The Ralph and Goldy Lewis Center for Regional Policy Studies

In response to a worsening homelessness crisis, Los Angeles City and County have recently looked to accessory dwelling units (ADUs) — small second homes on the same lot as a single-family home — as a part of the solution. Pilot programs in both jurisdictions offer homeowners subsidies for ADU construction in exchange for housing a person experiencing homelessness for between three and 10 years. In this paper, I evaluate the scalability, longevity, efficacy, political feasibility, and cost-effectiveness of these programs compared to traditional multifamily supportive housing. In doing so, I employ the metric of cost per year of affordability, to compare cost- effectiveness for programs of varying duration. I find that while ADU programs may be more politically feasible and have moderate potential to be scaled up, they will encounter significant difficulties in reaching that potential. They lack the longevity of traditional supportive housing, will either prove less cost-effective or will depend on homeowner contributions that may not materialize, and will have mixed effects on quality of life for formerly unhoused residents, among other hurdles. With private lenders still wary of the ADU market, greater scale and cost-effectiveness may be achieved by fostering private ADU investment, offering fee waivers to homeowners who agree to house a person experiencing homelessness, and supporting unhoused residents more directly with housing vouchers.