Affordable housing options in 2020: granny flats and garage apartments aren’t a thing of the past, they’re in high demand all over the U.S.
Affordable housing options are scarce all over the country.
Americans working full-time at minimum wage can’t afford a one-bedroom rental in 95 percent of U.S. counties, according to a report by the National Low Income Housing Association (NLIHA). In order to afford a fair market rental – “nothing luxurious,” as the report calls out – without spending more than 30 percent of their income, they would need to work 79 hours at minimum wage each week (nearly two full-time jobs) or make $19.56 per hour of work on a regular full-time schedule.
New research by Freddie Mac spotlights the tremendous demand for accessory dwelling units – affectionately known as granny flats, garage apartments and in-law suites – as an affordable housing option for people of all ages. Seventy thousand properties with accessory dwelling units were sold in 2019, compared to just 8,000 in 2000 and 8,000 accessory dwelling units were rented in 2019, compared to less than 1,000 in 2000.
“The nation’s affordable housing crisis has intensified in this turbulent economic environment, and accessory dwelling units are increasingly providing a viable affordable housing option,” said Sam Khater, Freddie Mac’s Chief Economist. “This analysis is both unique and large in scale, giving us insight into the growing movement of accessory dwelling units. Across the U.S., Portland, Dallas, Seattle, Los Angeles, and Miami metro areas have led the remarkable growth in accessory dwelling units.”
Affordable Housing Options in 2020: Granny Flats and Garage Apartments
Types of Accessory Dwelling Units
According to the report by Freddie Mac, “Accessory dwelling units can be attached or detached, depending on their location relative to the primary residence. Attached accessory dwelling units are either carved out of interior spaces or connected to the main structure—think of basement conversions or granny flats above an attached garage. Detached accessory dwelling units, such as guest cottages, garden suites, and carriage houses, are built free-standing from the main structure and are typically located in the backyard or over a detached carport.”
States like Georgia, Florida, Massachusetts, Pennsylvania and Virginia have a higher concentration of attached affordable housing units and states like Washington, California, Nevada, Arizona, California and Texas have a higher concentration of detached affordable housing units.
Cost to Build Affordable Housing Options like Accessory Dwelling Units
Construction costs to build affordable housing units are much less than that of a traditional single-family home because no extra land must be purchased. The median cost of building an attached accessory dwelling unit in Portland is $45,000 and a detached accessory dwelling unit is $90,000 while the median home price is $290,000. At less than one-third of the price of traditional residences, accessory dwelling units are an affordable option for homeowners wanting to provide independent living spaces close by for their family members or for homeowners who are interested in earning rental income.
Where Is Demand for Affordable Housing Options Highest?
Half of the 1.4 million accessory dwelling units that Freddie Mac identified were in the rapidly expanding Sunbelt states of California, Florida, Texas and Georgia. The fastest-growing metros, each with double-digit growth since 2015, are Portland, Dallas, Seattle, Los Angeles and Miami.
More on Topics Related to Affordable Housing Options, Granny Flats and Garage Apartments
COVID-19 Housing Impact: Which Homeowners Are Most Vulnerable?
New Report Shines Spotlight on Scarcity of Affordable Housing
Buying vs Renting a Home in 2020
Retirement Housing Costs and the Effects of Inequality
Is the Tiny House Trend a Good Investment?
Leave A Comment