Responding to Changing Households: Regulatory Challenges for Micro-Units and Accessory Dwelling Units
In many areas of the country, the existing stock of rental housing falls significantly short of the need, both in terms of affordability and the sizes and configurations of available housing matching the needs of prospective tenants. In response to these and other concerns, a number of jurisdictions have revised their regulations to permit the development of more compact rental housing units, including both accessory dwelling units (ADUs) and micro-units.This paper provides a detailed analysis of the regulatory and other challenges to developing both ADUs and micro-units, focusing on five cities: New York; Washington, D.C.; Austin; Denver; and Seattle. This research was conducted as part of the What Works Collaborative. For more, see the accompanying research brief, Compact Units: Demand and Challenges; download a zip file with city-level data; or view the press release.
Nearly half of all poor, urban renters in the United States live in rental buildings of fewer than four units, and such buildings make up nearly half our nation’s rental housing stock. Yet small rental properties remain largely overlooked by researchers. We present two reports—from New York City and Baltimore—both providing suggestive evidence, drawn from a variety of sources, about the characteristics of small rental housing. We find that while small buildings offer lower rents and play a crucial role in housing low-income renters, these lower rents are largely explained by neighborhood location. Ownership matters, however. In New York, lower rents are associated with small buildings with resident landlords. Further, we also find better unit conditions in small rental buildings when compared to most larger properties, especially in small buildings with resident landlords. In Baltimore, we find that smaller-scale “mom-and-pop” owners dominate the small rental property market, but that the share of larger-scale owners increases in higher poverty areas of the city. The properties owned by these larger-scale owners receive fewer housing code violations and that these owners appear to invest more frequently in major improvements to their properties.
In emergency situations like Hurricane Sandy, the city’s system for tracking rental property owners can serve as a crucial resource. However, a new Furman Center report finds that the vast majority of landlords required to register with the city fail to do so. Only 23 percent of rental properties are registered with the city, and only 61 percent of NYC’s renters live in buildings with current registrations. The report outlines strategies for boosting rental registration to help make the registration ordinance a fully effective resource, including greater outreach and stronger penalties.