Liccardo wants to make ADUs easier for people to build

Accessory Dwelling Units — smaller, secondary housing units built onto existing homes and properties — have become a popular suggestion among those trying to mitigate the nation’s housing crisis, but many homeowners trying to build one struggle to receive the financing.

U.S. Rep. Sam Liccardo, D-San Jose, is trying to help solve that problem with recently-introduced new legislation, the SUPPLY Act, which would help homeowners obtain government-backed second mortgages to finance ADU construction.

In competitive rental markets across the country, including in San Mateo County, ADUs can quickly become secure housing stock that owners can rent out at a profit, Liccardo said at a press conference July 18.

The new legislation would allow up to half that anticipated rental income to be considered when making loan qualification calculations.

“To access the millions of homeowners who want to be able to offer this opportunity to others, to be able to rent at an affordable rate,” Liccardo said. “Empowering homeowners to become home providers … that’s the point of this bill.”

The press conference introducing the legislation — which is co-sponsored by U.S. Rep. Andrew Garbarino, R-New York — was hosted at the Samara ADU showroom.

Samara, a full-service ADU design, construction and installation company, sees firsthand how the housing units can benefit wide swaths of individuals, from those looking to rent out the properties and family members wanting to help house anyone from older parents to young adults, CEO Mike McNamara said.

“Think about being homeowners being able to use it in so many different ways to live life better,” he said. “It could be multigenerational living. It could be that you want grandma back there for a few years instead of going into a nursing home. Maybe your mother and father-in-law move into the small home in the back and give you the home in the front.”

ADUs represent flexibility and options for families trying to meet the cost-of-living and housing crisis in California, Rafael Perez — board president of the Casita Coalition, an ADU advocacy group — said.

“Government-backed second mortgage products like the one being proposed would open the door for families who want to build an ADU but can’t access practical lending solutions today,” Perez said. “This is about unlocking opportunity.”

In California, where 1 in 5 housing permits issued is for an ADU, the housing option is clearly attractive to many families. Clearing financing hurdles can make that option an actionable reality, McNamara said — and whether a homeowner chooses to rent out the property or use it to expand housing for their families, it will appreciate in value.

“This is really a trend. It really does add value. It does really create housing capacity,” he said.

Temo Corona, a Modesto homeowner, shared his personal story of unsuccessfully trying to get financing for a backyard ADU. He’s stuck for now, he said, but this legislation could provide support.

“We are looking for some sort of help, some sort of relief, because at the end of the day, I’m a builder, I install ADUs, and you would assume it’s easy,” he said. “It should be. I could build it myself, technically, but it still requires funding. I don’t know where to get it, so all I could do is save up more.”