January 23, 2020

Allowing Accessory Dwelling Units Would Contribute to Housing Affordability in Virginia

Testimony before the Virginia House of Delegates, Counties, Cities, and Towns Committee, Land Use Subcommittee
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Chair Heretick and members of the subcommittee, thank you for inviting me here today to comment on the important issues of accessory dwelling units and land use regulations more generally. I’m Emily Hamilton. I’m a research fellow at the Mercatus Center at George Mason University, where I study housing affordability and land use regulations in the Mercatus Center’s Urbanity Program. Today, I have three key points to make on the issue of preempting local prohibitions of accessory dwelling units:

  1. Restrictions on the right to build housing in Virginia are responsible for high housing costs.
  2. Allowing homeowners across the state to build accessory dwelling units would be an important step toward permitting a relatively affordable type of housing to be built.
  3. State policymakers have an important role to play in setting limits on how much localities can restrict the right to build housing. Accessory dwelling units are banned in most single-family neighborhoods in the state, and allowing them to be built is one way the General Assembly can improve housing affordability.

Land Use Regulations Limit Property Owners’ Right to Build Housing and They Drive Up Housing Costs

Land use regulations limit property owners’ rights to build housing. When increasing demand for housing meets a market where zoning rules constrain housing supply—as in high-cost regions in the commonwealth—the result is that a limited supply of homes becomes more expensive, and lower-income families are forced to look elsewhere. This outcome harms the state’s most vulnerable residents and undermines Virginia’s continuing role as a center of economic opportunity.

Counties and cities across Virginia have many rules that limit the quantity and type of homes that can be built, including minimum-lot-size regulations, height limits, and bans on accessory dwelling units stand in the way of new housing construction. Local zoning rules allow only single-family homes to be built in the vast majority of Virginia’s residential areas.

In large part owing to these rules, many residents across the state are suffering from high housing costs. Housing affordability gets the most attention in the DC suburbs, but many residents struggle to find housing that fits within their budget in the Hamptons Roads region and Charlottesville in particular. Across the state, nearly half of the renters who earn 80 percent or less of the median income for their region are housing cost burdened, meaning they spend more than 30 percent of their income on rent.

Housing Affordability and Accessory Dwelling Units

HB 151 would give homeowners in the Commonwealth the opportunity to build an accessory dwelling unit, such as a backyard cottage, attached mother-in-law suite, or a basement apartment. Accessory dwelling units offer homeowners several potential benefits. They create the potential for homeowners to offset a portion of their mortgage payments by renting out part of their space.

They also create opportunities for greater housing flexibility to meet the needs of the country’s changing demographics. Accessory dwelling units provide ways to make intergenerational living feasible, which is particularly important with the country’s aging population. AARP supports accessory dwelling units as a housing solution that can allow aging adults to live with family members in a home built to meet their accessibility needs.

Accessory dwelling units also have the benefit of being one of the most affordable types of housing that can be built. Because they’re built on land that’s currently attached to another single-family home, their land cost is zero. They’re often more affordable than alternative types of housing. In Washington, DC, basement apartments are the most common type of accessory dwelling unit. They tend to rent for hundreds of dollars less per month than standard one-bedroom apartments in the same neighborhood.

The State Role in Allowing Accessory Dwelling Units to Be Built

Zoning and other land use regulations are generally implemented at the local level, but the state has an important role to play in setting limits on how much localities may stand in the way of new housing being built. Because localities are “creatures of their state,” states have the legal authority to set limits on local regulation. The effects of local rules that prevent homes from being built in one locality spill over to the next. Local land use regulations that limit population growth, economic growth, and income mobility within one city or county limit growth and opportunity for the state as a whole.

Conclusion

Housing affordability is a central challenge in the lives of many Virginia residents, and its principle cause is local land use regulations that limit property owners’ rights. Allowing homeowners across the state to build accessory dwelling units is one way to increase housing choice and allow for a more flexible housing supply. Stepping in to set limits on local land use regulations and to increase homeowner rights is an appropriate role for state policymakers because local land use regulations that stand in the way of housing affordability and economic opportunity affect the entire state.