Illegal Units Likely to Emerge from Secrecy


As a teenager, Sean Diggins knew his single mother struggled to make ends meet and provide for two kids in their 800 square foot family home on Diamond Street. That stress was amplified when Diggins’ ailing grandmother came to live with them. Hospice caregivers attended to her needs in what had originally been a carriage house, outfitted with a bathroom and tiny kitchen.

A true granny flat, Diggins remembers his mother “was always paranoid about” the illegal conversion, which she later used as an art studio.

Diggins was one of 11 people urging the city’s Planning Commission last week to move ahead and adopt new state regulations, intended to ease a shortage of 3 million homes statewide by waiving parking requirements and other fees for property owners that build second units on their property or within their homes.

With the new state law, effective Jan. 1, mandating cities revise their regulations to ease development barriers for so-called accessory dwelling units, Diggins is eager to legitimize the second living space on the property he now owns. “The minute they pass it,” said Diggins, he intends to seek a permit.

“It’s perplexing why they are dragging their feet,” said Diggins, a wine distributor who lives in Oakland, but rents his Laguna home in a neighborhood dotted with similarly occupied back houses. “It’s already enmeshed in the town for decades; it’s the fabric of Laguna,” he said.

After two hours of discussion, the Planning Commission put off acting on the proposal until Nov. 15, asking staff to prepare more accurate visual examples of how second units would look on lots of varying sizes. They also wrestled without resolution over whether to also impose deed restrictions on second units to address their affordability, particularly on smaller lots.

A survey of current market rents shows the average studio or one bedroom of 675 square feet in Laguna Beach ranges from $2,292 to $2,500 monthly, says the staff report. That figure exceeds by nearly 50 percent what a median low-income wage earner in Orange County can typically afford to pay for monthly rent.

In the past two decades, just 36 permitted second units have been built in Laguna Beach under the city’s existing ordinance, which restricts them to lots of a minimum of 6,000 square feet and limits their size to 7 percent of the lot area or a maximum of 420 square feet. The current ordinance also requires a new parking space. About 3,616 lots in town fall into this category, the staff report says.

Now, development within a single year may eclipse that figure, propelled by the new legislation and soaring rental rates. Today, 17 ADUs are under construction, eight others have been approved and nine more are pending, Greg Pfost, the city’s Community Development director, told commissioners.

Commission members seemed inclined towards loosening the regulations further to allow the development of second units on lots of 5,000 and even 4,000 square feet. About 1,000 lots in town would be eligible, notes the staff report.

Pfost recommended requiring covenants on affordability on units built on smaller lots. Owners would report to the city annually about their renter’s income status, he said.

As the aim is to promote more housing, Commission member Ken Sadler said he would consider permitting ADUs that cover up to 10 percent of lots of 4,000 square feet, up from the current 7 percent cap.

Despite the statewide housing crises, Laguna is only mandated to provide one affordable unit in the next eight years, Pfost said. “None of the ADUs are required to be affordable,” he said, pointing out that the existing ordinance already forgives parking if it is deed restricted as affordable housing.

Kimberly Norton, acting chair of the city’s Housing and Human Services Committee, urged adoption of the ordinance to ensure more affordable housing for artists, employees, police and seniors as well as ensuring community diversity.

Resident John Thomas questioned whether ADUs will truly yield lower cost housing. “I don’t see that it will,” he predicted.

Of the already converted illegal units, Chris Quilter, president of Laguna Beach Seniors, suggested city staff “find a way to reach out to folks to have their units certified as safe.”

In addition to changing rules over ADUs, the state legislature also passed a bill allowing for so-called junior ADUs, the conversion of rooms within existing homes into dwelling units with the addition of kitchens, baths and separate entries.

Like ADUs, they, too, would be exempt from creating additional parking if located within a half-mile from public transit.

Fire Marshall James Brown said he had no qualms about the proposed ordinance, even on so-called impaired streets. “We don’t anticipate a large change in the number of vehicles on the street,” he said.

One of the staff recommendations included a 0 percent home modification loan program for low- to moderate-income seniors seeking to create an ADU. The proposal is in its infancy and may tap in-lieu housing fees, planner Monique Alaniz-Flejter explained.


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