Accessory Dwellings

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Garage apartments in Houston

by Howard Maple

Houston’s tradition of ADUs

Fans of Shirley MacLaine might remember this Depression-era ADU from Terms of Endearment, the classic 1983 tearjerker that was filmed in Houston.

picture of decaying garage apartment with couple kissing on porch

Screen capture from Terms of Endearment (1983), courtesy of Netflix

Although this ADU is no longer standing, the surrounding Houston Heights neighborhood is known for its extensive inventory of accessory dwelling units, which are known locally as “garage apartments.”

Here you can see a typical garage apartment peeking out between two houses in the Montrose area:

picture of garage apartment behind Houston house

photo by Howard Maple, used by permission

In both of these thriving neighborhoods near downtown, ADUs became an important part of the residential landscape during the Great Depression, and in the 1950s, when inner-city neighborhoods saw increased demand for affordable rental housing.

The role of garage apartments today

These same garage apartments that helped Houston homeowners make ends meet during hard times are now helping them deal with soaring inner-city land values and property taxes in the booming local economy. ADU rental income (often over $1,000 per month for an updated unit) can easily cover a homeowner’s annual property-tax bill. (This overheated rental market has led to several blocks in Midtown and Montrose being completely redeveloped into mid-rise luxury apartment projects.)

For individual apartment investors who prefer the traditional charm of Houston’s older neighborhoods, having an ADU on a multi-unit property can be the deciding factor when evaluating whether or not a renovation project is feasible.

“I base many of my property-buying decisions on the existence of one or more accessory dwelling units,”

says Houston apartment developer Mike Ayers, owner of Antiquarian Homes.

“I love old homes, but I’ve turned down purchase proposals on some of the nicest ones simply because they had too much land and not enough rentable units to cover expenses.”

New garage apartments in Houston are often built as an unfinished shell along with a new primary residence, giving buyers the option to create an apartment or guest quarters, a home office, or just an added space for hobbies. Houston contractor Mike Shelton, owner of Harvard Heights Construction, reports strong demand for studio- or loft-style ADU interiors that provide more flexibility than traditional living room/bedroom plans.

How to build one

It is relatively easy to build an ADU in Houston (compared with other urban areas) since this city has always lacked traditional zoning laws. In most older neighborhoods with no deed restrictions, city-wide codes can only dictate basic parameters such as setbacks, insulation standards, and parking requirements. No city-wide ordinance can prohibit specific uses for a building unless health and safety laws are being violated. (Two-story structures must comply with rather stringent utility easement setback rules intended to protect construction crews working near power lines.)

In short, ADUs are allowed “by right” without a conditional use process. There is one important exception: some of the more prosperous inner-city neighborhoods still have deed restrictions that prevent ADUs from being rented.

Here are the documents required to obtain a Houston ADU Building Permit:

  • A signed and notarized Deed Restriction Affidavit (property owners must verify that their title commitment and/or subdivision deed restriction documents do not contain ADU restrictions)
  • Residential Energy Conservation Form (verifies compliance with building insulation requirements)
  • Wastewater Capacity Reservation Letter (verifies compliance with sewer line capacity requirements)
  • Calculation of Impervious Cover Form (verifies compliance with storm water runoff restrictions and determines the owner’s monthly drainage fee that appears on city water bills)
  • Property Survey (to map out utility lines, including overhead power line locations and elevations that may dictate additional setbacks)
  • Construction drawings (structural details, setback lines, utility connection points, drainage provisions, driveway/parking layout, etc.)
  • If the property is in a 100-year floodplain, there are additional site-preparation and insurance requirements.

There are some design challenges and opportunities.

Parking:  The off-street parking ordinance for ADUs can be a design challenge on Houston’s narrow 50’x100′ inner-city lots. Contractor Mike Shelton notes two options for the required third parking space: a 17-foot-wide parallel-parking area, or even a space at the front of the property. Here you can see an approved parking layout for three cars at one of Shelton’s recent garage apartment projects:

photo of driveway to ADU

photo by Mike Shelton – used by permission

Because Houston has a great need for neighborhoods that are denser and less car-dependent, I believe it would make sense to eliminate the ADU parking requirement in the six “Urban Corridors” along the slowly developing light rail system. This development incentive could result in many smaller ADUs being built in neighborhoods within walking distance of a light rail station. (With the growing national interest in simplified lifestyles, housing options for seniors who no longer drive, and even “tiny house” living, demand surely exists for ADUs in walkable, transit-oriented neighborhoods.)

Style:  There may or may not be restrictions. Houston neighborhoods that are at least 50 years old and have not experienced significant new development can apply for Historic District status, whereby a petition signed by two-thirds of the property owners usually results in the mandated preservation of every original façade within that district. Garages that were added later, usually in conflicting architectural styles, are considered “non-contributing” structures exempt from preservation restrictions.

The potential

Houston’s unique set of rules raises an interesting possibility — could this Texas city, whose metropolitan area is top-ranked for sprawl among metro areas of its size (table 6 in this report) — become a hotbed of housing invention?

“All the discussion on the table is really good and pointed in the right direction,”

says David Crossley, president of Houston Tomorrow, in a Houston Chronicle  article.

“The City of Houston has decided that now’s the time to become a place with walkable neighborhoods and better transit.”

Crossley’s comments reflect the ambitious spirit of reinvention that is always at work in Houston. Indeed, all of the ingredients seem to be in place for a boom in ADU development here:

  • A steady influx of young professionals seeking creative urban rental options in walkable, mixed-use neighborhoods.
  • A city planning effort that intends to leverage the light-rail system to revitalize the inner city through “smart growth” investment that increases density.
  • Many diverse and welcoming inner-city neighborhoods, where homeowners are unlikely to protest a neighbor’s back-yard construction project.
  • Local availability of ADU construction financing (such as this 90% CLTV loan)

As Houston prepares for unprecedented population growth in the coming decades, I predict that the versatile ADU concept will continue to help make our inner-city neighborhoods more affordable and sustainable.

—October 2014

About howard713

Howard Maple is a classical musician, editor, and home-design enthusiast who renovated and enlarged a 1928 bungalow in the 1990s.

4 comments on “Garage apartments in Houston

    November 19, 2014

    Thanks Howard!

    The city is changing some rules on Jan 1. We are asking anyone interested to get their project number in december so they will be “grandfathered” for the new year. The project numbers last for 6 months. The city goes by project number, not dates. One rule that is going to be a problem for a lot of clients is they are changing the impervious area from 75% to 65%. If you are over you will have to have detention for storm water (ie rain barrells). This happened about 5-6 years ago, and I was on channel 2 news about it. After so much outcry, the city did away with it, but is is going to stick this time.

    Thanks mike

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  3. Clint Wadsworth
    March 25, 2019

    I just skimmed some of your information but I don’t see in big bold letters anything about appraisal. That and that alone in my area is the stop button. Without appraisals I can’t get these properties built. are appraisers will only use the sales approach and this is not available as there are no comparable sales. I appreciate you writing an appraisal guide on this topic but I don’t see any official adoption of this technique in order to be able to finance through government agencies, even local banks. Is there any movement on being able to use the income approach?

    I see that homeready loans allows adus to be used in an appraisal but only if it is appraised with a sales approach. Is there a way to get around this?

    • Martin John Brown
      March 25, 2019

      Clint, appraisals are a significant issue. We’ve written about them in many places, for example in our appraisal guide and our research summaries. But as far as getting institutions to follow those suggestions… results are mixed. Definitely in Portland some lenders are becoming aware of the value of ADUs, and at least one claims to let borrowers use the income approach. I think that’s come from the fact that we have a critical mass here of properties, so ADUs aren’t weird. What would be much better would be if the GSEs who buy most mortgage loans would acknowledge the value of the income approach and allow them in their appraisal standards, which, as I’ve written, can be bizarre . I’ve talked with people from GSEs but (as this is an all-volunteer site) I haven’t kept up with their policies in the last few years. Let us know if you see evidence of movement. -Martin

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