Partnership for ADU Development (PAD) Partner

To support homeowners for whom the complexity of development, high cost of construction, and difficulty obtaining financing are substantial barriers, OPCD is seeking to pilot PAD, a co-development model that provides low- and moderate-income homeowners with the ongoing guidance, technical assistance, and financial support they need to create infill housing on their property. In the PAD model, a homeowner would establish a relationship with a trusted nonprofit Partner who develops two homes in their backyard with funding the Partner secures through a combination of public, philanthropic, and conventional sources. The homeowner retains full ownership of their entire property, while the Partner owns and operates the backyard homes for roughly 10 years before being bought out by the homeowner. Through PAD, a homeowner otherwise excluded from the development opportunities conferred by updated zoning is able to catalyze middle housing production, create workforce rental units, and achieve greater financial stability. The role of the PAD Partner includes: Guiding the homeowner through visioning and pre-development Helping the homeowner split their lot and entering into a ground lease for the backyard Working with the homeowner to select from a menu of two-unit design options Carrying out permitting Obtaining construction financing and funding from public and philanthropic sources to complete the capital stack Constructing two backyard homes that the Partner owns Operating and managing the two backyard homes as rental housing for tenants with incomes up to 80 percent of area median income (AMI) Using rental income to provide the homeowner with a monthly ground lease payment Covering project expenses, including maintenance, property taxes, and debt service until the homeowner buys them out