Blog 102 - Belmont negates State's ADU laws with its Sewer Lateral Policy
In case you were in a time warp over the past few years, the state legislators recently gave back some long overdue property rights to homeowners through enabling ADU housing or ‘granny units.’ The goal being to address low-income workforce needs through homeowner developers. This body of legislation spun-up a soon to be multi-billion-dollar industry associated with ADU housing. The thought being a homeowner can better address workforce housing since land purchase and expensive engineering reports, etc. are not required. However, only small, under 500-sqft ADU builds can meet financial scrutiny when the recovery time of costs from affordable rents are considered. All good, right? Homeowners especially those under stress gain a passive income source and a good recovery time on their investments while the local workforce gets housed locally for $840 to $1,800 per month in ‘granny units’ ranging from 150- to 450-sq ft! So, where’s the rub?
Well, some municipalities have failed to adopt the State’s vision or point of building smaller, under 500-sq ft ‘granny units’ to address workforce housing. Worse, archaic ordnances and policies exist that are hyper regressive for these small ADU builds. One example is the Sewer Lateral Policy of Belmont which can add $13,000 to $25,000 to the cost of even the smallest allowed ADU without even upgrading the sewer system’s capacity. As a result, the cost of meeting the City's requirements to create a 'granny unit' is so expensive that it is prohibitive to the average or stressed homeowners; thereby, making the state legislation allowing the development of these units untenable for the average homeowner. Thus, these limitations reduce the likelihood that average homeowners would even consider the possibility of building a 'granny unit;' because they could not get the rent that would recoup the costs of the build in a reasonable time frame. The net result is that the hundreds of hours and millions of tax dollars spent on passing the State’s ADU laws to create low-income housing within Belmont and other communities having similar wrongheaded policies is totally infeasible.
Further, the impact of Belmont’s sewer lateral tax on larger than 600-sq ft is minimal and easily absorbed by the rents collected from these larger units; but they are not affordable to the workforce. Such careless government overreach and underreach, respectively has been going on for decades and is a deterrent to getting homeowners engaged in addressing the workforce housing needs. When a carve-out exception for under 500-sq ft ADU builds that address workforce housing was proposed to the council members, only one member responded stating that the updating of the sewer system was a priority. However, there are no plans to update the sewer main which would address the capacity of an aging system, only the lateral connections at the expense of the homeowners is enforced while leaving the capacity of the sewer system unchanged!
So, the reach-out to the City Council enlightening them of the hyper regressive nature of their sewer lateral policy on even the smallest ADU or ‘granny unit’ and its deterrence to homeowner developers interested in building housing for our workforce was meet with indifference. Next, it was proposed to the council that a carve out for under 500-sq ft ADU units would meet the need while providing an incentive to develop these much-needed small ADUs. Better, cities could take the lead and require time limited rent control for 3-4yrs in exchange for the carve-out for these small ADUs that meet the needs of our local workforce. Cities do such things for professional developers without asking homeowners so where is the creative thinking for our homeowner developers?