Black boxes and gray spaces Black boxes and gray spaces: how illegal accessory dwellings find regulatory loopholes Questor Lau May 2014 Submitted towards the fulfillment of the requirements for the Doctor of Architectural degree. School of Architecture University of Hawaiʻi Doctorate Project Committee Pu Miao, Chairperson Ashok Das John P. Whalen 1 Black boxes and gray spaces GUIDE TO THE READER This thesis is divided into I, II and III Parts. While the information overlaps, each Part is unique. Part I: The Short Version Only the most powerful points; least reading. Part II: An Open Letter for Change (Attention politicians) This is a rebuttal to a 2011 letter written by the Department of Planning and Permitting explaining why an Accessory Dwelling Unit Resolution from the City Council should not be acted upon. Part III: The Long Version Intended to supplement, but not replace, the Short Version. Specific Recommendations and Further Research ideas are included here. 3 University of Hawai`i ABSTRACT Honolulu has one of the highest costs of living and the most unaffordable real estate (relative to income) in the nation (NILHC 2014) (Performance Urban Plannning 2012). Meanwhile, the current state of regulation in Honolulu is like a Black Box: perceived as slow, confusing and uncertain. In response, communities manifest Gray Spaces such as Illegal Accessory Dwellings (iADUs). Symbolically and physically, the ubiquity of iADUs lies in their agility to circumvent Black Box restrictions while preserving owner and users’ flexibility of use. When homeowners obtain permits for rooms labeled as “TV” or “Rumpus Room” and then (without a permit) convert the use of these spaces into an independent dwelling unit, they are cultivating ambiguity, using gray areas within the zoning code as a form of urban-economic resilience. Thus, when urban plans do not meet the needs of the community, homeowners respond by finding loopholes in land use regulations, using these types of living arrangements to create needed rentals (Reade and Di 2000). This paper highlights one such irony created by this semantic game: a structure can be built-to-code, but how it is used – can still be illegal. For example, when a floor plan is designed with a separate entry and kitchenette, it strongly suggests an eventual use as a separate dwelling unit. Thus, the rate at which Illegal Accessory Dwellings are created can be estimated by quantifying such suspicious floor plans. From 2005-2012, Illegal Accessory Dwellings comprised a low of 30% up to 46% of all new residential dwellings units created (not counting apartments and hotels). The highest rate of production was in 2008, during the Great Recession. Thus, this paper suggests that not only do Illegal Accessory Dwellings contribute a substantial number of units to the overall housing supply but also that homeowners increasingly rely on them during poor economic conditions. This research also serves as an example of how big data (ie. building permit information) is transforming people’s ability to understand their communities and how GIS maps can help spatially visualize data, thereby bolstering civic engagement. This paper also raises issue of US Census undercounting of “housing units”. Given the significant number of this type of housing, new methods that enable researchers to more accurately portray actual vs planned density, could potentially shift the official landscape of urban growth, infrastructure, and resource allocation. Research methods include correlational research, GIS mapping and case studies to explain how homeowners circumvent the rules. Key Words: Illegal Accessory Dwelling Unit (iADU), Secondary Units, Census Undercounting, Zoning Enforcement 4 Black boxes and gray spaces TABLE OF CONTENTS GUIDE TO THE READER ...................................................................................................... 3 ABSTRACT ........................................................................................................................... 4 1 PART I: The SHORT VERSION OF THIS THESIS ............................................................ 1 1.1 INTRODUCTION .............................................................................................................................................................. 1 1.2 AFFORDABLE RENTAL HOUSING .......................................................................................................................... 3 1.3 DIFFICULT TO ENFORCE ............................................................................................................................................... 4 1.4 CASE STUDY ..................................................................................................................................................................... 4 1.5 METHODOLOGY ............................................................................................................................................................. 5 1.6 FINDINGS .......................................................................................................................................................................... 7 1.7 DISCUSSION ................................................................................................................................................................... 10 1.8 CONFRONTING BLACK BOXES WITH GRAY SPACES .......................................................................................... 15 1.9 HARM MINIMIZATION ................................................................................................................................................. 16 1.10 MODERATING EXCESSIVE CONSUMPTION ........................................................................................................ 17 1.11 CONCLUSIONS + FURTHER RESEARCH ............................................................................................................... 18 Bibliography ..................................................................................................................... 25 PART II: AN OPEN LETTER FOR CHANGE .................................................................. 32 APPENDIX II-A .................................................................................................................. 59 PART III: THE LONG VERSION ................................................................................... 88 1. INTRODUCTION ............................................................................................................ 88 1.1 WHAT IS A SECONDAY DWELLING UNIT (OHANA UNIT)? ................................................................................. 90 1.2 AFFORDABLE RENTAL HOUSING .......................................................................................................................... 91 1.3 THE FORGOTTEN PRIVATE SECTOR ..................................................................................................................... 93 1.4 REGULATION ADDS TO HOUSING COSTS .......................................................................................................... 94 5 University of Hawai`i 2. USE vs STRUCTURE VIOLATIONS ................................................................................ 96 2.1 DIFFICULT TO ENFORCE ............................................................................................................................................. 96 2.2 EASILY CONVERTED SPACES ..................................................................................................................................... 97 2.3 THE RECREATION ROOM LOOPHOLE ..................................................................................................................... 97 2.4 THE SEWER FEE LOOPHOLE....................................................................................................................................... 99 2.5 AFFORDABLE HOUSING LOOPHOLE ................................................................................................................... 100 3. Current Rules Encourage Illegal Behavior ............................................................... 101 3.1 REGULATIONS: OHANA UNITS VS REC ROOMS (USED AS A RENTAL UNIT) ....................................................... 102 3.2 EFFECTS OF THESE REGULATIONS ON THE COMMUNITY ............................................................................ 104 3.2.1 INCREASED FIRE HAZARD ................................................................................................................................ 104 3.3 RULES HAVING THE OPPOSITE EFFECT ................................................................................................................ 106 4. RESTRICTIONS SQUEEZE OHANA UNIT PRODUCTION ............................................ 107 4.1 DECLINING PRODUCTION CORRELATED WITH INCREASING REGULATIONS .................................................................. 108 4.2 REMOVING OHANA SIZE RESTRICTIONS ......................................................................................................................... 111 4.3 SECOND UNITS IN MAUI VS HONOLULU ....................................................................................................................... 113 4.4 THE ADU PROGRAM IN SANTA CRUZ ........................................................................................................................... 116 4.5 RATES OF 2ND UNITS IN SANTA CRUZ VS MAUI VS HONOLULU ..................................................................................... 117 5. BENEFITS OF More Ohana Units ............................................................................... 118 5.1 FLEXIBILITY OF USE ......................................................................................................................................................... 118 5.2 AFFORDABLE RENTALS ................................................................................................................................................... 118 5.4 NEIGHBORHOOD DIVERSITY ........................................................................................................................................... 119 5.4 EASE OF IMPLEMENTATION ............................................................................................................................................. 120 5.5 ECONOMIC STIMULUS ..................................................................................................................................................... 120 5.6 INCREASE GOVERNMENT REVENUE ................................................................................................................................ 121 5.7 SUPPLEMENT SENIOR INCOME ....................................................................................................................................... 121 5.8 AGING-IN-PLACE ............................................................................................................................................................ 122 5.9 BUILT GREEN ................................................................................................................................................................... 122 5.10 REDUCE COMMUTE TIME ............................................................................................................................................. 123 124 6 Black boxes and gray spaces 6. QUANTIFYING ILLEGAL UNITS .................................................................................. 124 6.1 HOW MANY POTENTIAL OHANA UNITS ........................................................................................................................ 124 6.1.1 Existing Rate of Ohana Units Production as Lower Bound ..................................................................... 124 6.1.2 Existing Rate of Recreation Room as Upper Bound .................................................................................. 124 6.1.3 Comparison with Santa Cruz Rates of Production .................................................................................... 125 6.1.4 Using Honolulu’s Historical Rates of Production ....................................................................................... 125 6.2 HOW MANY PUBLIC HOUSING UNITS ............................................................................................................................ 127 6.3 Illegal Units in San Francisco ............................................................................................................................. 127 6.4 METHODS OF FINDING ILLEGAL UNITS IN THE LITERATURE ........................................................................................... 128 6.3 USING BUILDING PERMITS TO FIND UNAPPROVED UNITS ............................................................................................ 130 6.4 POTENTIAL SOURCES OF ERROR ...................................................................................................................................... 130 6.5 BUILDING PERMIT APPROACH VS OTHER METHODS ..................................................................................................... 130 6.6 USING THE WRONG TOOLS ............................................................................................................................................ 131 6.7 CASE STUDIES: THE REC ROOM LOOPHOLE ILLUSTRATED ............................................................................................ 132 6.7.1 Case Study #1 ..................................................................................................................................................... 132 6.7.2 CASE STUDY #2 ........................................................................................................................................................... 134 6.7.3 CASE STUDY #3: .......................................................................................................................................................... 137 6.8 NOT A DETERRENT .......................................................................................................................................................... 139 7. Mapping the distribution of Illegal Units ................................................................ 140 7.1 SEARCH CRITERIA ............................................................................................................................................................ 140 7.1.1 Distribution of Rec Rooms across Honolulu ............................................................................................... 141 7.2 GENERAL DESCRIPTION OF FINDINGS ............................................................................................................................ 142 7.2.1 POLITICAL DIVISIONS ................................................................................................................................................... 142 7.2.2 Analysis of Rec Room Data ............................................................................................................................. 142 7.3 DISCUSSION OF FINDINGS .............................................................................................................................................. 143 7.3.1 Rec Rooms as Gray Spaces .............................................................................................................................. 143 7.3.2 Lack of Information of Lack of Choice? ........................................................................................................ 145 7.3.3 Low Level of Public Awareness ....................................................................................................................... 146 7.3.4 Show NIMBYs the Status Quo ......................................................................................................................... 146 7.4 FOREGONE SEWER REVENUE .......................................................................................................................................... 149 8. OBJECTIONS TO CHANGE .......................................................................................... 151 7 University of Hawai`i 8.1 OBJECTION #1: CONCERNS ABOUT PARKING ................................................................................................................ 151 8.1.1 Counterargument to Concerns about Parking .......................................................................................... 151 8.2 OBJECTION #2: CITY CANNOT ENFORCE EXISTING RULES .............................................................................................. 152 8.2.1 Counterargument to City’s Lack of Enforcement of Existing Rules ....................................................... 152 8.3 OBJECTION #3: TOO MANY OHANA UNITS WILL CHANGE THE NEIGHBORHOOD ......................................................... 153 8.3.1 Counterargument: Ohana Units Would Not Changing the Neighborhood ....................................... 153 9. RECOMMENDATIONS................................................................................................. 156 9.1 PROPOSED AMENDMENTS TO ZONING CODE (HONOLULU LAND USE ORDINANCE) ................................................. 156 9.2 PROPOSED AMENDMENTS TO THE BUILDING CODE ...................................................................................................... 159 9.3 PROPOSED AMENDMENTS TO WASTEWATER RULES ..................................................................................................... 160 9.4 ADD A REPORTING REQUIREMENT ................................................................................................................................. 161 9.5 GOVERNMENT TRANSPARENCY ...................................................................................................................................... 162 9.6 RAISE PERMIT FEES IF IT MEANS FASTER PERMITS .......................................................................................................... 163 10. CONCLUSION ............................................................................................................ 164 10.1 REALIGNING PUBLIC AND PRIVATE INCENTIVES ........................................................................................................... 164 11. IMPLICATIONS AND FURTHER RESEARCH ............................................................. 167 12. Bibliography ............................................................................................................. 171 13. APPENDIX A .............................................................................................................. 175 14. APPENDIX B .............................................................................................................. 177 15. APPENDIX C .............................................................................................................. 182 15.1 THE HISTORY OF OHANA UNITS .................................................................................................................................. 182 16. APPENDIX D .............................................................................................................. 186 17. APPENDIX E .............................................................................................................. 189 18. APPENDIX F .............................................................................................................. 191 8 Black boxes and gray spaces PART I PART I: THE SHORT VERSION OF THIS THESIS 1.1 INTRODUCTION An Illegal Accessory Dwelling Unit (hereafter: iADU) is a legally constructed room accessory to a primary residence. However, these spaces are frequently illegally occupied as a separate independent dwelling unit (including a bedroom, full kitchen facilities and bathroom), becoming an illegal second dwelling unit on land zoned for single-family use. A critical distinction made in this study is use vs structure. All iADUs identified in this paper were issued a building permit. Their structure, floor plan, and setbacks are all legal and met local zoning codes at the time of permit issuance. It is only when 1 University of Hawai`i these spaces are occupied by a tenant and used as an independent living unit that these spaces become Illegal Accessory Dwellings. Figure 3: Venn Diagram: Most iADUs are issued permits, but then used/occupied in a way that is not permitted. As these types of living arrangements create needed rentals (J. a. Reade 2000), this issue is particularly relevant to Honolulu, which has one of the highest costs of living and the most unaffordable real estate (relative to income) in the nation (Performance Urban Plannning 2012). Thus this paper begins with the premise that Illegal Accessory Dwellings actually serve a significant public benefit by adding units to the housing supply, thereby having the net effect of improving housing affordability. iADUs highlight an interesting contradiction in housing policy – while they are officially unwanted, they are desperately needed. To that end, the goal of this paper is 1) to quantify all legally sanctioned building permit activity to create Illegal Accessory Dwellings, and 2) perform a rudimentary spatial analysis to see what, if any, patterns emerge. With this information, policymakers will have a better understanding of where this type of urban growth is occurring and perhaps which portions of the second unit policy should be modified. To date, illegal dwellings have not been comprehensively quantified in any major metropolitan area. While studies of illegal units in other cities have used visual surveys (Cchaya 2008) (SPUR 2001) or focused on the hypothetical occupancy of the structure (ie. realtor descriptions that describe potential rental income from a basement studio), the methodology used in this paper systematically investigates all 2