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In California, you can now sell your ADU
- h2odragon 3y agoSub-Sub-divisions! Soon: Recursive HOA's
- username321 3y ago“While the bar for affordability is low—one 748-square-foot property included in the report sold for $610,000 in 2022—“ Sorry, the bar is LOW?
- netbioserror 3y agoI had to do a double-take at that. That's the (inflated) going price for a 2,000+ sq. ft. home in the Southeast right now. With land.
- 0_____0 3y agoOne might surmise that the demand for housing in the part of the Southeast you're thinking of is much lower than in urban California.
- brvsft 3y agoI am also confused by this statement. The most generous interpretation I have is that this number is quite high, and therefore, the bar to being more 'affordable' than this is 'low' in that selling, say, a $500,000 ADU appears quite affordable in comparison. I don't know though, it obviously all seems quite absurd. The other interpretation might be that SFH are far more than this, but one would think you would include the average price of SFH when making such a point.
- bugglebeetle 3y agoYou mean you don’t want to pay 4K a month to live in a shed in someone’s backyard? Do you hate common sense, market-based solutions or something?
- TedDoesntTalk 3y agoWith 20% down ($122k), 7% interest with 30 year fixed rate on $488,000, monthly payments are $3247. Not $4000 but still a lot for a shed.
- brendoelfrendo 3y agoYes, the bar for affordability is low, meaning high prices are still considered affordable in that market. The bar measures what is considered affordable, not the price.
- perrylaj 3y agoAs in "this 748 square foot property was deemed 'affordable' when priced at $610k" - the implication being that it's a low bar to call something affordable, not that it's a low bar to _actually be_ affordable. edit: sorry, this was already said by multiple other people - apparently had an outdated thread in the browser, those comments weren't there when I hit reply!
- adrianmonk 3y agoYes, think of it like this. Prices are super high. A house costs one dump truck full of money. The goal of a program like this is to create something that costs, say, half a dump truck of money instead of a whole dump truck. It's affordable, in a relative sense. Or less unaffordable if you prefer. In normal circumstances (with prices that aren't super high), you wouldn't be able to call $610,000 affordable. But here, you can. So the bar is low. The label has loose criteria.
- onlyrealcuzzo 3y ago> The legislation could be a major benefit to senior citizens on a fixed income who often can’t afford to move, whether because of high interest rates or capital gains taxes incurred by selling a long-time home. A group that is extremely small - and we pretend like every grandma in the world lived in a little cottage in Hollywood that's now worth $3m - and whatever would she do if she had to 1031 into rental properties and live lavishly literally anywhere else in the world. We have to think about all the poor multi-millionaire grandmas and not the current generation that can't afford to own a home and start a family - which is a looming demographic disaster. It's fine if your kids can't afford to live where they grew up. But it's not fine if grandma has to take a $3m windfall and move to the mountains, or Mexico, or Europe, or literally anywhere. Have your cake and eat it, too, grandma.
- umeshunni 3y agoCan't afford to move because they have to pay capital gains tax is such a bullshit reason. Pay it from the fucking gains, grandma..
- sokoloff 3y agoIf I were facing that situation (as I might be 25-30 years from now), I'd surely not rob my children/grandchildren of part of their inheritance by paying capital gains while I am alive rather than passing it along with stepped-up basis after my and my wife's death. "Whoa, hold on; we should change the law on that last point!" I hear you saying. And I might even agree, but unless/until we do, grandma is doing the obviously sensible thing by not selling while she's alive.
- Root_Denied 3y agoRight, but that's the point - why is legislation moving forward that doesn't address the problem?
- sokoloff 3y agoIt turns out that there are thousands of problems various legislatures can choose to address. That they're addressing just a subset of the entire problem space with any given piece of legislation is a feature, not a bug. In this case, the federal tax treatment of inherited property (problem 1) cannot be addressed by a California state-level legislature, but the latter can try to increase the supply of housing in CA (problem 2) by making ADU sales legal there.
- umeshunni 3y agoCalifornia politicians will do everything possible to relieve the housing crisis, except build new housing.
- sokoloff 3y agoDoesn't this law change work to support the creation of new housing units?
- UncleOxidant 3y agoI would think so. Not sure why there's so much negativity about it here.
- ryeights 3y agoThe idea is degrading. A generation of people for which the only feasible path to home ownership is living in a mobile/kit home in someone else’s backyard.
- cheriot 3y agoPart of the political problem is people voting against any form of housing they don't want for themselves. What's degrading is people on the street because CA has such an extreme housing shortage.
- UncleOxidant 3y agoFirst off, a lot of people jumped on the tiny home bandwagon in recent years, some seem to like them. Second, an ADU in a decent neighborhood would probably be a lot quieter than the various condo/townhouse/apartment options. Thirdly, it's not like they have to live in the ADU forever - if they could buy/sell it they'd actually have some equity built up for moving up to something bigger.
- ryeights 3y agoTo elaborate: this would be a fine policy IFF it were accompanied by other legislation that meaningfully improved the affordability of non-ADU homes as well.
- game_the0ry 3y agoUS standard of living is decreasing and will never come back. Many economic anomalies can be observed to prove this: inflation is just one. But I think the most dangerous anomaly has been real estate. In, what is ostensibly the most progressive, most prosperous state in the union, you can build a "mini house" (accessory dwelling unit) on your property and rent it out. The ideal target market would be my generation (millennials) and the next (Gen Z), bc we can't afford homes in CA. And now, you can even "monetize" your ADU...sometimes the free market does bizarre things. Question - how long will this last before the young say "enough" and vote for politicians that just redistribute assets? Bc that historically has not worked well. Anyway, see you in Texas. Or Florida.
- unshavedyak 3y agoWait, Texas doesn't allow you to sell an ADU? Would have thought anything goes over there since my friends so frequently tout ultimate freedom/etc.
- game_the0ry 3y agoFor the price of an ADU in LA, you could probably buy a 4 bedroom SFH home in DFW. There is no need for ADUs in TX.
- brvsft 3y agoWell, they also support property rights, not just freedom. "Selling" your ADU would either require dividing up the parcel (which I am guessing is nontrivial in most places) or somehow itemizing improvements on the parcel so that the ADU owner can pay taxes for their unit separately from the main home on the property. No reason to figure out a solution to any of this when housing isn't much of a problem there.
- esafak 3y agoCalifornia tech companies are enabling remote work, so there's that.
- game_the0ry 3y ago
- gjsman-1000 3y ago"the bill requires cities to opt into the program." How many cities will ever sign up for this?
- yonran 3y agoYeah, it’s unlikely that San Francisco’s current majority at the Board of Supervisors would opt in to this program. Both because they are hostile to housing in general and because they have a special aversion to condominiums (which they likely conflate with an unrelated displacement issue when existing apartments are converted to condos and the tenants are evicted). To be fair, however, they did pass an ordinance that allows up to 6 units per lot and condo subdivision, but the catch is that the extra units are rent controlled, making them less appealing for unsophisticated buyers (https://sfbos.org/sites/default/files/o0210-22.pdf https://sfbos.org/sites/default/files/o0210-22.pdf).
- hnav 3y agoRent control (and to a lesser degree below market rate units) itself seems to be a huge problem that's impossible to unwind, since all it does is arbitrarily grant exemptions to the rising cost of housing while exacerbating the overall problem. There are plenty of affluent people who have a have a rent controlled pied a terre in SF that they've had for 20 years while spending most of their time in their house in Sonoma.
- brvsft 3y agoADUs seem like a bandaid solution for lack of housing supply in desirable areas. Not that I think they shouldn't be legal, but we're talking about paying hundreds of thousands of dollars for what amounts to a shed in someone else's backyard just because you want to live in Seattle, SF, etc. It's so bizarre, and if this solution is taken to its logical end, you literally have cities full of single-family homes with a class of SFH owners, and their second-class ADU "owners" who live in the fancy shed behind their home. I'm curious how the inevitable legal disputes between these two classes of owners will be treated in the coming years.
- c22 3y agoI know at least two properties with ADUs larger than their primary residences.
- deleted 3y ago[deleted]
- bugglebeetle 3y agoBut that’s atypical, so it’s irrelevant. Most ADUs in California cities are things like converted garages and similar sized units.
- c22 3y agoADUs are atypical to begin with, so the entire subject matter is irrelevant!
- eslaught 3y agoWe already have townhouses (that share a wall but own their own land) and condos (which share land and the building). There are also well-established legal precedents for things like easements (e.g., for access, water, sewer, see [1]). I'm not saying this is a good idea, but is it really that different? [1]: https://en.wikipedia.org/wiki/Easement https://en.wikipedia.org/wiki/Easement
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- bugglebeetle 3y agoI’ve resigned myself to the fact that California has signed a suicide pact with real estate speculators that can’t be revoked because of the political consequences of enacting policies that cause prices to go down or even stabilize. Like with the homeless crisis (which is the direct result of the housing crisis), the state will waste billions doing anything and everything to look like they’re working on the problem, while actually doing nothing meaningful because the meaningful things would cost said speculators money. This ADU law is the perfect example. More opportunity to speculate while doing nothing to make housing more affordable or available.
- TheBlight 3y ago>which is the direct result of the housing crisis The homeless crisis is better described as a mental health and substance abuse and addiction crisis.
- 0_____0 3y agoHomelessness tracks with cost of housing much more strongly than with mental health and substance abuse issues (see Colburn & Aldern's research here)
- bugglebeetle 3y ago…is what you say if you’re a real estate speculator trying to distract from root causes. Housing affordability and homelessness are directly correlated: > A large body of academic research has consistently found that homelessness in an area is driven by housing costs, whether expressed in terms of rents, rent-to-income ratios, price-to-income ratios, or home prices. Further, changes in rents precipitate changes in rates of homelessness: homelessness increases when rents rise by amounts that low-income households cannot afford. Similarly, interventions to address housing costs by providing housing directly or through subsidies have been effective in reducing homelessness. That makes sense if housing costs are the main driver of homelessness, but not if other reasons are to blame. Studies show that other factors have a much smaller impact on homelessness. https://www.pewtrusts.org/en/research-and-analysis/articles/2023/08/22/how-housing-costs-drive-levels-of-homelessness https://www.pewtrusts.org/en/research-and-analysis/articles/...
- Izikiel43 3y agoThe problem with San Francisco, Seattle, and Vancouver (BC), and other cities with housing issues is simple, Americans seem to hate apartments, everyone wants houses, so most of the cities are zoned for SFH (Seattle and Vancouver for sure). If you built 10 floor buildings everywhere, with 2/3 bedroom apartments, even at 1 apartment per floor, housing stops being an issue in 5 years. However, go to Seattle, San Francisco and Vancouver, out of their downtowns, houses everywhere. Housing is a solved issue, cities in Asia and Latin America with the same surface area as SF, Seattle and Vancouver fit 3x to 4x more people, but they build up and increase density. All these housing threads are frustrating because of this, just build buildings.
- epistasis 3y agoPolling shows that there's only a slight preference for single family homes. Yet the land usage is absolutely dominated by bans on apartments. If preferences really were so strong for single family homes, there wouldn't have to be a legal ban on other forms of housing. This stranglehold on the housing problem, by a few politicians and a small number of homeowners banning others from living their preferred way of life, is the true cause of the shortage.
- Izikiel43 3y ago> Polling shows that there's only a slight preference for single family homes. So, 51% vs 49% ? That's still half of the people wanting houses. I agree that regulations are to blame, and most of the voters vote against housing, because people in the us who vote are mostly the boomers, who are mostly homeowners, hence increasing the value on their home.
- epistasis 3y agoI think it's more like 60% with a stated preference for single family home over a walkability to amenities. But this is stated preference, not the true preference as revealed by having to put money on the line. And markets prove time and time again that opinion polls do not match up with actual behavior. IMHO, I would suspect more people would choose walkability over SFH than the polls suggest, but I could also be wrong and maybe it would swing the other way. In any case, the market is not allowed to meet consumer demand because of the ubiquity of apartment bans in cities. I have a feeling that if we did more voting rather than backroom deals with a veneer of "public input" where the only people who provide input are busybodies, then we would not have apartment bans at 90% of land area in most cities. (I say "busybody" as a busybody myself, I had to start being one to push back against the housing policy that was causing so many of my friends to move away!)
- fragmede 3y ago> the bill requires cities to opt into the program In California, you can NOT sell your ADU right now. Cities might opt in, but they haven't yet, so it's premature to say that you "can now" do so.
- dclaw 3y agoIf we had high speed rail, areas along the rail line would be better suited to have people live along the route, and distributing housing affordability across a larger area. See the Shinkansen in Japan as a good example. https://hir.harvard.edu/high-speed-rail-affordable-housing/ https://hir.harvard.edu/high-speed-rail-affordable-housing/
- sacnoradhq 3y agoThe city of Austin is floating legislation to allow up to 3 housing units per property including campers, RVs, and tiny homes.