Francisco and San Jose, a civil grand jury has blown the whistle on several cities it claims are relying on granny flats—a.k.a. accessory dwelling units (ADUs)—to avoid mandates to build new multifamily affordable housing units.

To address what California has declared is an affordable housing state of emergency, last year the state enacted an amendment to its 1969 Housing Element Law allowing communities to count ADUs as affordable housing in their plans to build affordable housing that meets state-mandated goals.

ADUs are stand-alone apartments on residential property—think of a room over a separate garage—that owners can rent out to low-income tenants, a change aimed at increasing the housing density in communities. [ADUs are known as granny flats because that’s where some people stash granny when she moves in with them—although, in today’s economy it’s probably much more likely that granny stashes the kids there when they move back in.]

California’s state housing agency, which issues affordable housing mandates to cities in eight-year cycles, has set goals for the period from 2023 to 2031 calling for three times as many affordable housing units than the goals for the cycle that ran from 2015 to 2023.

According to a report from San Mateo County’s civil grand jury, when the state adjusted the law last year to permit ADUs to be counted against these goals, it did not propose any regulations to make sure these accessory dwellings actually are being rented to low-income people, the San Jose Mercury News reported.

The grand jury’s report said that affluent communities on the San Francisco Peninsula, including Atherton, Hillsborough, Portala Valley and Woodside submitted Housing Element plans to the state that meet as much as 80% of their affordable housing goals with ADUs.

[California’s Department of Housing thus far has rejected all of these plans. The plans were required to be submitted by January 31; Redwood City and Brisbane are the only cities in San Mateo County who have had their plans approved by the state.]

The civil grand jury report said the cities need to monitor whether property owners are renting their ADUs out to friends and family.

“The big issue here is that every ADU that is permitted for low-income housing but is not used for low-income housing is an actual low-income deed-restricted affordable housing unit that is not built,” said civil grand jury foreperson Steven Drace, in the report.

The civil grand jury recommended that city councils stop using ADUs in their plans to meet state-mandated affordable housing targets until they’ve established effective monitoring systems. The jury’s recommendations do not have the force of law, but elected officials must respond to the report within 60 days and governing bodies within 90 days, the newspaper said.

Hillsborough Mayor Christine Krolik told the Mercury News that ADUs were hailed as the best way to solve the housing crisis in communities with high land values. She said the city wants people who build ADUs to rent them out and it plans to track that data.

“We’re doing what we can to provide the needed housing,” Krolik said. “The conversation here is not by and large geared towards pushing back against these mandates. It’s about how to creatively fulfill them.”

Portola Valley Mayor Jeff Aalfs disputed the grand jury report’s representation of what his city is doing to develop affordable housing. He told the Mercury News that the town had pursued “a robust, transparent and public process” and had incorporated ADUs “judiciously.”