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Accessory Dwelling Units could make a big difference for veteran homelessness in the Twin Cities — if we just allow them to

Advocates see small homes located on existing residential and nonprofit properties as a possible solution to quickly providing more kinds of housing in Minneapolis and St. Paul, but regulations on the structures — and their costs — have prevented widespread construction.

On November 12, the day after Veterans Day, a small crowd of philanthropists and bureaucrats cut the ribbon of the first of twelve backyard homes now coming online in Minneapolis.
MinnPost photo by Bill Lindeke

Scottie Hall lives in Minneapolis’ Phillips neighborhood, just one block off the Midtown Greenway. Last year, during the unrest that followed George Floyd’s murder, they couldn’t help but notice the people that were were sleeping in tents along the well-used bike trail.

“Last summer, during the uprising, there were so many unhoused people living on the Greenway,” said Hall, motioning to their back yard. “I don’t need all this space. My house came with two garages, but nobody knows why. None of the other houses on the block have it.”

This year, Hall hopes to do something about it. Thanks to the Community Land Trust through which they own their home, Hall connected with a new public benefits company called YardHomes that offers the perfect solution. They would build a new accessory dwelling unit (ADU) in Hall’s backyard, and connect them with a homeless veteran to live there, using a Section 8 voucher.

Hall was thrilled.

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“The homes are very nice looking,” said Hall. “They’re not just slapdash trailers. They have running water and electricity and everything. That’s amazing. I have 2 garages I do not need. This is perfect.”

Focusing on homeless veterans

A lot of politicians promise to solve the homelessness crisis, but almost none of them seem to have much chance of following through with it. Homelessness has been on the rise in Minnesota thanks to the prolonged housing crisis: an acute housing shortage combined with a lack of resources and social support for low-income people.

But two years ago, Gov. Tim Walz launched a campaign to end veteran homelessness in Minnesota, working alongside the Minnesota Assistance Council for Veterans (MACV), a nonprofit founded in 1990. The effort has been making steady progress across the state, including a recent announcement about its success in most Minnesota counties.

Compared to the general challenge, ending veteran homelessness seems doable. There’s more support for veterans, and institutions like the Veterans Administration can better track people. Still, one remaining challenge is the lack of Section 8 (subsidized affordable) housing for veterans.

YardHomes, a new company that constructs ADUs, aims to build practical homes for veterans over the next few years.
YardHomes, a new company that constructs ADUs, aims to build practical homes for veterans over the next few years.
“As of this morning we had 269 homeless veterans on our registry,” said Brad Lindsay,  the Deputy Commissioner for Veterans Affairs. “A third of those have [section 8 housing] vouchers in hand, but can’t find a place to live.”

YardHomes, a new company that constructs ADUs, aims to solve that problem and build practical homes for veterans over the next few years. The effort hopes to clear one persistent hurdle: veterans often have trouble finding homes that meet their specific needs.

“We don’t have the right types of housing; vets are still homeless that have failed multiple times in other environments,” said Nichol Dehmer, one of the partners at YardHomes. “Housing being put forth for these individuals was typically larger properties, smaller units, older properties, with smaller windows, or elevators, all things that become triggers to people that have been in war. There are also a lot of restrictions around pets, comfort animals; most vets have one.”

Making ADUs affordable

YardHomes is a public benefit corporation that emerged out of a conversation between Dehmer and Jamie Stolpestad. They were at a housing conference a few years ago and began brainstorming how to fill a gap in housing across the state. The new company hopes to boost production of ADUs, and for the time being, are specifically building them to house homeless veterans.

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“When Jamie and I thought about the concept of ADUs, we wondered if we could build these in someone’s backyard,” said Dehmer. “We could entice them through our program into a beautiful space, brand new, with access to the outdoors. And with someone looking out for them, some social contract.”

Widespread ADUs have long been a dream in Minnesota, but for most people they’re too expensive — often costing $300,000. For YardHomes, thanks to some manufacturing tweaks, the price point (without land) is only $125,000.

“That’s half the price of one unit in an apartment building,” explained Dehmer. “I feel like this is a movement that can create real change.”

YardHomes’ units come in a few different models, all of them around 500 square feet. They boast the basic amenities: kitchen, bathroom, closets, and space for one or two people.

With its current push for homes for veterans, the company is relying on some complex philanthropy to help fund the land acquisition and home construction. But they will also sell the homes straight-up.

“We’re now in process of raising more money for 2022,” explained Dehmer. “32 properties will be eligible for the program, either owned by nonprofits, individual citizens, or by us. It’s gone gangbusters. We’re still selling ADUs to anyone who wants one, but this [affordable housing] strategy has taken off.”

On November 12, the day after Veterans Day, Dehmer, Stolpestad and a small crowd of philanthropists and bureaucrats cut the ribbon of the first of twelve backyard homes now coming online in Minneapolis. They’ll all house veterans experiencing homeless.

While most current ADUs are on land already owned by nonprofits, the hope was that anyone could volunteer to host a home in their backyard. That’s why Dehmer was excited when Scottie Hall reached out to volunteer their South Minneapolis property.

“Scottie was first person to step up,” said Dehmer.

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Inflexible rules

Scottie Hall’s plan hit a snag. It turns out that the Minneapolis City Code has a nest of regulations about structures in yards. One of them — the maximum combined floor area —  was a problem for the YardHomes proposal. The limit on structures for Hall’s yard is 676 square feet, a number already exceeded by their two garages. While changing one of the garages to an ADU would only add 25 sq. ft. of structured space to the yard, it would still need a variance from the city’s rules.

So far, getting a variance has proved impossible. According to the Minneapolis staff report, Hall’s property did not meet the “practical difficulty” requirement for a variance.

Hall’s appeal before the City Council Business Inspections Housing and Zoning Committee took place last week. Four people testified in support of the variance that would allow the new home, including Dehmer, Hall, and two neighbors.

But the vote was 5-0 to deny the variance with almost no discussion. Council Member Lisa Goodman, who chairs the committee, was adamant about the inflexibility of the practical difficulty rule, insisting that Hall’s property did not meet its narrow grounds.

Scottie Hall shown between the two garages that came with the Phillips neighborhood house.
MinnPost photo by Bill Lindeke
Scottie Hall shown between the two garages that came with the Phillips neighborhood house.
For Hall, it was disappointing.

“YardHomes does not want me to give up yet, but I am not sure what other avenues we have,” they told me after the hearing.

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The impasse raises the question: why does Minneapolis regulate maximum combined floor area for accessory structures in the first place? Given the city’s housing crisis, there must be better uses for staff time. The ballyhoo’d Minneapolis 2040 plan offers clear guidance about the need for new housing of all types and sizes, especially ADUs that can increase density without disturbing existing communities.

Rules like these remaining on the books are the biggest hurdles for the YardHomes effort.

“There’s lot coverage, and all sorts of ratios,” explained Dehmer. “A ratio that looks at the unit compared to the lot, limitations on unit size compared to the existing home. You have to calculate the ratio of all ADUs on the lot, including garages and play houses, and compare that to the lot size. There’s an impervious coverage ratio, for anything not grass, sidewalks, and stuff. It’s very complex to make all these calculations.”

Since ADUs were first pitched in Minneapolis and St. Paul, they’ve been more about theory than practice. There have only been a handful built in either city, hardly enough to make a dent in the overall shortage in housing.

But there’s progress on deregulating this kind of housing. Minneapolis ditched its “owner-occupancy” requirement for ADUs last year, and St. Paul is poised to do the same with a new policy that cleared the city’s Planning Commission last week.

But today, these regulations are stopping needed housing from being built. The full City Council will still vote on Hall’s variance, but with unanimous denial in committee, there’s little chance that the decision will be reversed.

Meanwhile, their dream of helping to end veteran homelessness seems to be fading. Hall’s second garage will still be there. And somewhere, some veteran will be sleeping on the street, exposed at the city’s margins, hoping to make it through another cold Minneapolis winter.