Affordable Housing: What Ann Arbor Can Learn From Santa Cruz, CA

This article originally ran in March, 2013

In the early 2000s, the city of Santa Cruz, California had a problem. The naturally beautiful, progressive city, home of a premier research university, had become such a desirable place to live that housing prices skyrocketed beyond the reach of many who worked, attended school and were otherwise inclined to live there. 
"There was a lack of affordable housing," says Housing and Community Development Manager for the City of Santa Cruz, Carol Berg. "The housing was so expensive, somebody needed two jobs to afford to rent a house."
Sound familiar?
While Ann Arbor is actually twice the size of Santa Cruz, both in population and land area, these circumstances, as well as very similar population density, make the two communities ripe for comparison. According to a housing options study of Santa Cruz, the average home price was $480,000 in 2002. As a result, young professionals and even longtime residents were forced to move away. 
"Employers have a dif?cult time recruiting for positions that pay $50,000, $60,000, or even $80,000," the study says. "[The University of California Santa Cruz] is concerned about a potential 'brain drain' resulting from dif?culties in recruiting new faculty."
The crisis was deemed serious enough for the city to take action. Rather than contend with the political, logistical, and economic challenges of building housing developments, a city-commissioned committee found a solution that was actually already legal in their housing code, but was being underutilized: accessory dwelling units, or ADUs. 
Sometimes referred to as in-law houses or granny units, ADUs are small, apartment-sized houses built behind existing, owner-occupied homes. They are often converted garages or sheds, and become rental income for the property owners and a more affordable rental option for residents. 
What a study identified was that though ADUs were legal in Santa Cruz, they weren't necessarily easy to develop for homeowners - legally, anyway. This resulted in a number of illegal ADUs, and too few legal ones to ease the housing crisis. 
"The city council took the first step to change our zoning to not just allow ADUs," says Berg, "but to encourage them."
This involved lowering parking restrictions on homes with ADUs, encouraging alley access and working with the fire department to develop more affordable fire codes for the units. 
In Ann Arbor, ADUs are currently not allowed within our residential zoning laws. Though the concept has been a part of community conversations for some time, concerns about student sprawl or other disruptions to existing neighborhoods have kept the issue in stasis. 
According to Berg, such concerns weren't overlooked in the development of Santa Cruz' program. "There were two kinds of things we did," Berg says of the development of the ADU ordinances. "One kind was to make it easier for the homeowner to build an ADU, and the other was putting restrictions on how they could be built to protect the neighborhood."
These included requiring that the building materials match or coordinate with the home for aesthetic purposes, limiting ADUs to one story, limiting impact to neighbors, as well as requiring the property owner to occupy the main house or ADU. 
"That was probably the really important one for a university town," Berg says. "That was to protect the neighborhood from, basically, party houses."
Reforming ordinances was just the beginning. Santa Cruz took the additional step of building a program to further encourage the development of ADUs. Program services include ADU Plan Sets Books, which containing ADU prototype concepts designed by local and regional architects and a step-by-step manual walking property owners though the planning, design and permitting process.
According to Berg, the response over the last decade has been nothing but positive, both by homeowners who have built ADUs, and the community in general. In fact, she recalls little to no resistance from residents throughout the launch of the program, which she attributes to their deeply-held principles regarding diversity and equality, which extends into housing.
"Santa Cruz is a very diverse community and prides itself as progressive," Berg says. "So there would be less fight in a community like this that, in general, likes to help all sorts of people have access to housing." 
That forward-looking perspective has served Santa Cruz well. While it is still by no means an inexpensive city, about 55 percent of the housing is now made up of rental units, and those maintain about a 2 percent vacancy rate most the time. 
Where the ADU program has truly benefited the community, Berg adds, is by filling the gap left between government-subsidized low-income housing and market-rate rentals that were out of so many would-be residents' budget - the very niche that was so lacking to begin with.
"All the stars aligned," says Berg. "We had a grant [to develop the program], the acceptance of the community and a council that was brave enough to encourage them."
The program has gone so well, in fact, that the city has offered it up as a template of sorts for other cities. They have lent their manual to other California cities, as well as Seattle, for them to use as basis for developing their own. It's an important program to share, Berg says, not just to solve a tricky housing issue, but also because it's the right thing to do for the environment. 
In fact, Santa Cruz's long held commitment to sustainability is what encouraged them to turn to ADUs in the first place. Long ago, the city made the decision not to grow outward, but instead through infill. 
"The community pretty much put a greenbelt around the city," says Berg.  "They decided they didn't want people to go buy a farmer's field and put housing in it. So we had to finesse housing inside the city boundary itself." 
Which, she adds, encourages less driving, more pedestrian traffic and greener lifestyles altogether. With that in mind, it seems the number of things Santa Cruz and Ann Arbor have in common goes on and on. Whether or not adding the ability of homeowners to offer affordable, well regulated ADUs to that list is still up for debate.

Natalie Burg is a freelance writer, Concentrate's development news editor, and a regular contributor to Metromode and Capital Gains in Lansing.