LA home owners embrace new type of Renting to Help pay costs and generate cash flow

Thanks to the recent changes in LA housing laws to more easily allow "granny flats", or small independent apartment units on property where home already exists. Construction of these by normal homeowners have exploded by 2375% compared to the prior year. 

According to researchers at Berkley, "Beyond their “natural affordability”, there are also opportunities to target ADUs for particular under-housed populations and help lower income homeowners build wealth. In Los Angeles, the organization LA Más is establishing an ADU Section 8 program that incentivizes homeowners tobuild ADUs specifically to house Section 8 voucher holders. The same organization also received grant funding to provide the knowledge and resources to low and moderate income homeowners to adopt ADUs as a tool to build equity and cash flow. Los Angeles County is also piloting a program that will incentivize the construction of ADUs through subsidies to homeowners willing to rent their unit to homeless individuals or Section 8 voucher recipients."

For new buyers trying to make a mortgage or generate cash flow, the LA pilot program for ADU "granny flats" could be a solution. From their website, 

 "The County will provide a maximum subsidy of $75,000 per unit to build 2-3 new ADUs. The County will provide a maximum subsidy of $50,000 per unit to preserve 2-3 existing unpermitted ADUs. The subsidy will be provided in the form of a soft loan or forgivable loan tied to a commitment to rent the ADU to a homeless family/individual or participant in the housing choice voucher program."

UC Berkley study.