Episode 53: Informal Housing and Remaking Single-Family Neighborhoods with Vinit Mukhija (pt. 1)

Shane Phillips 0:04
Hello, this is the UCLA Housing Voice podcast, and I'm your host, Shane Phillips. This week we're joined by Vinit Mukhija of our very own UCLA Department of Urban Planning, and we're talking about his new book in a two part interview. This first episode is about informal housing and the way it's helping reshape single family, housing, neighborhoods, and how incremental development is increasingly being formalized in many of these places. Informal housing is housing that doesn't have a fully legal or fully permitted status. And it can run the gamut from fully appointed but at least partially unpermitted backyard units to barely converted garages or even storage sheds being used as housing. A key argument of Vinit's book is that while informal housing is most often associated with the global South, it's very common in the global North as well even in relatively affluent cities like Los Angeles. The informal nature of this housing has a bunch of implications. One is it reflects land use policies that aren't producing enough housing or the right kind of housing to meet people's needs. Another is it can put landlords and especially tenants in precarious positions, though in very different ways. We explore in this conversation, how wealthier and more privileged people often profit most from informality, even though poor households are the ones who rely most upon it, and how efforts to legalize and formalize incremental development in single-family housing, neighborhoods may hold some promise for changing that. And there's a lot more in here too. In part two, we'll get into the weeds on accessory dwelling units, second units, backyard cottages, whatever you'd like to call them, and have a bit of a debate about the role of state intervention in making all of this happen. The Housing Voice Podcast is a production of the UCLA Louis Center for Regional Policy Studies with production support from Claudia Bustamante, Jason Sutedja, Divine Mutoni, and Phoebe Bruce. You can email me at Shanephillips@ucla.edu with any questions or comments and be sure to give our show a five-star rating or review if you like it. And with all that said, let's get to our conversation with Vinit Mukhija.

Vinit Mukhija is Professor of Urban Planning, and former Chair of the Urban Planning Department here at UCLA, and he's joining us to talk about his new book, Remaking the American Dream: The Informal and Formal Transformation of Single-Family Housing Cities. Vinit, welcome to the Housing Voice podcast.

Vinit Mukhija 2:35
Thank you, Shane. I'm delighted to be here and look forward to our conversation.

Shane Phillips 2:40
And my co-host today, featured very prominently in the citations of Vinit's book is Paavo, hi Paavo.

Paavo Monkkonen 2:47
Hey, Shane, good to see you. Hi Vinit. For the listeners at home, first time in real life in person podcast recording here so this is very exciting for many reasons.

Shane Phillips 2:58
Yeah, we'll see how this goes.

Paavo Monkkonen 3:02
Maybe the sound will be worse

Vinit Mukhija 3:03
In Paavo's office.

Paavo Monkkonen 3:05
Yeah, there we go.

Shane Phillips 3:06
So Vinit, we always start off with a tour of our guests hometown or another city that they know well and want to share with us in our audience. You've got me and Vinit on your tour, where are you taking us?

Vinit Mukhija 3:18
Thank you, that is a great question, and I might cheat a little bit and take you to hometowns and a little bit the book as well. So my main focus is the city of LA, and that's where I have sort of engaged in this research and it is my hometown for the last 20 years. It has taken me some time to realize and think of LA as what I call a single-family housing city. It's an idea that we traditionally associate with suburbs, but most American cities, I increasingly think of them as single-family, housing cities. And we look at LA in this book and go to a few other single family housing cities, including Santa Cruz, Seattle, Portland, Minneapolis, and Vancouver. And the other idea that I do want to share and is important in the book is I look at LA in a way through the lens of the Global South, particularly ideas of informal housing that we normally associate with the global south. And informal, the way I think of them, are unregulated economic activities, but they're important avenues for accessing affordable housing; they overlap, connect, link with formal or regulated housing. And that's one of the ideas I tried to explore in this book, and I'd like to maybe tour through our conversation today of looking at a global North City of LA, and others through that lens.

Shane Phillips 5:05
Yeah, I think throughout this conversation, we're going to get a really interesting tour of many parts of Los Angeles that we don't often see and that are kind of hidden from view.

Paavo Monkkonen 5:14
So Vinit, if we had to go hang out in one neighborhood of LA, that's the quintessential single family city neighborhood of LA, where would you take us?

Vinit Mukhija 5:22
You know, I and Paavo will live in Echo Park so Echo Park might be. But the ideas for this book started when I lived in South LA, in Vermont Square. We lived on a single family lot, we had an underused garage, and I was thinking about converting that garage to a unit where our parents, Patricia and my parents, sort of come and stay, and we have an additional unit. That's the one that I associate the most with this book.

Paavo Monkkonen 5:56
And I guess maybe even before we get into it, I don't think we have a question prepared about the title of the book. But I think the the term Single Family Housing city is really interesting, because something that people will often point out, especially about LA is that "no, no, there's a lot of renters, there's a lot of multifamily housing in LA". But you call it a single family housing city so maybe you could tell us what that term means.

Vinit Mukhija 6:15
And you're right, we are a city where we have majority of renters, where we probably have...

Shane Phillips 6:23
probably 50 ish right.

Vinit Mukhija 6:25
So we've got equal or even more units in multifamily housing,

Paavo Monkkonen 6:29
Even if 75% of the land

Vinit Mukhija 6:31
That's exactly it! Our residential land, three fourths of it, is zoned for single family.

Shane Phillips 6:37
Right

Vinit Mukhija 6:38
And it's in those single family housing neighborhoods where no other uses are appreciated, no other kind of housing is allowed. That's where the political voice of the city resides, right? It dominates in decision making, and it dominates in our imagination of what a city should be right.

Shane Phillips 6:57
Right make sense. So as I said, Vinita's book is titled Remaking the American dream, and in it he explores the ways that single family detached house neighborhoods have been transforming over time. In previous decades, that mostly took the form of unpermitted and informal housing, and more recently, it's been through more formal channels, like legalizing accessory dwelling units, and ending apartment bands, at least in some places. Early in the book, you make the argument that even though we often associate informal housing with poorer countries and the global South, it's also more common in richer countries than many of us realize or appreciate. So let's start with an overview of informal housing. What is it, and what forms does it tend to take in wealthier places like the United States?

Vinit Mukhija 7:44
Yes, so Shane, I define informal housing as unpermitted or unregulated housing. And in the global South, it typically addresses the need of housing that's not available at a particular price, a particular type, and price and type are often associated, as well as a particular location. It might include a type of opportunity to own. And it's so much fun to have this conversation with you and Paavo because the first research I did on this topic, of looking at informal housing in the Global North, was in collaboration with Paavo, and we looked at informal subdivisions in California. So the conventional wisdom in the US has typically been bad regulations, and enforcement is tight. So informal housing is unlikely. And the literature has suggested that well, we might have informal housing in poor rural areas where we have poorly paid workers with very little capacity to own housing or rent housing, a desire to own housing, and there lacks regulations. So the literature started looking at informal subdivisions in Texas and named them colonias. And its conventional wisdom was that these were immigrants from Mexico. And they were used to the idea of having subdivisions without infrastructure. But they were still attractive because they could own a piece of land and over time, or incrementally develop their house. That's the main existing literature. Paavo and I I started looking at designated colonias in California. In Texas, the explanation was that these subdivisions existed because there were no regulations requiring infrastructure. So they were unregulated, but there was no requirement, that's how they exist.

Paavo Monkkonen 10:04
It was Texas as well as far as immigrants.

Vinit Mukhija 10:08
Paavo and I started looking at it, and we were surprised to see that they were colonias in California. And we were also in a way, maybe trapped by this idea that unregulated housing is difficult or unlikely to happen in the US. And what we found in California was, the subdivisions had been divided after the California Subdivision Map Act. So they were titled they were laid out but before infrastructure requirements were added to the California Subdivision Map Act. So they didn't have infrastructure, and that's why they were perfectly logical in a sense. But we also found out that contrary to the conventional wisdom, many of them had snowbirds, white retirees, who would come and spend the winters in California. So we contributed to sort of explaining a different kind of subdivision that was happening, in a way because regulations were not a hurdle but they were not just limited to immigrants. And what I have done later on, in association with other students, other colleagues looking at Los Angeles is trying to look at informal housing in the US, not just in rural areas, but in cities like Los Angeles, right, where, because most of our land is single family, housing neighborhoods, we find a tremendous amount of unpermitted housing developing in these neighborhoods, to meet housing needs,

Shane Phillips 11:58
Right, and not just because it's where most of the land is, or what most of the land is zoned for, but also because these parcels tend to be pretty lightly developed. And they have a lot of open space on which you could build another unit or, or they are large enough that you can subdivide kind of chop up the unit you have into multiple units.

Vinit Mukhija 12:18
That's the brilliance of the strategy, in which the ways in which people have added informal housing in single family, housing neighborhoods is without materially affecting too much the existing housing stock, there is an opportunity to add additional units. And that can be done at times discreetly in a way that either it's not visible to neighbors, or at least there's some everyday diplomacy that it doesn't burden neighbors.

Shane Phillips 12:52
And we will get into a little more on who owns informal housing, and just additional second units and that kind of thing, in the city of LA and elsewhere. But can you say a little bit just at a high level right now about who it's for - who, let's say in Los Angeles, is living in the informal housing here?

Vinit Mukhija 13:12
Yes. Because we had done this research in California's rural areas, and we knew that informal housing was not just immigrants, I kind of expected the same thing in Los Angeles. And I would like to think that just like the global South, informal housing in the Global North, kind of tries to provide housing at a price of a type, and in locations where it's not being supplied by the formal market. Some of the early attention in the city of LA was on immigrant workers in gateway cities that were there living in garages, because that's where the jobs were. And I remember there was a newspaper quote, by our late colleague, Leo Estrada, who was asked about that. And he explained, those places don't have apartments, they have garages, and that's why they become housing. But at the same time, you know, the way I started thinking about ADUs was in terms of adding a small unit that would be an independent place for my parents that they could stay in. So one can think of affluent neighborhoods that still have single family zoning, there is a need for a different kind of housing. And therefore, if an ADU is not allowed, informal housing becomes attractive. So in that sense, it's a housing addition that can cut across income, race and class groups, but be attractive for different reasons across cities.

Shane Phillips 14:52
Depending on where it's located and kind of the quality of it....

Paavo Monkkonen 14:55
Yes, and just can I jump in with two of the maybe most famous unpermitted housing units for wealthy people. One is maybe an apocryphal story, which is the Charles Tebow, of the Tebow sorting model and Urban economics supposedly wrote that paper while a graduate student living in a garage, converted garage in Beverly Hills. I've never verified that story because I want to....

Shane Phillips 15:20
Let's just assume it's true.

Paavo Monkkonen 15:22
And then the other one of course is Kato Kaelin living.

Vinit Mukhija 15:27
Yes, yes, and you know, they're sort of, I'm forgetting the name of the TV show, Happy Days or oh, my goodness. I'm not that old, Okay, I will have to make....

Shane Phillips 15:41
When I was a kid new

Vinit Mukhija 15:44
"Fonzie" or "The Fonz" wow, he lived in the unit above the garage.

Shane Phillips 15:50
That's awesome. I mean, he's too cool to live in formal housing. I do want to make sure before we get too far that we are being very clear about what is meant by informal housing because you talked about the colonias but we're really talking about something very different in the city of LA. And so this certainly includes people living in garages that are either fully converted and like, really look like an apartment unit, and others that are very kind of poorly converted, not insulated, don't have a full kitchen or bathroom, all these kinds of things. And then there's like purpose built structures in people's backyards, there's doorsheds. What is the range of affordable housing you find in a place like Los Angeles?

Vinit Mukhija 16:33
Tremendous range Shane. So it is, you're absolutely right, we have storage sheds, which are probably the most risky, the least livable on one end, and you might have, on the other hand in affluent neighborhoods, a house that is built very much up to code, but people will not get a permit. So it's just

Shane Phillips 17:01
An everything in between...

Vinit Mukhija 17:02
It's an everything in between exactly. So it could be extremely high quality housing to extremely dangerous, with the only similarity being that people don't have permits for those units.

Shane Phillips 17:15
And how should we think about informal housing in relation to housing that's formally allowed, but incremental maybe in ways that are similar to informal housing? We're going to be throwing around a lot of terms in this conversation, like informal housing, like accessory dwelling units, and second units. So is there a qualitative difference between these types of housing or is it more of a spectrum? As I was thinking about this, I was wondering if we should think about this as like, rather than, you know, just a single spectrum, maybe two axes. So like on an X axis, you might have the process that goes from formal to informal. And on the y axis, you would have the actual like method or scale of production that goes from incremental to larger and more coordinated projects. Does that, you know, two axis quadrant system

Paavo Monkkonen 18:06
That makes sense.

Shane Phillips 18:06
I just feel like it's important to distinguish formal from info and incremental from these larger and more coordinated developments.

Vinit Mukhija 18:14
I totally understand; I do understand that. Yes, there is a continuum from informal to formal, maybe we can think about it on an axis. There are certainly overlaps, for example, an informal unit, you might get a formal worker to come and do part of it, you might get a formal loan, for some part of it. In terms of planning permits. It's informal, but I wasn't quite sure about what you mean, on the other axis.

Paavo Monkkonen 18:49
Yeah, I think I mean, I think the regulatory compliance access is definitely one informality formality. And then the other one is production process. And so is it the case that you're adding slowly over time, space to an existing house or addinga few units in the backyard over time? Or is it the case where you fully build something out like a whole tract,

it never changed fast?

Yeah, no sprawl development or ADU apartment building, that's sort of the other end of the spectrum on the reproduction process.

Vinit Mukhija 19:16
In my mind, you can have informal housing that incrementally improves, which is sort of what we conventionally associated with, or that is fully built before a tenant lives in there, or someone lives in there. So one can even think of trailers that come in the backyard in a way that's fully complete housing. It's not going to expand over time. But it's unpermitted and it's informal. On the other hand, we might have formal housing, for example, as we were talking about Levittown, or Lakewood, that starts with 1000 square feet, but over For last decades, people have expanded those units to make them say much bigger - three bedroom, four bedroom more. In my mind, at least, informality and formality and incrementality, and full production could go in either direction.

Paavo Monkkonen 20:19
Yeah, I mean, I think you'd rarely get full built-out informal, but you do get kind of formal incremental, where you're doing remodels, you're adding room with all the permits everything up to code.

Vinit Mukhija 20:31
And that's a big part of, you know, if people are living in place, the house changes to meet their needs, it might expand, different users might come; in COVID, we probably have seen more office spaces being converted and added.

Shane Phillips 20:47
I do think it's useful to think of just kind of normal renovations people do to their homes as they live in them without thinking about housing an additional person or family as part of this continuum, or spectrum as just part of this process. You know, adding an internal bedroom, these kinds of things (like) knocking down a wall like, I think this is on that spectrum. But there is a sort of qualitative difference when you are allowing another whole household onto your property in some way, and another you don't like that.

Vinit Mukhija 21:16
But there are also some interesting overlaps, because people might get a permit for a bedroom addition. And that new bedroom can become an informal unit. So those are those interesting things where they overlap, but it also overlaps in terms of who is doing it. It might be that a formal unit is going to be done by a licensed contractor, and they have to work with permits. But if it's informal edition, that licensed contractor might offer their handy Novogratz

Paavo Monkkonen 21:53
Anecdote in the book.

Vinit Mukhija 21:56
And it'll be done nicely. Yeah, right, it's not permitted.

Paavo Monkkonen 21:59
Right, right. That was a great anecdote in the book.

Shane Phillips 22:01
So your early scholarship focused on informal settlements, primarily in the Global South, and specifically in Mumbai, India. And you draw various connections between the development of informal settlements in poor nations and the incremental development of informal housing in places like LA, could you say a bit about where you see similarities that are important or maybe surprising, especially, you know, to our mostly North American audience?

Vinit Mukhija 22:29
That's a great question. And I'm going to hope that you and Paavo also add to my answer in some ways. So among the similarities, and all of these, in my mind, there's a degree of similarity and a degree of differences. So in my mind, prevalence has always been associated with the Global South of informal housing. And what I've tried to do in this book is make sure that the idea comes across that informal housing is prevalent in the global North. The literature has suggested or taken the position often that when we do have informal housing in the Global North, it's mostly associated with immigrants from the Global South. And I've tried to suggest that's not the case. So prevalence in some ways, as a global model of development, I think is across the Global South and the Global North. I think the motivations are lack of price type, location that the formal market, so there are similarities there. There are also questions about how these are addressed in public policy, I think the global South, and the Global South doesn't necessarily do a very good job of addressing informal housing. But it does a better job of addressing informal housing, because it recognizes it. And there are still pushes in the Global South to get rid of informal housing but there are also more advances that are about providing land titles or providing infrastructure. And the global north is still not being able to, I think think of policy responses more creatively. Now the difference is, you're more likely to see informal housing in the Global South, you're less likely to see it (in the Global North). However, in some ways, there is a stark similarity in the way informal housing enters or doesn't enter our policy imagination and policy responses. Both places, pay well alone in some ways, even in the Global North. I'm surprised by how many policymakers planners know about informal housing, but there is no response and even in the Global South, everyone knows about it but there is a limited amount of direct response to it.

Shane Phillips 25:02
Here in the US or maybe at least in my experience in LA, we don't really talk about it as informal housing. We tend to say things like unpermitted units, that kind of thing...

Paavo Monkkonen 25:13
Legal or illegal?

Shane Phillips 25:14
Yes. kind of transitioned over time from illegal into unpermitted but I guess it depends on how how unpermitted it is. If it's like dangerously, unpermitted, and people are at risk, then maybe we're a little more...

Vinit Mukhija 25:28
I think I've tried to show that the scale is significant that we shouldn't be talking about. It's not a marginal issue, and it's certainly very important to some people who have absolutely no options.

Shane Phillips 25:44
Right.

Vinit Mukhija 25:45
I think the other thing I was thinking especially, we do think about informal housing more associated with the periphery, in the Global South. However, there's published research, there's others research, Mike, that has argued global informal housing can be centrally located. It's an incentive for redevelopment in a place like Mumbai, it fits in with I'm forgetting the Spanish term for when it's inner city, in formal housing versus the peripheral one.

Paavo Monkkonen 26:16
Oh, well, I mean, it varies by country, right; the "vecidandes" of Mexico City are the famous kind of tenant style.

Vinit Mukhija 26:24
Yes, yes. And then in the Global North, we might think of it as more in the center. But some of the early research is about, or early recognition is about these unpermitted accessory dwelling units in suburban areas where they will providing affordable housing. So they might be against some differences, again, in terms of where it is more prevalent, but similarities that they are spatially wherever people need to be, and where is this lack of housing, you are going to find informal housing. And one more, Shane, I was reading in your notes somewhere, which I think is a good one, is because in the global north in the US, it tends to be more distributed and dispersed, compared to where we might have informal settlements in the Global South. That has consequences, one in terms of social networks of residents, but more importantly, perhaps even in terms of their ability to organize and demand for things. So global South, we might see a political demands for infrastructure, in the Global North, we're less likely to see demands for upgrading assessments of unpermitted units.

Paavo Monkkonen 27:47
Yeah, no, I think that's a really good point. And it speaks to kind of where it's tolerated and where it's enforced right? I think that that's one of the differences I would say is that here, it's allowed to exist as long as it's not seen, or it's not in the face of people that that might get mad and actually bring the rules to bear. I guess another difference. And I wonder what you think about this is how much it deviates from the rules, right? And so thinking about, is it just that you didn't get the permit to do that in addition? Or is it that you're adding three kitchens on a single family lot in separate buildings, right, which is like a bigger deviation from the rules of a single family zone. And so like in a place like Mexico, where there isn't as strict density regulations around a parcel, right, and you can add three kitchens as long as you're within the FAR or whatever, that might be an easier kind of less deviation from the rule, and therefore less enforceable.

Vinit Mukhija 28:46
It's possible Paavo. But again, because there's so much diversity within the informal housing, I'm sort of a little hesitant to completely agree with that.

Makes sense

Because I think some of the cases that we have seen, some of the cases, they just look like formal housing. I'm surprised so there's very little deviation, but on the others, we do see significant differences from regulations and norms so there might be more deviation, right?

Shane Phillips 29:18
I think it'd be helpful to hear about how the regulatory environment has evolved for the types of single family housing neighborhoods that you're discussing in the book. And what's really come of those changes. Remaking the American dream starts off focused on informal housing and uses Los Angeles as one of its main case studies. But over time, as the housing market changes, and the financial and political pressures sort of build up, the regulatory environment has been changing as well. And now, second, and third units are a much more formalized part of the housing market. And it seems that places with the biggest affordability problems are often at the vanguard of those reforms. What were some of the salient policy debates happening in the era where we were mostly talking about informal housing? And how have those debates and policy ideas shifted over time?

Vinit Mukhija 30:11
Great question. In some ways, what is interesting about the Single Family Housing neighborhood, is that it's such a strong cultural idea. It's an idea about a way of living that is homogenous, but also rationally driven in the minds of residents, because it preserves property values, highly prejudiced, but rationally driven. And what is in to me interesting about ADU second units, third units, is that contrary to the fears of owners of reducing their property values, they end up increasing their property values. But there is this disassociation between what is culturally valued, what might be economically more valuable, and the information that makes it clear where the higher property values is. So for decades, we have not allowed additional units, and as a result, all our prejudices about informal housing, whether and their association with poorer global south immigrants have made it very difficult to allow for new policies or policy changes. But that has, as you know, changed and in California, interestingly some of the initial changes came from the city of Santa Cruz, picked up and made much more powerful by the state of California, but the state of California and I know we will, in a second podcast talk more about state policies and ADUs, but one of the things I was unhappy with is the state of California renamed second units as ADUs. And I would like to see junior ADUs called as third units, and in my mind, that can help provide a more greater diversity of housing options, not just for rent, but if they're allowed to be sold for sale as well.

Shane Phillips 32:18
I do imagine that there's like a political motive; accessory dwelling units does not sound as scary as a second units, third units.

Vinit Mukhija 32:27
That's exactly it because they used to be called second unit, and as the policies were made more liberal, right, like the state legislature, to cut down on that backlash, they changed it to ADUs

Paavo Monkkonen 32:42
Is it really remaking the American dream? I mean, to me, it seems like it's upholding the like hierarchy of the single family homeowner is still the lord of the manor, and then we have these accessory things in the backyard right?

Vinit Mukhija 32:57
I mean, great point, it is remaking but does it change...

Shane Phillips 33:02
It destroys it!

Vinit Mukhija 33:03
... does it change that privilege? I think that is still a long way to go right, and I think we need those changes so that is a problem. But on the policy side, also what we have seen is, one of the reasons global south scholars don't like to use the word in illegal housing and formal housing is if we call it illegal, then it feels like the only policy responses to legalize it. If we call it informal, then our response could be to formalize it - formalization could include legalization, it could include provide infrastructure, it could include do something about the tenants,

Shane Phillips 33:49
Right

Vinit Mukhija 33:49
It could include just recording the property and acknowledgement of it provides a perception of security to the owner so it's a little more broader. What we have seen in California, the progress we have seen, is on the legalization of additional units on single family lots, and it's a remarkably positive change. I would love to see some of these other things that I mentioned as part of formalization be part of the policy apparatus of addressing....

Maybe you could just just speak to the specific difference between legalization and formalization.

Sure, so in my mind, what we have done, that is allow an ADU, is legalization of additional density. Allowing a junior ADU is again legalization of additional density and fantastic. What I would like to see is we know some of these informal units are in poor housing conditions but they provide great housing. In the Global South, we sometimes say government should come in and invest in infrastructure, also In addition to land titles, I would like to see some upgrading assistance because in my mind, at a relatively low expense, we can have additional housing units that are livable and secure. I would like to see planners and policymakers acknowledge and talk about this, because that can be just for owners to know that these are recognized, provides a little bit of security that they might invest more in improving the units. On the other hand, I would also like to see some investments, just risk abatement, I would like to see some of the poorest units shut down, and tenants resettled. I would like to see if these neighborhoods are getting denser, these single family housing neighborhoods, I'd like to see a little more public investment in not just physical infrastructure but social infrastructure.

Shane Phillips 36:00
Could you say a bit about the history in Los Angeles in particular, of previous attempts to either formalize or legalize? Basically, there were efforts to bring unpermitted units into the permitted market into the formal housing market, and they failed repeatedly. And so what changed to make that possible because now in addition to legalizing ADUs, actually a very large share, or at least a large share of the ADUs that we're getting in Los Angeles, are just unpermitted units. We have this whole separate ordinance to unpermitted dwelling unit ordinance, yes, that if people, you know, reserve the unit at a certain affordability level, I think for some duration, they can kind of come into the formal housing sector, officially, why didn't we get there earlier, and how did we finally get there?

Vinit Mukhija 36:57
So one of the greatest things we had in the city was a Garage Housing Taskforce. And I'm getting my dates mixed, but in the 90s. And the Garage Housing Taskforce was, I believe, staffed by the housing department and the planning department, and it was a cross city across the departments, and they realized, look, we have these unpermitted units, what should we do about them? And they had some what I would call very sophisticated policy advice, which was, let's close some of them, rehouse the tenants, let's abate the risk in some of them, let's legalize them across the city. And so they came up with, or "let's legalize them in specific neighborhoods where we find them". So they did a whole range of options based on some of these choices. But it didn't go anywhere. It was seen as for the first problem was changing the character of single-family housing neighborhoods, was considered a no go to begin. And from that it made all the other options seem unlikely. Certainly some of it would require spending money. So we have sort of evolved from that position to where we're not more flexible with our regulations. We've sort of a little less willing to spend money. But we have made progress in changing regulations. The unpermitted dwelling unit ordinance is an interesting innovation, because it recognizes that we've got unpermitted units in our multifamily housing also. And what it does is we have periodic inspection of our multifamily housing units to maintain the quantity of them. And those inspections kept on bringing a couple of 1000 units every year that were unpermitted. And they were like the city facing a housing crisis...

Shane Phillips 39:02
they didn't want to just shut them down fully

Vinit Mukhija 39:04
...reluctant to just shut it down

Shane Phillips 39:06
Right

Vinit Mukhija 39:06
So they wanted to carve out a way to preserve those, and the compromise they came up with was to allow them provided owners with keep them affordable. And it has struggled in implementation, partly because many of those owners either don't have the financial resources to upgrade, or they can't be legalized because they still don't meet existing zoning privates.

Paavo Monkkonen 39:34
And I think just maybe to recap this debate that I've heard maybe more explicitly in other countries than in the US, but this idea that once we start allowing lower levels of regulation to apply to units, then we get into dangerous territory with hazards. Right, and so you mentioned this idea of risk mitigation, right. So across this range of different kinds of informal housing, there are some that that aren't habitable, that are risky for the residents, and those probably we should be shutting down with regulations; some regulations are very important. And we should have those and enforce those, and then kind of where do you draw the line? And I think part of the interesting thing for me is, you know, as countries have different levels of economic prosperity, their minimum quality standards probably should change. Because like, we're not as rich as we used to be but that decision to adjust standards downward is a politically difficult thing to say, right? Like, we're not as rich as we used to be so let's like lower our quality standards and expectations for people's housing right?

Vinit Mukhija 40:33
It's a real challenge. And you're absolutely right, the biggest criticism in a way the Garage Housing Taskforce recommendations received was this exactly, this is what the critics said, "that's a slippery slope".

Paavo Monkkonen 40:48
Slippery slope is we can't allow it

Shane Phillips 40:52
You know, especially easy for the wealthy elites of a city to say, like census "look, nobody should live like that, we're gonna make it illegal" without actually providing the resources, tax alternatives yeah.

Vinit Mukhija 41:05
And one of the most interesting examples for me, and both of you are much taller than me, and you probably feel like... Shane you're even taller, what should be the minimum height of a habitable space?

Shane Phillips 41:19
Right.

Vinit Mukhija 41:19
And it's an interesting question.

Shane Phillips 41:22
I have stronger feelings about this with the planes than...

Vinit Mukhija 41:26
I suspect, if I asked you what should be the minimum height, you will, I'm not sure what number you end up with but it'll be a little higher than the number I end up with. But what I was surprised was looking at Vancouver and Toronto, Vancouver, I was shocked, it allows six feet six inches in its basement department.

Shane Phillips 41:49
Toronto allows to be living in

Vinit Mukhija 41:52
There is a diversity of people so...

Toronto, I was shocked, even six foot four inches, not the end. The question is, how did they come to these numbers, but they were very smart. They said, let's look at our basement apartments, the existing stock, and the height they found was six and a half feet, six feet four inches. So the choices are two; in a place like Vancouver, a third of those homes, have a basement apartment unpermitted. So you could either try to use tremendous enforcement to try to shut it down, right, which is unlikely, you lose the stock, you try to insist that people dig their floors down, make a few inches more, which happens - that's typically how regulations are structured. Or you say, "okay, we are going to allow based on what exists, because that's an important", and they did that, and I think...

Shane Phillips 42:51
I mean, if you have a basement apartment, that is, let's say, six foot six, I'm six four, so I'm not going to live there but like, there are five foot-five people who are probably going to be fine in that and better to keep that unit available to them, at least to someone who will find it perfectly livable than to just shut it down. If it was reasonable to expect people to increase the height by six inches or something, and that was actually feasible, then it would be a different story. But in practice, we know that's just not going to happen in a lot of cases, and you're just gonna end up with nothing.

Vinit Mukhija 43:24
And that's exactly right, and I think we need that pragmatism, acknowledgement of existing conditions, to set our standards, which we have a tendency to, the global south literature says, we tend to gold plate our standards, because that seems like "why take of risk" but realities are so different from what some of these standards are.

Shane Phillips 43:51
Yeah, an interesting, and I think somewhat surprising finding in your book is that although informal housing was less common in the poorer parts of Los Angeles, and also less common in the more racially and ethnically diverse neighborhoods, complaints by neighbors, that triggered city inspections, were actually more common in those places. If anything, I'd have expected the nosy rich neighbors to be more likely to call the building code police on you. So could you talk about those findings and what you think explains them?

Vinit Mukhija 44:22
Yes, you're exactly right. I found that complaints and prevalence were not correlated.

Shane Phillips 44:30
So just to like, make that clear, the places with the most informal housing or second units or whatever, were not the places with the most complaints.

Vinit Mukhija 44:38
Yes. So I tried to estimate where the informal housing is by looking at real estate listings. And my assumption was that many people will hint at their second units because they expect to get a higher value for their sale. So that's how I mapped out the prevalence of informal housing, which, to me, was a surprise. But this was distributed all across the city. It wasn't just the global south neighborhoods or the poorer neighborhoods, it was the west side and the central city more richer parts. And the explanation was that these were people with larger lots, as well as the resources to add a second unit. Then I looked at complaints to LA Department of Building and Services, I estimated where those complaints were, and this is yes, this was surprising in some ways, the most complaints were in the less affluent parts of the cities, not the same parts where I had found the real estate listings. Now, in some ways, this is also perfectly rational. If you're in a rich neighborhood, if your neighbor has an unpermitted unit, it's likely that it's in better quality, they've invested in it, and as a result, people tolerate it. The other thing is, parking is such a big driver of our complaints, we get mad if someone's parked in front of our house, and we sort of see where did that car come from? If it's from a neighbor, in second units then we're ready to complain. So in bigger lots, not only is there more space to build the unit, but they have long driveways, so they can have more car parks on the driveways, and they avoid some of that tension that a neighbor has.

Shane Phillips 46:35
I think you also pointed out that in the poor neighborhoods, you might be more likely to have the informal housing take the form of the garage conversion, or not even much of a conversion at all, but people living in the garage. So not only is there less land in the first place for parking, but also they're using the garage that's not available either, and so you're really pushing all the cars out onto the street.

Vinit Mukhija 46:55
That's exactly i. And I was in some ways. surprised to find that the most common typology of the unpermitted second unit was a backyard unit, not a garage conversion. And I think that was more common in rich neighborhoods. They had the reason they didn't need to convert the garage. But that has, as you rightly said, reduces the anxiety of the neighbors like a little plus it's easier to hide that backyard unit and the garage unit starts becoming more visible from the street.

Shane Phillips 47:29
Yeah, how do people get away with building an entire home in their backyards, without their neighbors being like, "Hey, what's going on over there? You got a permit for that?"

Vinit Mukhija 47:38
Yeah, I mean, I was surprised to see this level of prevalence, I mean, and again, I am still expecting it to be between five to 10% of the human homes have it. But one reason is, we have more restriction on the front fences, we have less restriction on what's happening in the back in terms of fences. So I'm guessing it's a little easier to hide, it's a little easier to suggest you're doing something else, you're doing expanding a garage, you're doing a remodel.

Shane Phillips 48:13
Most people aren't actually going to ask you about permits, rather just assume you would but also, if you live in a single family neighborhood, people tend to be aware of that and know that multiple units are not generally allowed.

Vinit Mukhija 48:24
Yeah, but it is, or maybe you tolerate it because you think "okay, I can do it as well"

Shane Phillips 48:30
Life finds a way. So on a related note, you make the case that even though lower-income households, and immigrants may be more reliant on informal housing and the informal economy more generally, it's wealthier households that are best able to exploit and profit from it. That disparity in code enforcement complaints is one example. But another one comes from the lack of, I guess, institutionalized financial resources available to build or improve second units, legal or not. And when I say institutionalized financial resources, I mean, stuff like bank loans, also, you know, government funded grants or loans, as opposed to personal resources, like being able to take out some of your own housing equity to build something like this. Could you say more about how we end up with this unequal ability to participate in and benefit from the informal housing market? And whatever factors make it more difficult for lower or middle income homeowners, or homeowners of color to participate in that market as owners and as landlords?

Vinit Mukhija 49:37
Yeah, now, you're right. So one of the things I argue is because affluent neighborhoods have less complaints, people are less worried about inspections, so they invest more in their housing. There's a virtual cycle of more investment, better housing, more valuable assets being created. On the other hand, in less affluent neighborhoods, they're more complaints. So there is a risk in investing in upgrading the unit, there is less investment, and it's a vicious cycle that is waiting for the inspectors. So you might even have home kitchens that are mobile, they'll come back in after the inspectors have come, to camouflage the second unit. But the cost is you don't have an asset that's increasing in value the way it is in a rich neighborhood. Some of the people who pay the price are the folks who live in that housing. I mean, and again, this is sort of income corresponding, but tenants who live in unpermitted units in less affluent neighborhoods have some of the riskiest housing, it may also be that owners of properties have to sell their units to sort of get the maximum benefit they can, because they can't afford to stay there and benefit at the same time, that becomes a problem. I am working on a neighborhood, and maybe I won't mention the neighborhood, but it is a immigrant working class neighborhood. And they have this opportunity, high ownership rate but they have this opportunity to get subsidized solar panels. And the expectation was that there would be a tremendous demand for these solar panels; they're fully subsidized, maintenance costs are covered but the community has been reluctant to get it. And they're reluctant because many of them have an unpermitted second unit. To get the solar panels, they need the building inspectors come in, and make sure that the solar panels are going on a safe structure. So as a result, they're turning down subsidies. I think a similar thing happened with the LA Airport Expansion, where there was money to provide sound insulation, double-pane windows but the properties that were closest to the airport, had informality, substandard things, they couldn't capture these benefits. And the benefits kept going away and away from the airport. So you ended up with air conditioning grounds, sound proof double pane windows, if you were further away from the neighbor, as opposed to be the ones. And you also mentioned change, access to loans is a big problem. You know, there was the city of LA when it stopped wanting to do its pilot projects of ADUs, it looked at Pacoima as a potential neighborhood but it found it very difficult to find a homeowner that could qualify for not having debt and having enough income to afford a loan.

Paavo Monkkonen 52:57
I mean, it seems like just one more way of all the different ways that inequality kind of trickles out through every aspect of people's lives. Especially. I mean, I'm sure it overlaps with immigration status, as well.

Vinit Mukhija 53:09
A hundred percent. Yes, yes!

Paavo Monkkonen 53:10
So it's just you know, can you access all the formal institutions successfully or not in this in this country?

Shane Phillips 53:15
Yeah, assuming they're even available, right, yeah, even when they are can't necessarily access them. digging more into complaints and code enforcement and their consequences. You describe how tenants will sometimes report substandard or unsafe informal housing to the city, hoping that their landlord will be required to improve the unit. But unfortunately, the more likely outcome may be that the owner is told they need to remove the unpermitted unit or convert it back to its original use, and the tenants will end up being evicted, often without any kind of relocation assistance. The same thing can happen when neighbors report these units, and you actually describe how sometimes an owner will report their own unit to the city, presumably, anonymously, as a way of evicting their tenants indirectly so they can sort of pin the blame on the city rather than themselves. Can you say more about what happens when informal housing is recorded and found non-compliant by local officials? In the cases where a unit does have to be torn down or converted to a non-residential use, do we know anything about what happens to the tenants?

Vinit Mukhija 54:25
No, we don't. That's the short answer. I mean, it's a tragedy that our enforcement is focused very much on the unit or the property, and it doesn't consider what happens to the tenant. There is no institutional means or emphasis on tracking the tenants. There's no follow up. There is no provision of requirement to provide alternatives right.

Shane Phillips 54:51
And I think it's important just to say that the tenants living in these units I think often know that their housing is substandard or unsafe or what have you. But they're there because they feel they have no alternative. It's what they can afford. And so this is not like where they're choosing to live in unpermitted or illegal housing or unsafe housing, this is a lack of options.

Vinit Mukhija 55:14
It is absolutely lack of options. This is what they can afford, where they need to be. So that's 100%. And it's a sad thing, because, you know, we have a planning program. And I am not sure, I know many of our graduates who go and work in building enforcement. And they don't work there because there is no emphasis on the tenants. It's all about the standards of the property. And in fact, I remember talking to one of our former students who graduated after the Great Recession, she came to our program, she was interested in housing, that was her dream. There was a great reception, she couldn't find a job so she ended up in building enforcement. And then she would do this work, and she would find herself many times enforcing against an unpermitted ADU. At that time, she would try our best to try to help the owner find a way to legalize them, when it was much more difficult adecade ago. She would do her job, and then she would, after her inspection, go back in her car and cry, because it was exactly the opposite of what she wanted her planning jobs to be about.

It's depressing.

So that's why even our graduates who end up in 'Building and Safety' don't last there that long, right? And which is a pity, because in some ways, we do want these institutions to change their focus. And by not participating in how they run, we can't do that either.

Paavo Monkkonen 56:51
And I guess I mean, it makes me think about your work on Doraville and kind of this challenge of the government investing in a private landlords property, right? Because, you know, you could think of a better policy approach to building enforcement that finds an ADU that is risky for the tenants or unsafe for the tenants, a better policy approach would be a loan or a grant of $15,000, to get it up to some level of safety and the tenant can stay there. But you know, this idea that we can't support the private landlord's business operation is something holding us back on that front.

Shane Phillips 57:26
I think that's actually a good transition to talking a little bit about policies and programs that are trying to address some of these inequalities and other challenges that we've been discussing. What can you say about progress that's been made on improving substandard housing in ways that don't lead to the eviction of tenants, or on making it easier for low income and middle income homeowners to build second units like wealthier households have been able to do or anything else in this kind of sphere that you've seen positive signs?

Vinit Mukhija 57:59
That should be an easy to answer question, depressingly challenging. And so, the theory should be is simple. We should be able to come in, help the owner and require some sort of short rent stabilization agreement. And that would be the way to help both the owner and the tenant. What we have seen is examples of, we were talking about the city of LA's unpermitted dwelling unit ordinance, which tries to create a pathway for these unpermitted units in multifamily housing requires affordability for one unit, at least, it doesn't provide the financial assistance.

Shane Phillips 58:45
And I think it gets pretty significantly below market prices that they're requiring, on top of probably a lot of upgrades or improvements that need to be made to come into compliance and putting those two things together, puts you in a tough spot.

Vinit Mukhija 59:00
And a result, the number of units that have been legalized through the ordinance is very little. So it's certainly not working because of exactly what you said.

Shane Phillips 59:14
But we run into this problem where I mean, it's really just more of a political problem. But it is an important one, where I think people feel like, well, those owners broke the rules, they built this thing illegally or whatever. And so why should we give them resources now or allow them to fix up their unit and rent it perfectly legally at market rate? Like, I think there's like a punitive aspect to this where we want to punish people not just totally give them amnesty, essentially

Vinit Mukhija 59:45
It could be

Shane Phillips 59:48
I'd be clarifying. I think it's like as society that tends to be the case. It's not how I feel about it, but I think that's kind of where we stand.

There is certainly that sentiment, but I'm also not sure how much willingness or interest there is at various local, state federal government levels in spending that money. So there certainly is a bit of a political challenge in making sure the system is fair. But there is also a lack of willingness to spend,

Paavo Monkkonen 1:00:15
My brother spent like $600,000 on a new unit, really nice housing, you know, 15 on it

Vinit Mukhija 1:00:21
And this is sort of the criticism we have sometimes in the Global South literature. There's less interest in upgrading, providing infrastructure than building a new project, where you can have a ribbon cutting.

Shane Phillips 1:00:35
Yeah, so well, and I think even less even big. Even less cynically, I think I can see the appeal of saying like, well, that unit, as bad as it is, it already exists. It's already housing someone, maybe not always in the case of this unpermitted dwelling unit ordinance, but generally, whereas if we're gonna build a new unit, that's an additional unit added to the housing stocks. Now we have to rather than just improving one older one, and certainly the global South, certainly Los Angeles needs a lot more housing period. And so again, I'm not saying that it's we shouldn't be doing this, but I can understand why if you're shutting it down, then you're removing a unit. Yeah, if you are shutting down

Vinit Mukhija 1:01:15
Sure that that's the problem. At least with the unpermitted dwelling units that are being caught in the systematic code enforcement process, is if they're not improved, I believe this to be shut down right. So there is a loss there. On a similar way, one of the more well known was New York City's loft law, which again, in a way, legalized units in warehouse district, commercial areas, but it required rent stabilization. So there was a legal pathway with a requirement but again, no funding that came in. There have been pilot projects of upgrading, and the challenge with upgrading has always been, there's some money, but it's also labor-intensive to do, you have to get in touch with the owners, help them do some problem solving because if zoning is not a constraint, there might be some other constraints that need to be resolved. But New York City East had a basement conversion program, and it was only to under 50,000 that was allocated for it but that's a small amount, Toronto Markdale pilot project tried to do it there so there have been a few of these pilot projects. LAMAS has tried to work with the county to provide financing for homeowners that was interested in building ADUs so they will provide financing as well as technical assistance. And they had funding to only cover I think, five ADUs but over 200 people applied to participate. So there is demand. The state of California through Cal HFA, Cal housing Finance Agency, did do a program which provided $100 million, but it again served only an estimated 2500 households. So there is so much demand for it, and if we do compare it with that cost of how much we are willing to spend for a new unit, these kinds of small infill projects, whether they are new ADUs, or upgrading of existing ADUs, we could have significantly more housing, and significantly better condition housing. One other thing I want to mention, which is a really small thing, but I found it very impressive. Vancouver, as I mentioned, has these tremendous amount of semi basement units, and owners typically live on the top where lower units or rented out. A third of the homes have it. The Vancouver Fire Department did this amazing thing where they said they were going to give out free smoke alarms to anyone who took it with the idea that this was a small thing, a small investment that signaled a bit to people that their unpermitted units was recognized, accepted, but more importantly, helped make them safe as well. So there are perhaps these smaller things that can also be done, and it could be just smoke alarms, right, that send a signal.

Paavo Monkkonen 1:04:27
I mean, that goes right back to the global south literature in the best practice of you know, rather than doing some expensive titling program or formalization process, if you just make some physical investment from the part of the government that signals acceptance of these housing units, then that can have a double effect of some kind of security of tenure some kind of claim to the property rights as well as actual benefit.

Vinit Mukhija 1:04:50
And Paavo correct me if I'm wrong the way I remember your 200 research was Property rights or legalization in general do work. And I think we see that in California, where we're seeing all these greater applications for ADUs. But you found they don't work that well, for low-income neighborhoods.

Paavo Monkkonen 1:05:11
Yeah, I mean, it was more that a lot of the neighborhoods wouldn't go through the whole process. And it was just starting the process and getting some paperwork was was good enough for them. Right. And so this idea of, you know, how deep into the formal bureaucracy do you need to get to be fine with your situation? And I think that was kind of one of the lessons that I took away from that was, how much paperwork do you need to satisfy your your like day to day requirements around security of tenure. I think is something we should, we should think about.

Shane Phillips 1:05:47
All right, so we are planning a second interview on this book that will get further into the nuts and bolts of ADU reforms and the roles state and local governments have played advancing those policies. But today, we've been focused on informal housing and the transition toward formalized, but still incremental housing development. With that in mind, Vinit, give us a bit of an elevator pitch, since this is, you know, the kind of thing you do when you write a book. We've talked about a lot of the challenges that informal housing responds to, and also the problems that result from our reliance on it. And really just, you know, the lack of policies we have in place to take full advantage of it and make it as safe as possible. But I want to hear sort of the positive story about the role of informal and formal incremental housing, and the ways that they're changing our single family neighborhoods for the better. So just, you know, high level close us out, what is that story?

Vinit Mukhija 1:06:46
That's a great question. So if I think about single family, housing, neighborhoods, I think one of the biggest takeaway I want to give our listeners or my readers is that we should think of them as single family housing neighborhoods, with informal second and third units; that is the spatial context. It's not just single family housing now, it does include a lot more things. And that, in some ways, is a positive infill that people are doing, it is providing housing at more affordable price, it is providing housing, that is a type that is not available in those neighborhoods, and in locations where people need labels. And that is a lesson we can take in terms of our legalization. Maybe we want to think about legalization, and we'll discuss more in our second podcast is about how does legalization work in the context of these existing informal units? And how can they be addressed equally? Well, the other positive thing I think about AD use is it does seem to be a gateway to higher density and acceptance, it is owners start recognizing that maybe they can have a second unit, as well as a third unit, why not a fourth unit, so there is something to that.

Shane Phillips 1:08:14
I think there's something too, people don't like developers, let's just put it out there. And so if they can, you know, when we do other kinds of upzoning, it tends to be, "we're going to let the developers build these apartment buildings, these condo buildings, this is something that you know, "normal people can take advantage of". And I think that probably goes a long way toward explaining why these reforms have been as successful as they have.

Vinit Mukhija 1:08:39
I think so because, you know, with other kinds of development, we tried to sell those two neighborhoods and we said, look, you're going to have amenities next to you, you're going to have that little store and all of that and more amenities will come with density. But people always focus on the congestion, and the traffic. With this, part of the opposition is because initially no one sees the benefit. But over time, they realize, "yes, I can materially benefit from this, I will have to deal with some of the congestion that might happen. But here's a financial gain, my Mumbai booked I called it squatters as developers, and for a moment, I thought about calling this "owners as developers". So there is clearly that owner incentive that public policy has to and can, I think try to leverage it does open up on the positive side. Again, I look at this book in a way as a critical appreciation of informal housing, the good things it's done, but some of the challenges, I look at it as a critical appreciation of ADUs, the spatial infill that builds but some of the challenges in terms of, and we'll discuss them more in the next one, but also that that single family home with an ADU is now more expensive unless the owners are allowed to sell them separately. And I look at it with some critical appreciation of the state preemption into this, but also some criticism of where I would like to see states more involved in more money to the cow HFA to allow for low-income homeowners to be able to do this, and things like that, that we'll discuss more next time.

Paavo Monkkonen 1:10:29
If I can just add, I mean, I think you you sort of said it, but just to reiterate this idea that the informal housing production is guiding changes in regulations to some extent, right? So it's showing policymakers what rules can be changed, that are fine and make the housing more accessible and affordable to people, so maybe owners as policymakers or something,

Vinit Mukhija 1:10:52
Certainly policy entrepreneurs, and they have a self interest in doing this, and they've done it by allowing informal units in the first place. They've been the head sort of leaders on this policy change.

Shane Phillips 1:11:07
Yeah, and I think just drawing attention to all of this, to the presence of affordable housing and its challenges, is hopefully going to help push us a little further on the policies and programs we need to make the most of it and get more out of it and get more of it. All right, so this is first of few; Vinit Mukhija, thank you so much for joining us on The Housing Voice podcast.

Vinit Mukhija 1:11:31
Thank you, Shane. Thank you, Paavo, this has been a delight.

Thank you. You can read more about Vinny to work on our website lewis.ucla.edu. Show Notes and a transcript of the interview are there to the UCLA Lewis Center is on Facebook and Twitter. I'm on Twitter at ShaneDPhillips, and paavo is at elpaavo. Thanks for listening. We'll see you next time.

Transcribed by https://otter.ai