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Second Units

At a Glance

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Type: Development type
Where tool is used: Residential neighborhoods
Timeline: Short-term
Who implements: Homeowners (but must be allowed by jurisdiction)
Relative density impact: Low

Small living units that share a lot with single family homes come in many forms and have many names—second units, junior second units, granny flats, in-law units, and accessory dwelling units (ADUs). Second units can be attached to the main house, a second story on a garage, a converted garage, or a stand-alone building. Whatever the configuration, second units are required to have a kitchen, bathroom, and a place for sleeping.

In the past, second units were often built as separate living quarters for relatives. Today, in this housing crunch, they can provide affordable rental housing for tenants. They can also be residences for older adults who want to downsize but stay in their neighborhoods. Critically, second units can increase the amount and variety of a community’s housing stock with limited cost to the jurisdiction, while maintaining the character of residential neighborhoods.

To encourage homeowners to construct second units on their property, jurisdictions can offer loan programs, fee waivers, or tax credits to offset the cost of new construction or renovation. These incentives can also be designed to encourage homeowners to make units affordable at or below 80% of area median income.

The California leader in second unit development and promotion is the City of Santa Cruz, which has developed a comprehensive second unit program with how-to manuals and pre-approved designs, and has a partnership with Habitat for Humanity to build second units to help “at risk” seniors age in place. In San Mateo County, the following jurisdictions have adopted California compliant second unit ordinances:

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Key Benefits

  • Second units maintain the look and feel of existing single family neighborhoods while adding more housing variety and choices through infill development.
  • Second units do not require significant capital investment by the jurisdiction.
  • Second units can provide more affordable housing stock. Their smaller size relative to the main unit generally translates to a lower rental price, and some second units may benefit from shared or lower utility costs as well.
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Community Considerations

  • Set-back requirements and placement of windows and entrances can help ease neighbors’ concerns about privacy.
  • Second unit ordinances can specify that homeowners must occupy the main unit or second unit, addressing neighbors’ concerns about living next to rental property.
  • Covered parking should not be required and parking in the front yard set-back and tandem parking should be allowed. Some jurisdictions institute residential parking requirements with second unit.
  • A key consideration for jurisdictions adopting second unit ordinances is how to address pre-existing or illegally installed second units.
  • Second unit ordinances can be designed to exclude ADU use for short-term rentals (e.g. Airbnb).
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Community Engagement Strategies

  • Educate your community: Conduct community information event.
  • Incentivize your community to engage: Offer low-interest loan programs and reduced or waived planning and development fees.
  • Provide informational and educational resources: Develop pre-approved design templates and how-to manuals. Develop a second unit website and video for public television.
  • Engage in-person: Host open houses or second unit house tours to let community members see a range of unit types.
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