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In Law Quarters: Smart Investment Or Not?

In Law Quarters: Smart Investment Or Not?

A Smart Investment

If you’ve never heard of in-law quarters, that’s probably because these housing units faded from the public eye. Due to the passing of strict zoning laws, in-law quarters weren't often built—at least not legally. But, ever since Florida approved legislation that encouraged cities to allow single-family homes to build secondary housing on their properties, things have been looking up for homeowners.

In-law quarters are residential housing units that are secondary to the primary residence of the homeowner. They can be an apartment within the primary residence. Or, they can be an attached or freestanding home on the same lot as the primary residence. In-law quarters go by many names: granny flats, backyard cottages, guest houses, and tiny houses.

You may have run across a few units here in South Florida without even realizing it. According to the US Census, in Broward, Dade, and Palm Beach counties, 86.5% of homes were built between the ‘50s and the late ‘90s. Post-World War II, in-law quarters were in high demand due to the Baby Boomer generation, which in turn meant a huge surge in young families.

Although we weren’t able to find out the numbers for Florida, in San Francisco, California, it's estimated that about 90% of the 30,000 granny flats built in the ‘50s and ‘60s were constructed illegally. Many in-law quarters were built in response to a lack of affordable housing. In fact, now that it’s legal once again, they just might be the housing solution for South Floridians today.

A Lack of Affordable Housing

Overall, almost no new homes have been built throughout Broward, Dade, and Palm Beach counties in the last twenty years. Considering that the Everglades is to the West and beaches surround us on the East, space is limited in South Florida.

Because of this, homeowners have had to get creative with the space they have. You may have seen walk-in closets turned into home offices. Or witnessed one room that’s split into two to make room for an extra occupant. But indelibly, these are all quick fixes to a much bigger problem—sky-high rent rates.

It’s Up to Cities

While Florida has approved legislation to allow the construction of in-law quarters in cities with a recognized shortage of affordable rental units, the final say rests with each city.

Last year, the Miami Beach City Commission approved accessory dwelling units. This will likely become a good source of revenue for older Miami Beach residents or families hit hard financially due to the COVID-19 recession.

Before beginning construction, homeowners must sign an affidavit promising to rent to lower income tenants at a reasonable price. Only then will they be allowed to hold a building permit. Miami Beach has an estimated 320 single-family lots with in-law quarters. This is a promising start if the rest of the state follows suit.

Naturally, to prevent homeowners from renting to partiers, owners must live in the main house. Owners can only rent to those who will stay the year. Short term rentals aren’t allowed with in-law quarters.

In-Law Quarters: Living in Harmony

It’s no surprise that these arrangements can actually end up being beneficial for both homeowners and tenants. In an article published by Jaimie Ross, the President & CEO of the Florida Housing Coalition, Ross writes about how “one homeowner with Alzheimer’s was able to trade in-law quarters for medical services from an in-law quarter tenant, a nurse, who was also delighted by the arrangements”. This shows that the sense of community that in-law quarters can create between homeowner and renter are incredibly strong.

Unlike Airbnb, accessory dwelling units are a permanent fix for renters and homeowners at the end of their rope. Especially now, during COVID-19, an in-law quarter may be more beneficial than an Airbnb. Airbnbs are excellent choices for those who travel, but with the travel and tourism industries suffering, many homeowners who placed their bets on renting a room on Airbnb for extra rental income have been sorely disappointed.

In-law quarters give homeowners and tenants a financial break. This break allows them to save and live more comfortably than if they had to rent separately. It also allows both homeowners and tenants to set boundaries and enjoy their own space. Due to only being allowed to rent to serious tenants, your chances of having a good neighbor would be higher.

In times like these, where the infrastructures of big cities aren’t living up to their names—building an in-law quarter may be just the thing to even the scales.