California’s Alameda County is developing a housing initiative designed to help older homeowners on fixed incomes unlock the value of their properties while creating additional housing for families.
The program would help eligible seniors finance and build accessory dwelling units (ADUs) on their properties.
Participants would move into the smaller residences, divide their land into separate parcels and sell their original homes. The proceeds could repay construction loans and provide additional financial security, according to a report from the San Francisco Chronicle.
Michelle Starratt, director of the county’s housing department, said the initiative offers an alternative that could allow seniors to remain in their communities.
“That senior is then walking away with a smaller unit, a right-sized unit that they then can live in, hopefully more accessible, and we have created an opportunity for a new family to have a home,” she told the Chronicle.
The proposal draws on several California laws, the outlet explained. Assembly Bill 68 eased restrictions on ADU construction, while Proposition 19 allows eligible homeowners to transfer their property tax assessment to another home under certain conditions. And Senate Bill 9 provides a mechanism for qualifying property owners to split residential lots.
But the proposal in Alameda County faces potential obstacles.
Some homeowners may be reluctant to sell their family home or give up an asset they had hoped to pass on to their heirs. Local officials told the Chronicle that buyers may also have concerns about expectations surrounding their relationship with an older neighbor who previously owned the property.
Starratt said the county plans to address legal and practical complications as the program develops. Officials are seeking an administrator to guide participants through the process.
Outreach is expected to begin in early 2027, with the county aiming to build 10 ADUs in the initial phase and 50 within the following two years.
Reverse mortgages may offer another path for older homeowners seeking accessible, smaller homes.
The Federal Housing Administration-backed Home Equity Conversion Mortgage for Purchase program lets eligible seniors use the proceeds from a home sale to buy a new property without mandatory monthly mortgage payments. Proprietary reverse mortgages can be used in a similar fashion. But these programs remains underused, partly because consumers and real estate professionals lack awareness benefits, industry experts say.
Most older adults prefer to remain in their homes and communities, but housing costs are a leading reason they may have to move, according to a 2024 AARP survey. The findings also show that one in four homeowners ages 50 and older have considered building an ADU.
This article was generated using HousingWire Automation and reviewed by a HousingWire editor before publication.
