From Napa Valley Register: Napa County Grand Jury says local government can do more to promote ‘granny flats’

June 3, 202 by Carly Graf

Napa County Grand Jury recently wrapped up its probe into local efforts to promote accessory dwelling units as a tool to address the area’s ongoing housing crisis.

Though the Jury identified some attempts to streamline the planning, approval and building of ADUs, it concluded the process lacks the “clarity and simplicity” that might encourage an interested homeowner to undertake the project.

The Jury estimated that, with proper streamlining, up to 1,000 ADUs – small, self-contained living quarters located either adjacent to or on the grounds of single-family homes — could be built across Napa County in the next five years.

Also known as “granny flats,” ADUs have been touted by officials as a way to introduce more affordable living options into an exorbitantly priced housing market with a dwindling stock of vacant units. The report estimates the median home price is $695,000 and the median rent is $2,439, price tags that prevent many young families and members of the workforce from living in Napa County.

However, the Jury said the addition of 1,000 new units wouldn’t necessarily address the pricing issue, adding they’d be “unlikely” to meet the affordable housing requirements set forth by the state, based on current building costs, interest rates and amortization periods.

According to Renee Schomp, the newly hired director of the Napa Sonoma ADU Center, these units aren’t aimed at becoming “deed-restricted” affordable housing, but rather to expand the variety of people who can afford to live in the area. Though granny flats do typically rent at about 80% of market price, she said, these types of units are also valuable because they enable a wider variety of individuals – including young families, workforce, those with disabilities and seniors – to live locally and benefit the community.

Junior ADUs, conversions to existing structures such as a garage that don’t exceed 500 square-feet and have an entrance of their own, typically cost less to build and could possibly be considered “affordable” by state standard, the report noted.

The Jury conducted 11 interviews with senior housing development managers with the cities of Napa and American Canyon and Napa County as well as with personnel at the Gasser Foundation and Napa Valley Community Foundation, among others. It reviewed existing state law, documentation from local focus groups, news articles and informational resources provided to the public by local governments.

State lawmakers have made ADUs a focal point of plans to address the California-wide housing shortage. A 2017 law mandated an approval process in all California counties, and Sacramento legislators passed a package effective in January that required the elimination of water, sewage and education impact fees for any ADUs less than 750-square-feet.

Despite prioritization by the state, local numbers have been slow to reflect homeowner buy-in to the process. From 2014 to 2018, a total of only 115 ADUs were completed in the surveyed areas, 56 in Napa County, 5 in American Canyon and 54 in the city of Napa, according to the report.

The Jury believes that if Napa County and its city governments encourage homeowners to build more granny flats by making the process less cumbersome, these numbers might rise.

Currently, the Jury said all three local governments have not adequately addressed the complex approval or building requirements and have failed to sufficiently lower the cost. Together, the expense and difficulty make building an ADU a far less attractive option to otherwise interested homeowners, the report found.

The city of Napa has taken the most steps to respond to state law and make ADU construction a focus, leading to an “acceptable” amount of educational information on planning requirements and fees, the report stated. City Council approved a measure requiring only one document submission and permit application, created a multi-page online guide to the process, conducted three workshops with the public in 2019 and approved a 20-unit housing subdivision that will include six units pre-designed for ADU installation.

None of the three jurisdictions provided a sequential guide, a single point of contact or a visual list of requirements around elements such as parking or setbacks, the Jury said.

Despite the recent ban on impact fees from the state government, uncertainty around cost remains the biggest deterrent to prospective homeowners in putting an ADU on their property, the Jury said.

For standard units up to 750-square-feet, approval fees alone can range from $1,000 to $12,000 between the three jurisdictions, according to the report. It’s most expensive to build in Napa County, followed by the city of Napa and then American Canyon.

Cost to individual homeowners aside, ADUs still run at about half-price compared to other forms of affordable housing and can be built far quicker than the average 18-month for a larger facility, according to Schomp.

The Napa Valley Community Foundation recently rolled out an entire program dedicated to in-person and virtual education on granny flat construction for all of Napa and Sonoma counties. It includes detailed planning steps, approval requirements, and contact personnel for different locations, a cost calculator to determine fees and a vetted list of vendors such as contractors and designers experienced with ADU construction. By the end of 2020, the city of Napa, in particular, even hopes to work with the program to create a number of pre-approved building designs.

Though it applauded these efforts, the Jury did assert that the public sector shouldn’t entirely abdicate the “leadership role” to the Foundation. In its list of recommendations, it advocated the three jurisdictions “promote” the Community Foundation initiative on their respective websites, but that they not rely on them to “improve homeowners’ knowledge on how to build and finance an ADU or junior unit.”

Schomp echoed the sentiment that teamwork will be an effective tool to growing the number of people interested in building ADUs and eventually renting them out at affordable prices to tenants.

“We really want to have an impact, so we are making sure to work closely with all jurisdictions … we have greatly appreciated the collaboration of local jurisdictions in our shared goal of increasing the volume of ADUs, and their efforts indicate commitment to supporting homeowners in their process to build ADUs,” she said.

By the end of the year, the Jury also recommends Napa, American Canyon and the county of Napa all provide a detailed slate of information summarizing the steps and fees associated with construction of a granny flat, name a “dedicated ADU point person” and create pre-approved building plans for easy permitting and construction.

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