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Illustration: Eniola Odetunde/Axios

As the pandemic causes many to rethink their housing choices, accessory dwelling units (ADUs) — or granny flats — are seen as viable options for multigenerational housing or singles who want to get out of apartment buildings.

Driving the news: Cottage, a San Francisco-based startup that sells ADUs to homeowners in the Bay Area, has raised $3.5 million in seed funding led by Susa Ventures and Base10.

The big picture: In U.S. cities, about 75% of the land is zoned for single-family housing only, and proposals for multifamily housing often run up against NIMBY-ist opposition.

  • But: A set of new ADU rules went into effect in California in January, making it even easier for homeowners in the state to add these extra units to their properties.
  • Most significantly, homeowners can now add a second ADU to their property, and municipalities are barred from limiting ADUs to less than 800 square feet and 16 feet tall. There are lower parking and setback requirements, faster permitting approval, fewer fees, and the ability to add ADUs to certain multifamily dwellings.
  • Cottage, founded a year ago by Alex Czarnecki, is the latest startup to join the ADU boom. In October, startup Abodu also announced $3.5 million in seed funding.

How it works: Cottage’s pitch to customers is that it offers custom units, takes care of managing much of the process like getting permits, and does it at a lower price than many alternatives, including some prefab options.

  • Cottage says that because it can cut big deals with designers and contractors, it can get lower costs for its customers, to whom it charges a fee for managing the process.
  • After checking out a property and discussing what the client wants, Cottage budgets about one to one-and-half months for the design, about two to three for permitting, and another three to four for construction, says Czarnecki.
  • The units run about $100,000 for an entry-level garage conversion, and $150,000 for a one-bedroom detached backyard unit, though it varies based on customizations.
  • It's currently open to customers in six Bay Area counties, but it plans to soon expand to more regions on the West Coast.

What they're saying: "I'm an only child and I'm trying to be with my parents in their elderly years," Harold, a Cottage customer and Redwood City resident, tells Axios.

  • He and his wife considered options like renting an apartment for his parents or buying them a house, but ultimately, an ADU would provide them a sense of privacy, their own house, and proximity to the family, he adds.

Yes, but: While ADUs can be a solution for some housing needs, they won’t solve them all.

  • "ADUs are like the scooters of housing policy — they're flashy and cute and everyone loves them,” Jenny Schuetz, a fellow with Brookings' Metropolitan Policy Program, told Axios’ Kim Hart earlier this year.
  • “Scooters are good at getting people thinking about other ways to get around, but inherently they don't scale. Even if we put an ADU on every single-family lot in the U.S. — which of course won't happen — we wouldn't solve the problem,” she added.

Go deeper

Former HUD secretary Julián Castro says homeownership can help close wealth gaps in America

Axios' Aja Whitaker-Moore (L) and former Sec. Julián Castro (R). Photo courtesy of Axios Events

Homeownership disparity is one of the root causes of wealth gaps between white people and people of color in America, former Secretary of Housing and Urban Development Julián Castro said at an Axios Event aired Tuesday.

Why it matters: The homeownership gap between Black and white Americans is worse today than when race-based housing laws and policies were in effect decades ago. The Census Bureau reports that 42% of Black Americans and 61% of Hispanic Americans own a home — but for whites, it's 72%.

Updated 5 mins ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Health: How data and the pandemic have democratized the "high-performance lifestyle — "Twindemic" averted as flu reports plummet amid coronavirus crisis
  2. Vaccine: Pfizer begins study on 3rd vaccine dose as booster shot against new strains — Republicans are least likely to want the coronavirus vaccine
  3. U.S. news: California surpasses 50,000 deaths COVID-19 deaths, more than any other state — Jimmy and Rosalynn Carter return to church after receiving COVID-19 vaccines
  4. Local: Public transit ridership in Twin Cities dropped 53% amid pandemic — Data firm predicts "complete chaos" in next phases of Florida's vaccine rolloutAlaska Gov. Mike Dunleavy tests positive for the coronavirus

Acting Capitol Police chief: Phone logs show Jan. 6 National Guard approval was delayed

Pittman at a congressional tribute for fallen officer Brian Sicknick. Photo: Erin Schaff-Pool/Getty Images

Acting U.S. Capitol Police chief Yogananda Pittman testified on Thursday that cellphone records show former USCP chief Steven Sund requested National Guard support from the House sergeant-at-arms as early as 12:58pm on Jan. 6, but he did not receive approval until over an hour later.

Why it matters: Sund and former House sergeant-at-arms Paul Irving clashed at a Senate hearing on Tuesday over a dispute in the timeline for when Capitol Police requested the National Guard during the Capitol insurrection.