ANN ARBOR, MI — Ann Arbor homeowners now have more options to add accessory apartments on their properties, such as carriage houses and apartments above garages.

City Council voted 8-3 Monday night, June 7, to approve new regulations for accessory dwelling units, known as ADUs, as a way of increasing housing supply in the city.

The changes remove barriers and relax restrictions, giving about 15,600 residential properties more flexibility to add ADUs while making another 6,750 newly eligible.

“It will expand housing choice within the city and I expect it to be an incremental net positive,” Mayor Christopher Taylor said.

A couple built an apartment above their garage. Ann Arbor officials want more like it.

Council members heard a mix of opinions from residents during a public hearing before the vote.

Critics are worried it could lead to more investors buying single-family homes and essentially converting them to duplexes, and some are concerned about ADUs in backyards being too close to neighboring property lines and the increased density changing the character of neighborhoods.

Supporters said allowing more ADUs can help chip away at a housing shortage and they welcome more neighbors.

The three council members against the changes were Kathy Griswold, Jeff Hayner and Ali Ramlawi. Council Member Elizabeth Nelson, D-4th Ward, joined them in opposing elimination of the requirement that a property owner must live in either the home or the ADU, but in a 7-4 vote that repeated a vote from April, they were outnumbered again.

Ramlawi, D-5th Ward, pushed for keeping the owner-occupancy requirement, expressing concerns about opening the door to more investors buying houses on the lower end of the market and taking homeownership opportunities away from people.

Homeownership is how intergenerational wealth is created and there’s a systematic problem of inequity that has been exacerbated by commercial investments in residential real estate in the last decade, Ramlawi said.

“We’re dumping fuel on the fire when it comes to the gentrification of our community,” he said.

For those who argue ADUs could be part of the city’s affordable housing solution, Ramlawi also expressed doubts any accessory apartments would be affordable due to the cost to build them and the property taxes on them.

In addition to removing the owner-occupancy requirement, the approved changes allow ADUs in more zones — all residential zones except mobile home parks — and remove a 5,000-square-foot minimum lot size requirement.

The changes allow homeowners to build new detached ADUs on their properties, eliminating the requirement that structures had to exist prior to Dec. 31, 2016. The changes also eliminate parking requirements, deed restrictions and a requirement that new entrances must be on the side or rear of a structure.

For residential properties up to 7,200 square feet, an ADU of up to 600 square feet can be built now. For bigger properties, the maximum ADU size is 800 square feet.

ADUs must be set back at least three feet from rear or side property lines.

Since the city established rules in 2016 allowing homeowners to create and rent out ADUs on their properties, only about 24 homeowners have applied for ADU permits and fewer have been built, said Council Member Lisa Disch, D-1st Ward, one of the council members in favor of removing regulatory barriers, including the owner-occupancy requirement.

Developers already are buying up lower-priced homes and making cash offers, Disch said, arguing that’s happening regardless of whether the city liberalizes its ADU laws.

It’s hard to predict the future, but the city has seen few ADUs built to date, Disch said, adding they’re expensive to build, difficult to finance and a poor return on investment.

A rational investor is more likely to buy a second modest home than add an ADU to a home, she said.

MORE FROM THE ANN ARBOR NEWS:

Ann Arbor OKs $1.5M for new Avalon Housing apartment developments

Proposed law giving Ann Arbor renters more protections back on council agenda

Ann Arbor council voting on new rules for dense development outside of downtown

$15M plan unveiled for 102 new apartments in southeast Ann Arbor

How they voted: Ann Arbor City Council vote breakdown for May 2021

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