This seaside community has found a way to encourage the
development of affordable small-scale,
Santa Cruz has a unique “accessory dwelling
unit” (ADU) development program that has won
several planning and smart growth awards since being
adopted by city leaders in 2002.
Often known as a “granny unit” or an
“in-law unit,” an ADU is an additional
living unit that has separate kitchen, sleeping, and
bathroom facilities. It can be attached or detached from
the primary residential unit on a single-family lot. In
many cases, the dwelling is a converted garage or a small
The construction of ADUs is a way to increase affordable
housing in an expensive market and encourage in-fill
development. First, it is increasing the housing stock.
Second, it can help homeowners supplement mortgage payments
to make their own housing more affordable in one of the
most expensive housing markets in California. The median
home price in Santa Cruz County tops $700,000.
Longtime residents were leaving because they could no
longer afford to retire in the city and young people
couldn’t afford to live where they grew up,
according to Carol Berg, Santa Cruz’s housing and
community development manager. “The crisis was
hitting home for people,” she said.
The ADU program is allowing increased density without
changing the character of existing neighborhoods, Berg
Started with a $350,000 grant from the California
Pollution Control Financing Authority, the program allows
homeowners to build these units on their property and
combats illegal and poorly constructed granny units.
Santa Cruz’s program regulates the development
of ADUs. The city has created a technical assistance
program to assist homeowners in designing an ADU. There is
also a loan program through a local credit union.
City officials held community workshops to inform the
community about the program, prepared technical assistance
materials for homeowners and even provided some prototype
designs to give homeowners a jump start on creating an
In Santa Cruz, these units are allowed on residentially
zoned lots that are 5,000 square feet or more, and they
must meet setback, height, and other requirements.
Before the program, about 10 accessory units were being
permitted a year. Since the adoption of the program, the
city is averaging about 40 units a year, according to