As housing prices continue to outpace inflation and wages in the United States, affordable housing becomes more and more difficult for minimum wage workers to obtain. This paper aims to explore the possibility of zoning regulations to allow the widespread construction of Additional Dwelling Units (ADUs).
ADUs are small dwelling units in comparison to the existing unit and can be built in an existing structure, a detached garage, or a standalone structure. ADUs are cheaper to manufacture than new full-scale homes, produce additional income for homeowners, and provide much needed housing at a more affordable price. Many macroeconomic factors continue to contribute to the unavailability of affordable housing. A combination of low wages, low housing stock, and high property values contribute to the housing crisis. The COVID-19 pandemic further exacerbated the impact of these factors, as low-income individuals and families were hit the hardest by increased unemployment rates. In March 2021, 14 million renter households with annual incomes below $50,000 had lost their employment. While the overall unemployment rate has decreased since the beginning of the pandemic, individuals in the lowest income bracket are still experiencing an estimated 22% unemployment rate . Senior housing has become a more pressing issue as the senior population continues to grow and most seniors live on a low monthly income based on pensions and assets. This makes it difficult for many seniors to continue to afford living in metro areas, removing the option of aging in-place.
ADUs are not only applicable to single-family, duplex, or triplex lots. They can also have major effects on large multifamily properties. In Chicago, Illinois, the city government has begun an ADU pilot program in certain neighborhoods to combat the affordable housing crisis. For existing properties that range from one to four units, the government is allowing one backyard house or interior ADU. For larger properties, the program allows for even more units, of which a portion will need to be designated as affordable housing.
ADUs provide a unique solution to both the senior and affordable housing crises. New ADUs give homeowners a potential source of monthly income and increases housing stock in existing neighborhoods. With continued support from local governments, ADUs can play a huge role in helping our cities shore up the supply of housing.
See the following link for the full research paper.
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