The Construction Lending Podcast by Land Gorilla

Transforming Housing Policies

Guest:

Casita Coalition on The Construction Lending Podcast by Land Gorilla
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Episode 30 | The Construction Lending Podcast

We welcome Denise Pinkston and Katherine Peoples of Casita Coalition in this episode. Denise and Katherine are champions of equitable lending and housing solutions, bringing decades of expertise in real estate, policy, and lending practices. We’ll explore their efforts to ease housing regulations, streamline ADU development, and advocate for equitable lending solutions. Discover how their organizations are working to create more inclusive and accessible neighborhoods.

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Questions Answered

  • How might revisiting these historical housing practices benefit modern housing affordability and density?
  • What regulatory barriers have been most challenging to overcome?
  • What are the main benefits of ADUs for homeowners and the community at large?
  • How can cities and states replicate the success of streamlining the ADU permitting process?
  • What steps would need to be taken to achieve the vision of simplifying the home-buying process?

Episode Recap

Breaking Barriers: Equitable Lending and ADUs for Affordable Housing

The episode addresses the barriers to housing and the efforts organizations are making to improve housing accessibility, particularly in underserved communities.

The ADU Landscape

Accessory Dwelling Units (ADUs) have emerged as a crucial solution to the chronic housing shortage. These secondary residential units on single-family lots offer flexibility and space optimization, which can help homeowners manage expenses, house family members, or generate rental income. With the U.S. being short millions of housing units, the role of ADUs becomes all the more essential.

California’s forward-thinking policies have positioned the state as a frontrunner in ADU legislation. The state’s laws enable homeowners to add ADUs on both single-family and multifamily properties, providing a model for other states grappling with similar housing issues. As Katherine Peoples points out, in other states like Hawaii, Colorado, Oregon, Washington, New York, and Arizona are eyeing California’s legislation as a template.

The Evolution of Zoning: Barriers and Opportunities

Historical context is crucial to understanding today’s housing challenges. As Denise Pinkston describes, zoning laws originated in the 1920s-1930s to separate residential areas from industrial uses. Over time, these laws evolved to favor single-family homes, excluding multifamily units, leading to restrictive zoning that hindered housing diversity and density.

Denise highlights that prior to the restrictive zoning laws of the mid-20th century, properties often included multiple units, facilitating diverse household arrangements. However, zoning and deed restrictions were employed as tools to exclude non-white individuals and limit density, a practice that has led to the housing crisis we see today.

Catalyzing Change

Denise’s vision for inclusive and equitable neighborhoods led to the founding of the Casita Coalition. This alliance of professionals from various fields aims to increase neighborhood-scale housing by promoting and facilitating ADU development through policy changes and advocacy work.

Casita Coalition has been instrumental in influencing state regulations, including the exemption of small homes from costly rooftop solar requirements. Their efforts extend to advocating for better financing solutions, as Pinkston emphasizes the need for inclusive state and federal lending criteria that consider projected ADU rental income.

Overcoming Financial Barriers to ADU Construction

Katherine Peoples outlines the major financial hurdles faced by homeowners looking to build ADUs, especially when dealing with existing low-interest first mortgages. Financial institutions often require refinancing, forcing homeowners to sacrifice advantageous mortgage terms. Katherine’s organization, HPP Cares, tackles these issues by offering guidance on financing, zoning, and permitting.

Freddie Mac and Fannie Mae’s recent policy changes, allowing anticipated rental income from ADUs to qualify for loans, signify a progressive shift. However, high interest rates remain a challenge. Both Denise and Katherine stress the importance of ongoing financial reforms to make ADU development more accessible to moderate-income households.

The Broader Impact of ADUs

California’s success with ADUs serves as an inspiring example. The policy changes and the Casita Coalition’s advocacy have demonstrated that easing barriers and offering financial incentives can significantly increase housing density and affordability.

Education remains pivotal. As Katherine emphasizes, HPP Cares extends educational resources and support to homeowners, enabling them to better navigate the complexities of ADU development. This educational push is crucial for the broader acceptance and implementation of ADUs nationwide.

Streamlining the Building Process: A Vision for the Future

Denise passionately describes the need to simplify home-building rules, drawing comparisons to the early 20th century’s Sears Roebuck kit houses. She envisions a streamlined “Amazon shopping” experience for home construction, where ordering pre-approved plans becomes as straightforward as buying a car.

San Jose’s streamlined ADU processes, which include pre-approved plans, offer a compelling model. By adopting similar strategies statewide, homeowners can obtain building permits more efficiently, thereby accelerating ADU development.

The National Movement and Community Feedback

With a strong advocacy base, Casita Coalition is pushing for standardized rules and lending practices across the United States. This ensures consistency and removes barriers, paving the way for wider adoption of ADUs as a viable housing solution.

Both Denise and Katherine call for broader engagement and public feedback to enhance policy impact. Building powerful coalitions and encouraging active participation from communities are critical steps in reshaping the housing landscape.

Conclusion: Reflecting on the Past, Building for the Future

By revisiting historical housing practices and advocating for inclusive, progressive policies, California sets a powerful example. The collaborative efforts of the Casita Coalition and HPP Cares are instrumental in driving this change, proving that the right tools and community support can catalyze a significant shift toward housing equity and accessibility.

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