After a lengthy, hotly-contested debate, the Bend, Oregon City Council voted to ease rules restricting accessory dwelling units (ADUs) in single-family residential neighborhoods last week, joining a number of cities including Austin, Texas and Portland, Oregon in allowing homeowners to rent out extra spaces on their property. Proponents hope the so-called “granny flats” — which include small backyard cottages, apartments atop garages and the like — will increase affordable housing stock while generating supplemental income for homeowners. Detractors — of which there are many in Bend — worry about the negative impacts of increased density in single-family, residential areas.

Both sides could learn from the recent flop of Encinitas, California’s plan to legalize ADUs, outlined in an article on Voice of San Diego Wednesday.

The program was intended to kill two birds with one stone: help the city meet affordable housing needs by encouraging homeowners to turn illegal accessory dwellings into legal homes reserved for low-income renters. To participate in the program, owners would be required to cap rents at an affordable rate for 20 years, after which they’d be permitted to rent at market prices.

Fixing up and permitting such dwellings can be expensive for potential landlords, so Encinitas waived the $900 application fee to participate in the low-income housing program. But the upgrades still proved too costly for many, and the incentive too low. According to a city report released in December, many people chose not to participate because investments to bring the property up to safety codes would not be earned back due to the rent restriction.

After a year, only six low-income units applied through the program, and only one has been approved as of Monday. The rest remain illegal. Voice of San Diego notes that removing the rent restrictions would result in more units that don’t technically factor into Encinitas’ affordable housing stock, but that would still create less expensive homes than typical for the area — a position supported by a recent report on market-rate housing decreasing displacement in California.

However, others point the finger at the “onerous requirements” and “red tape” residents have to deal with to get their apartments up to code, and say the city just needs to simplify the process to incentivize people to rent out their ADUs instead of using them as vacation rentals.

Encinitas extended its program for another six months, and is crafting a new policy to build participation.