A Potential Solution to Phoenix's Housing Crisis and Affordability Crisis. Could Scottsdale be Next?

An intriguing development in Phoenix housing may show promise as a model for helping to solve the city's burgeoning housing and affordability crisis: Accessory Dwelling Units (ADUs).

In an effort to expand the city’s housing inventory and provide more affordable homes, the Phoenix City Council is set to vote on the legalization of detached ADUs (sometimes called “detached casitas”), complete with their own kitchens. This move has received substantial support from council members, who view ADUs as a simple yet effective solution to the city's pressing housing shortage. Vice Mayor Yassamin Ansari, for instance, noted the immense potential of ADUs in providing independent living spaces for family members, such as elderly parents and adult children.

Yet, the benefits of ADUs go beyond familial convenience. According to Scott Bourque, a representative from the veteran's group Arizona Vets Forward, the addition of more affordable housing through ADUs could have a significant impact on reducing homelessness among veterans and other vulnerable populations. While ADUs are not a panacea, they can provide a much-needed boost in housing supply to meet increasing demand.

On the technical side, ADUs are relatively easy to implement. Unlike duplexes or triplexes, ADUs share the same address as the primary residence and can be built on properties zoned for single-family detached or multifamily living. In terms of their size, these units will be limited to 75% of the primary dwelling's size, and they can be built in the rear yard area of a residential property, just like other detached structures such as garages or sheds.

City Council members have taken lessons from other cities where the implementation of ADUs hasn’t gone as planned. Tucson, for instance, faced a slow start due to complex ordinance requirements. By contrast, Phoenix plans to require ADUs to adhere to residential standards rather than commercial ones, and they will not necessitate additional parking, simplifying the process significantly.

A key concern regarding ADUs is the potential for these units to be used not for long-term housing, but for short-term rentals. However, the Phoenix proposal includes a requirement for owner occupancy, giving the city more control over the use of ADUs for short-term rentals. It's worth noting that while this won't entirely eliminate the possibility of short-term rentals, it is expected to ensure that ADUs contribute meaningfully to the housing supply.

As we look toward the potential impact of this legislation, it is important to remember that solving the housing crisis requires a multi-faceted approach. ADUs may be just one part of the solution, but they could significantly contribute to easing the housing and affordability challenges in Phoenix.  If Phoenix rolls out a successful ADU program, could Scottsdale and other cities across the Valley be next?  My guess is that other cities will follow suit, particularly cities like Scottsdale, Mesa, and other outer-lying areas with a higher percentage of large lots that can accommodate ADUs.

Stay tuned for more updates on this topic and other real estate trends in Scottsdale and Phoenix. For personal advice on navigating the local real estate market, don’t hesitate to reach out. As your trusted real estate advisor, I'm here to guide you through every step of your property journey.