Report Reveals that Best Practices to Accelerate ADU Development Are Not Being Implemented by Cities Due to Lack of Resources 

TORRANCE, CALIF., January 31, 2024 – A South Bay Cities Council of Governments (SBCCOG) study indicates that most accessory dwelling units (ADUs)—known as “granny flats”—in the South Bay are being rented at market rates, or not rented out at all and instead used for personal use or to house friends and family. The survey was completed by residents and tenants in the cities of El Segundo, Gardena, Hawthorne, Hermosa Beach, Manhattan Beach, Rancho Palos Verdes, Redondo Beach and Rolling Hills. Funding for the study was provided by the Southern California Association of Governments’ (SCAG) Regional Early Action Program (REAP), though the California Department of Housing and Community Development, to spur affordable housing production.  

ADUs have recently come to the forefront of possible solutions to help cities meet their Regional Housing Needs Allocation (RHNA) requirements to further the state’s economic, fair housing and environmental objectives. RHNA is a state-mandated process established in the 1970s. It requires every local jurisdiction to ensure there will be enough sites appropriately zoned for affordable housing construction to accommodate projected growth as calculated by the state every eight years. Jurisdictions that don’t meet this requirement are subject to penalties and legal challenges. The state has identified acceleration of ADU construction as a possible affordable housing solution. The state of California has made $40,000 available in grant funding for families earning up to $84,160 or below per year to build an ADU.  

“The state of California is actively encouraging construction of ADUs, but our findings indicate this type of additional density is not helping reach the goal of increasing the affordable housing inventory,” said Barry Waite, Lomita City Council member and SBCCOG board member. “Building affordable housing will likely require subsidizing it or building on affordable land, which is very difficult to find in the South Bay.” 

The survey was mailed to 404 unique residents of primary residences (ADU applicants) and 413 unique tenants (ADU occupants) in August 2023. Door-to-door outreach was also conducted to increase response rate. In total 93 surveys were completed—71 by residents of the primary residences and 22 by tenants of ADUs. For homeowners, the goal was to learn what went well, and what hurdles they faced in obtaining permits to build their ADU. It also sought to learn how the ADU was being used, whether for an elder who is aging in place, or a child who is a college student. It asked whether the ADU was being offered as free housing or to bring in rent.   

The study found 45% of owners are renting out their ADU, while 20% are allowing a relative or friend to stay in the unit for free, and 14% are using it for something else not specified. The remaining 26% were seeking tenants, had an ADU that was not livable or had other unspecified reasons for not renting the unit. Half of the units being rented out were occupied by a stranger, while 51% were occupied by a relative, friend or someone else unspecified. The study reported rents range from $600 to $4,500, with an average rent of $1,834. Average rent in Los Angeles for a 790-square-foot apartment is $2,795 according to Zillow. The Housing Department, as reported by HEY SOCAL, indicates “very low-income” occupants of a studio unit must pay no more than $809 monthly and “low income” tenants must be charged no more than $1,388 for a three-bedroom unit.   

The study also looked at whether ADUs advance the state’s environmental goals by reducing auto travel. It found no evidence that ADUs prompt shorter vehicle trips, which would lower emissions. It also found no decrease in auto dependence, with 95% of occupants owning at least one car. ADU tenants also reported onsite parking to be in short supply, provided by only 23% of owners. Half of the occupants cited difficulty in finding on-street parking and transit use was rare, not meeting state goals to increase usage.  

The study’s additional key findings:  

  • The biggest challenges for owners seeking to develop ADUs:
    • Permit fees – 39% 
    • Local approval process – 36% 
  • Additional constraints identified by respondents included:
    • 30% cost of construction
    • 29% delays and cost overruns
    • 23% design constraints
    • 20% construction challenges

Finally, the study examined what city policies and practices could accelerate ADU development. While it identified 25 such practices, it found that none had been adopted by South Bay cities, primarily due to insufficient staffing, lack of funding and availability of planning professionals.  

SBCCOG worked on the study with a consultant Black & Veatch. The complete findings of the study can be reviewed at southbaycities.org/programs/housing/.  

ABOUT SOUTH BAY CITIES COUNCIL OF GOVERNMENTS:  

The South Bay Cities Council of Governments (SBCCOG) is a joint powers government agency of 16 cities and the County of Los Angeles which share the goal of maximizing the quality of life and productivity of the subregion. Within this structure, cities and Los Angeles County maintain the qualities and characteristics that make them unique and independent, while also coming together collectively to address issues of common interest for a greater good of the communities through partnership, persuasion, performance and advocacy. For more information about the SBCCOG visit southbaycities.org. 

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