ADU Pilot Program Draws 34 Applicants

The Pasadena Housing Department has received 34 applications as part of its Second-Unit Accessory Dwelling Units (ADU) Program, a new city affordable housing initiative that provides incentives to homeowners who add an affordable rental unit onto their property.

According to Housing Director William Huang, the city has received 20 applications for new ADUs, and 14 for existing unpermitted structures.

The program provides homeowners financial assistance to build an ADU through new construction or convert their garage into a rental unit. Assistance is also available to rehabilitate and bring up to code an existing unpermitted “granny flat,” or illegal garage conversion.

For new construction, the program can provide up to $150,000 in construction loans, payable in three years at one percent simple interest. The loan must be refinanced prior to the end of the deferred payment period.

For work to bring an unpermitted rental unit up to code, the program can provide a maximum $75,000 20-year loan at one percent simple interest, with deferred payments for the first five years.

The deadline has passed to participate in the program.

The city has received $4,050,000 in funding requests, which far exceeds the $800,000 in available funding. Funds will be awarded in January.

New laws allow owners of single-family homes to build two additional units on their lots, in some cases within four feet of the property line.

Since April 2018, the city has received 142 applications for ADUs, with 35 permits being issued. Another 74 applications are currently being reviewed. Four additional applications have been approved and can advance after the applicants complete the permit process. In addition, 20 projects have been inspected and completed, and nine permits have been canceled.

Construction of ADUs has increased significantly in California in recent years.

From 2018 to 2019, permits skyrocketed from almost 6,000 to nearly 16,000, according to a study by the Terner Center for Housing Innovation.

During that same period, ADU completions more than tripled from 2,000 to almost 7,000 in Los Angeles, San Diego, and the Bay Area.