Reply to Say it with me: ADUs drive housing prices UP not down

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]We live in a starter home with a decent sized yard. We could easily fit an ADU and we could pay for it by borrowing against the appreciation in the value of our home. And that would increase the value of our home overnight by probably 30 percent.

How exactly does that help affordable housing? How does that help someone trying to save up to buy their first home, a starter home like ours? All it does it drive the price of our starter home beyond the budget of anyone who would be in the market for a starter home.

I can't tell if the D.C. government is cynical or just stupid in how they portray policies that are designed to enrich developers and people who already own homes as somehow helping everyone else. [/quote]

1) the income it provides to you helps make your house more affordable
2) the rental unit provides a lower cost option to another person or family[/quote]

But it DOESN'T make the original property more affordable to the next buyer. It creates cheaper housing in people's backyards for rent. The property itself won't be cheaper after adding an ADU, but more expensive.

Do I have that right? [/quote]

Yes, the property will be more expensive because there are two units of housing on it instead of one. Just like, generally, a one-acre parcel with 20 units of housing on it will be more expensive than the same parcel with 1 unit of housing on it. It should go without saying that a one-acre parcel with 20 units of housing on it has 20 times as many housing units as a parcel with 1 unit of housing on it.[/quote]

So what you’re saying is ADUs are zero sum and we have to choose between rental affordability and purchase affordability. If that’s the case, it’s worth a conversation about balancing rental and purchase affordability, because those two things are actually linked. Monthly mortgage payments put a soft cap on rents, so if mortgage payments go up on average, rents have more headroom to grow. [/quote]

No, that's not what I'm saying. I'm saying that the purpose of ADUs is to add housing units, not to ensure that the PP at the top can afford to buy a "starter" home with a yard big enough to put an ADU in. [/quote]

It may not be what you’re saying but it’s the effect of what you’re recommending. It’s tricky to balance affordability in the purchase and rental segments and I don’t know what the answer is but some controls to prevent non-resident investors from squeezing out first-time buyers probably are necessary. The investor funding would produce more housing if it were bundled and put into MF high-rise anyway. [/quote]

Nobody is suggesting that first time buyers will be able to buy a SFH on a large lot near metro under this policy. But they can’t do that now anyways. However they will be able to now live in that same neighborhood in a condo or apartment rather than a SFH w/ yard. That’s the point. Letting people with more modest means access the benefits of transportation and infrastructure.[/quote]

Yes, no one is suggesting it, so why did you bring it up? The greatest threat that ADUs pose to affordability is for 1940s homes on lots that are large relative to footprint of the house. Some of those houses are close to metro (though outside the walkshed), relatively close to downtown, and close to the beltway. Some are currently affordable to purchase for households below AMI. That won’t be the case for houses with ADUs added because any increase in value will put them out of reach.

And it’s a red herring to say ADUs are to improve transit accessibility because they can be built anywhere.

One thing to consider is that for close-in neighborhoods ADUs may suppress the construction of higher density housing where allowed because the builder would offload the risk of the second property to the buyer, while the builder would retain the risk for every unit in a multiplex until it’s sold out.

I think ADUs should be allowed but that we also need regulations that discourage investor activity. [/quote]

Yes, discouraging investment in housing is totally the way to increase housing supply. [/quote]

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