New Jersey faces two big challenges: a shortage of affordable homes and rising health care costs. People with intellectual and developmental disabilities find themselves at the intersection of these challenges and the impact of this dual crisis on a group of vulnerable residents requires urgent action.
Accessory dwelling units can provide the solution that people with IDD and their families need. However, zoning codes in most New Jersey municipalities restrict these types of homes from being built, limiting the ability to increase our housing supply and address healthcare costs.
ADUs are small, independent living units added to an existing property to accommodate additional residents through the conversion of a detached or attached garage, attic, or basement; or by constructing a tiny house in a side or backyard. The cost of creating such a unit is significantly lower than building a new home. Constructing an ADU in New Jersey costs on average $200,000, but simpler conversions start from $50,000.
ADUs provide an alternative to group homes and supervised apartments and afford a person with IDD the opportunity to live independently, within the vicinity of family. Staying in an existing neighborhood has also shown to alleviate the stress and anxiety for both the family and the person with IDD associated with relocation.
A goal of a research project started recently at Monmouth University aims to quantify the economic impact of ADUs for persons with IDD by collecting public data, conducting interviews, and generating information from surveys. However, preliminary research highlights five economic and societal advantages.
First, housing is a social determinant of health that significantly impacts one’s well-being and quality of life. A cross-sectional study of nearly 15,000 adults found that individual-level social determinants of health were significantly associated with healthcare expenditures by Medicare, Medicaid, and private insurers. ADUs lead to better living conditions and can prevent social isolation, which in turn lead to better health outcomes and lower expenditures.
Second, ADUs can lead to savings on public healthcare costs since family members are available to provide supports. Care in group homes and other supportive housing has become very expensive due to surging property prices and personnel costs, most funded through Medicaid and state funds. Family caregivers reduce this burden. A recent estimate from AARP highlights that in New Jersey, 1.76 million families and caregivers spend 1.2 billion hours of care. At an estimated $23.68 per hour, this amounts to approximately $28 billion for a year of work.
Third, ADUs provide a long-term solution for housing stability for a vulnerable group of residents who often outlive their parents. There is a substantial risk that persons with IDD end up homeless, in prison or in nursing homes, with substantially higher costs for society. An ADU provides continuity, as the person with IDD can stay at the property even after their parents pass. If the main property is then rented out, they can generate sufficient income to pay for medical and administrative support (e.g. maintenance of property, collecting rent, paying taxes). Thus, the ADU addresses intergenerational transfer.
Fourth, ADUs are not a burden on public finances and partially resolve New Jersey’s housing affordability crisis. They do not require public funds for investments — not in the construction, nor in the infrastructure. ADUs fit well within the policy priorities identified by Governor Sherrill, by adding incremental density to an existing property and taking advantage of existing infrastructure. And for every person with IDD who can move into an ADU, another spot on an affordable housing wait list or another unit of supportive housing opens up, underscoring the greater positive effect that ADUs have on society.
Finally, the construction and maintenance of ADUs would generate economic activity and stable job opportunities for New Jersey residents.
Despite these positive economic and societal benefits, ADUs are not permitted in most municipalities. Legalization of ADU construction at the state level will make it easier and faster for families to get permission and obtain bank loans or alternative funding to construct these units. State-level legislation would also provide developers and architects with predictability and allow them to work with uniform standards.
By passing ADU legislation, New Jersey can simultaneously address the affordability crisis and the surge in healthcare costs for people with IDD — a group whose needs have been overlooked for too long.
Tjeerd Boonman is a McMullen Family Professor of Economics at Monmouth University.
