Accessory Dwelling Units (ADUs) are one way to make housing affordable in cities where citizens are increasingly feeling the pinch of high prices and shortage of dwellings. Charleston, S.C., has passed a new ordinance permitting homeowners to construct backyard cottages and garage apartments that can be leased out or used to house friends and family for free. The path to affordable housing is strewn with many hurdles, including zoning laws, high construction costs and political pressures. Providing finance for construction from local funds cannot achieve the scales required, and existing financial institutions need to design flexible tools to convert construction loans to mortgage products. Homeowners in Charleston can take heart from the fact that their local government is trying to replicate successful models like Los Angeles’ Backyard Homes Project.

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