03/07/2013 10:02 am ET

Affordable Housing: What Ann Arbor Can Learn From Santa Cruz, California

This article comes to us courtesy of Concentrate.

In the early 2000s, the city of Santa Cruz, California had a problem. The naturally beautiful, progressive city, home of a premier research university, had become such a desirable place to live that housing prices skyrocketed beyond the reach of many who worked, attended school and were otherwise inclined to live there.

"There was a lack of affordable housing," says Housing and Community Development Manager for the City of Santa Cruz, Carol Berg. "The housing was so expensive, somebody needed two jobs to afford to rent a house."

Sound familiar?

While Ann Arbor is actually twice the size of Santa Cruz, both in population and land area, these circumstances, as well as very similar population density, make the two communities ripe for comparison. According to a housing options study of Santa Cruz, the average home price was $480,000 in 2002. As a result, young professionals and even longtime residents were forced to move away.

"Employers have a difficult time recruiting for positions that pay $50,000, $60,000, or even $80,000," the study says. "[The University of California Santa Cruz] is concerned about a potential 'brain drain' resulting from difficulties in recruiting new faculty."

The crisis was deemed serious enough for the city to take action. Rather than contend with the political, logistical, and economic challenges of building housing developments, a city-commissioned committee found a solution that was actually already legal in their housing code, but was being underutilized: accessory dwelling units, or ADUs.

Sometimes referred to as in-law houses or granny units, ADUs are small, apartment-sized houses built behind existing, owner-occupied homes. They are often converted garages or sheds, and become rental income for the property owners and a more affordable rental option for residents.

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