Salt Lake City sees increase in mother-in-law apartments, but one key obstacle remains — the price

They’ve been called “low-hanging fruit” in the world of affordable housing.

And in Utah’s capital city, there is new evidence that accessory dwelling units — commonly known as mother-in-law apartments — may prove to be a gradual way of increasing new types of housing. But they can also be expensive to construct.

Since Salt Lake City loosened its rules last fall, it has received at least 27 applications from homeowners seeking to build new units to go with their existing homes, be they basement apartments or over a garage or a separate structure in the backyard.

That’s ahead of the city’s best guess of 25 new requests when the City Council widened where it allows such units in October, after years of at-times intense discussion and testimony from those not keen on the idea.

Four of those applications were filed and later withdrawn, according to city Planning Director Nick Norris — in part because homeowners couldn’t afford to meet city requirements.

“People who want to build them are not always aware of the costs of complying with building code,” Norris said.

All told, rough estimates at City Hall put the cost of building an accessory dwelling unit, or ADU, at $150,000 or more, depending on what it looks like. Obtaining a building permit can also take time, especially for projects located in one of the city’s many historic districts.

The whole process is complex enough, in fact, that Salt Lake City issued a new handbook on the topic in July, with suggestions that homeowners meet with a city planner before getting started.

After years of limiting new ADUs to areas within walking distance of TRAX stops, city leaders approved zoning changes to permit such add-on dwellings citywide, with special conditions for neighborhoods already dominated by single-family homes.

Council members also eased requirements for additional parking spaces, dwelling entrances and setbacks from property boundaries, but still require all ADUs to be licensed with the city and that a property owner live in either the accessory dwelling or the primary home.

ADUs in Salt Lake City can’t be larger than 650 square feet or take up more than 50% of the home lot’s footprint. There also is a height limit of 17 feet or no higher than the main residence if it’s above 17 feet, which has reportedly snagged some homeowners wanting to build ADUs on top of their garages.

Salt Lake City’s experience with these dwellings will be closely watched, especially in light of common concerns from residents and some elected leaders that ADUs are difficult to regulate, can snarl parking and may alter the character of existing neighborhoods.

Nearly two-thirds of Utah cities that participated in a Salt Lake County survey in early 2018 reported they already allowed ADUs under one or more of their zoning codes. But a newly passed state law has prompted many cities to look at expanding their ADU policies to address the ongoing housing shortage.

Utah County passed a new ordinance recently, allowing accessory dwellings of a maximum of 1,000 square feet through unincorporated areas of the county. Others are likely to follow, under a new law requiring cities to take some steps to improve housing affordability — or face losing key state funds for transportation.

“ADUs is a neighborhood approach to housing that still has an impact, worked out between property owners, neighbors and elected city leaders,” said Cameron Diehl, executive director of the Utah League of Cities and Towns, which lobbies for the state’s 248 municipalities.

Some states, including California, have mandated new ADU policies at the state level. But Diehl said Utah has so far let cities customize their approaches to suit their residents’ values and better match housing growth with existing capacity of roads, utilities and other infrastructure.

“It’s an organic growth,” added Jake Young, planning manager for Salt Lake County, who has nudged cities in recent years to allow more ADUs as traditional home prices have escalated.

“It’s one unit at a time," he said. "It’s not a subdivision or an apartment complex with 200 units.”

Individual ADUs, Young said, “have little impact on actual neighborhoods and streets. They often blend in and are unnoticed.” But when many communities allow them, he said, “they make a significant difference in providing a key solution (among others) to the housing gap and deficit we’re now facing.”

Since Salt Lake City’s rule change, there are signs that more architects, builders specializing in remodels, and manufacturers of smaller modular homes have begun to cater to interested customers, particularly families with aging relatives.

Many report that Salt Lake City’s limits on height, setbacks and total size for ADUs continue to hamper some residents — and drive up expenses.

Navigating the rules “can become overwhelming,” said Rob Perez, founder and owner of Mod3, a Salt Lake City company that makes a range of stand-alone small homes. “There are a lot of things to consider.”

The city’s 17-foot height limit, according to one architect, forces some homeowners to dig down to make their ADUs two stories, which adds considerably to the cost.

“There are obstacles for almost everybody,” said David Brach with Brach Design Architecture in Salt Lake City. “It’s so much harder than you think.”

That has, in turn, opened a market niche for modular, premanufactured homes that can serve as ADUs, dovetailing with an existing sector in Utah focused on making micro-dwellings, also known as tiny homes.

“We’re selling them as an investment property for people from Provo to Ogden who are looking for accessory dwelling units,” said Colin Jube, a founding partner of Modal Living, a Utah-based maker of compact homes.

Jube said the firm is working with homeowners in 12 Utah cities wanting to put in ADUs. The company’s standard 430-square-foot unit sells for $95,000, excluding site prep, shipping and other costs that typically bring that price tag to $125,000, he said.

“We wanted to make it so you could get out the door with the lowest cost possible,” Jube said as he showed a model unit on display at City Creek Center.

Even tiny homes, according to Norris, require a foundation under Salt Lake City’s rules. “That’s one thing some people aren’t realizing about placing a prefab unit in the backyard,” the city planner said.

In other cases, homeowners report being required to install in a second sewer line tying the unit to existing lines, at more than $10,000. Whether the dwelling is attached or detached to the main house “doesn’t decide the sewer line question,” said Norris. “It’s just a case-by-case situation.”

Salt Lake City also charges the same impact fees for an ADU that it does for new single-family homes. That comes to about $5,733 per dwelling, including all the fees meant to pay for new police- and fire-protection services and for supporting roads and parks.

Not surprisingly, some cities have seen “a fairly significant spike” in ADU construction when they eliminated impact fees, Norris said. “But, for now, it’s considered a single-family unit and we have to charge them."

City leaders took nine years of what one called "blood, sweat and tears” to debate changes to the ADU ordinance before the council voted 5-1 to adopt it. Council member Charlie Luke — whose District 6 covers portions of the city’s residential east bench — opposed the move, saying the ordinance was “unenforceable.”

The council has said it may revisit the new ADU rules once more numbers are in.