Fears of an Airbnb invasion among the holdups for SLC’s loosening of ADU rules

New compromises emerge in push for more granny flats and backyard cottages.

(Trent Nelson | The Salt Lake Tribune) A sample accessory dwelling unit, or ADU, made by Salt Lake City-based Modal. As they combat a housing shortage, leaders in Utah's capital city are honing in on new policies to promote more ADU construction in residential and commercial zones

Worries persist over some of the ways Salt Lake City proposes to boost construction of add-on dwellings across wider swaths of its residential and commercial areas.

A divided City Council has delayed a final vote to April 4 on new tweaks to its accessory dwelling ordinance as the specter of short-term rentals and the swollen costs to homeowners of building ADUs loomed over weekslong attempts at consensus.

Support for new rules on dwellings such as granny flats and backyard cottages is growing after months of debate, to be sure, especially around streamlining city reviews, expanding where ADUs can be built and loosening rules on their size, height, required parking stalls and their location relative to a primary dwelling.

The hottest dispute now is over rules that property owners who build ADUs also must live on-site, known as owner-occupancy. As a result, Darin Mano, the council chair, is floating yet another compromise that would enforce the owner-occupancy requirement only in less dense neighborhoods zoned for single-family homes, while waiving it in other zones.

“It’s a small change,” he said as he continued to seek support from colleagues for the ordinance, “but an important one.”

(Salt Lake City Planning) Accessory dwelling units would be permitted in a much larger area of Salt Lake City, under a proposal in the works for months at City Hall.

Tweaks to ADU rules in 2018 and years before, Mano and others have noted, yielded a relative trickle of new units. Now, the city is up against a historic shortage of affordable homes and alarming patterns of longtime renters getting displaced, prompting the council and Mayor Erin Mendenhall to want to wipe away barriers on multiple fronts to these tiny dwellings.

“I’m trying to make as much change as possible,” Mano said of the revisions. “I feel like there has been over a decade that we’ve been talking about this and, to date, the ordinance hasn’t resulted in a significant increase in housing stock.”

Mendenhall, in a rare move, has personally urged the council to retain owner-occupancy across residential areas to avoid creating incentives for private-sector investors to buy into the city’s housing stock. Removing that rule, she said, also threatened to jeopardize the ability of property owners to build wealth through homeownership.

“When you make it easier for a corporate entity to buy that house in that neighborhood and turn it into two for-profit residential units,” Mendenhall said, “we lose the neighborhood stability that would otherwise be easier to achieve with the ADU ordinance. I believe our residents want to see that left in place.”

Anxiety over existing growth, short-term rentals

The latest proposed rules would make external ADUs automatically permitted as a land use in additional residential areas, most commercial zones and on properties that already allow a mix of uses — although homeowners and businesses still would need building permits. State law allows internal ADUs in all residential zones, so the city’s rules affect external dwellings alone.

Mano’s compromise would limit owner-occupancy to properties with single-family homes and ADUs on lots currently zoned foothill residential, R-1, SR-1 or SR-1A. There’s talk of having that carve-out expire, as well, after monitoring neighborhood impacts for several years.

(Courtesy of Salt Lake City Planning Department). New accessory dwelling units — like this backyard unit in Salt Lake City — are seen as a way to ease Utah's housing shortage, but they aren't always easy to build.

The draft rules would let ADUs be up to 1,000 square feet and require one off-street parking space per unit, except in neighborhoods in proximity to bike lanes and transit lines or for homes with enough space for on-street parking in front of the primary residence.

Anxiety over other effects remains high, though, among many residents and several community council leaders — as surfaced in two public hearings full of raw testimony about how new regulations might worsen neighborhood impacts from the latest influx of rapid development.

Perceived negative effects and the growing popularity of short-term rentals also have overshadowed the discussion. Scores have weighed in since early February, with fears that new ADUS would be listed on Airbnb instead of being offered to locals, bolstering strong sentiments in support of the owner-occupancy issue.

Lifting the requirement in some multifamily neighborhoods would threaten to exacerbate those effects on neighborhoods within existing transit-zoning corridors already seeing lots of development, warned Chase Ward, a resident of the Guadalupe neighborhood.

“The majority of those who can afford ADUs are those with deep pockets,” he said, “or those who have access to deep pockets like developers.”

Added Brian Burnett, a resident of the Foothill-Sunnyside area: “You’re just encouraging something that will further disintegrate good family neighborhoods.”

Others said the rule created unnecessary obstacles to building ADUs, when the city needs more housing of all types.

West-sider Landon Kraczek told the council he was eager to build an ADU to house a friend and his wife but that the rule stood to limit his future life moves, such as moving away temporarily for work or graduate school or even traveling once he retires.

“There are just so many situations,” Kraczek said, “where this requirement makes an ADU feel like a ball and chain instead of an asset.”

Preserving older homes — and addressing costs

Council member Chris Wharton urges colleagues to examine “unintended consequences” from the ordinance that might hasten the ongoing demolition of older, historic homes across the city, “where we might be inadvertently incentivizing something that is not in line with the city’s housing goals.”

City Planning Director Nick Norris said the ADU ordinance was unlikely to affect those trends, given current intense demand and high costs associated with the current single-family housing market.

“For many people, it’s more financially viable to demolish and rebuild than to expand and maintain,” Norris said. “That is something that this proposal or any other proposal we have isn’t going to change.”

At the urging of council member Ana Valdemoros, the council has backed the idea of spending $1 million in financial support to homeowners wanting to build ADUs, in light of a recent steep rise in construction costs. Details on what form that spending takes are still to be sorted out.

The council is also committing to hiring two full-time civil enforcement officers tasked with ensuring new ADUs aren’t deployed as short-term rentals on sites such as Airbnb and VRBO.

Officials say they intend to revisit portions of the ADU ordinance within three to five years, after beefing up the data the city collects on the units built, including information on barriers to construction and effects on neighborhoods.

“I hope that we agree ultimately to create a mechanism to gather the data,” council member Alejandro Puy said, “so we can all learn more if these rumors are true.”