How Private Housing Additions Are Creating a Back-Alley Market

To combat an affordable housing crisis across the country, homeowners are building separate, unpermitted units on their properties to rent out or to use as additional living space. Millions of privately built home units are part of an informal housing market unfolding mostly in major cities where the cost of living is high and single-family zoning is limited, The New York Times reports.

Private additions offer a feasible solution to an inadequate housing supply in densely populated areas, but despite their growing prevalence, backyard housing falls into a legal gray area. Cities like Los Angeles and Long Beach are slowly getting on board, however, by creating new ordinances that may eventually legalize unpermitted units in apartment buildings.

Looking to add units, the state legislature has spent the past five years passing a flurry of new laws designed to increase density and speed the pace of new construction. They’ve vastly lowered regulatory barriers that prevented backyard homes and essentially ended single-family zoning with legislation that allows duplexes in most neighborhoods across the state. A byproduct of these laws is that there is now a path for existing units to get legalized, a process that can require heavy renovations and tens of thousands of dollars. Cities including Los Angeles and Long Beach have also created new ordinances that clear the way to legalize unpermitted units in apartment buildings.

The point of informal housing is that it’s hard to see — it is built to elude zoning authorities or anyone else who might notice from the street.

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