San Diego County Offering Free, Pre-Approved Housing Plans For Granny Flats

Speaker 1: 00:00 The lack of affordable housing in San Diego County seems to be one of those problems that just never goes away. But last week, County supervisor Diane Jacob [inaudible] put forward a program meant to spur the construction of so called granny flats, also known as accessory homes to close that affordable housing gap. Katelyn Bigelow owns a company called maximal space that helps people who are interested in building or converting an existing building into a granny flat. Caitlin joins us via Skype. Caitlin, welcome. Speaker 2: 00:30 Hi, thanks so much for having me. Speaker 1: 00:32 So supervisor Jacob's program boils down to permit ready no cost. Floorplans one 600 square feet to the other 1200 square feet. Uh, Jacob says having permit ready plan shaves $15,000 off. The price of building. Sounds pretty straightforward, but is it Speaker 2: 00:51 well, so I think, okay, this is a really great step that the County is taking and we're seeing a lot more cities across California kind of move in this direction of offering these preapproved plans, but it's not quite as straightforward, I think, as most homeowners assume. So they hear the word free plans and I think, great, there's no design cost at all for these. And that's not quite accurate. So essentially what the County is offering is structural preapproved plans. Um, but you would still need a designer or a drafts person to, uh, draw up the plans with the accessory dwelling unit on your property, for example. So that's your site plan and you would also need to do the title 24 calculations, which is the energy requirement set forth by the state. So there still would be a dramatic cost savings and it's still a great option for homeowners, but it's not like you can walk into the permitting department, grab a plan, and start building the next day. Speaker 1: 01:49 Mmm. And one thing the state is mandating homeowners provide in 2020 with these is energy calculations known as titled 20 fours. That cost is not covered in the counties program. What will that mean for people who want to renovate a, a structure or build a new granny flat? Speaker 2: 02:06 Yeah. So the title 24 is, or the energy calculation that's set by the state. And so we're seeing a big change in the title 24 calculations as a January 1st, 2020, which is going to push all, not just 80 years accessory dwelling units or granny flats, but all new, um, new construction into net zero energy requirements, which is going to mean that I'm essentially people will need to start putting solar on new construction. Speaker 1: 02:36 And you know, the city of San Jose is making a big push to encourage the construction of granny flats, but it hasn't all been smooth sailing. What challenges is San Jose facing? And do you see San Diego facing the same problems? Speaker 2: 02:51 Well, I think, I think that cities have their hearts in the right places. They really want to make a big push and see 80 use as a way to help alleviate the housing crisis. And in that sense that they're correct. But I think part of the problem that cities are facing right now is that we don't have a lot of data right. Or data sometimes as being ignored in the decision making process. So for example, San Jose recently a, actually just this month announced preapproved clans. Um, but they still have, despite kind of this top down, uh, you know, requirement saying, Hey, look, we're trying to get more of these built. We want to make this easier for homeowners. We want to make this more accessible. They still have some rules and regulations in place that are making it really challenging for people. So I'll give you an example. Speaker 2: 03:38 Um, they only allow a two bedroom accessory dwelling unit if it's okay. If you're a lot sizes over 9,000 square feet, which is a very large lot. So that eliminates 83% of the residential lots in San Jose cannot build one of these granny flats and have two bedrooms. So there's some, I think that there's still some missed opportunities that are popping up. And um, so it'll be interesting to see how cities start to adapt some of their regulations and some of their preapproved plans once we have a little bit more data that shows what are the sizes that homeowners are actually building the most. And you know, a lot of homeowners might be thinking about renovating a space into a granny flat or building a new one for the extra income it can provide. How do you help your clients figure out how much money a granny flat can actually bring in? Speaker 2: 04:27 Yeah, so one of the things that we do is we try to make as many data driven decisions for homeowners as possible. So we have a ton of case studies and articles on our website. We have break even calculators. Um, we have just a ton of free tools and information. Um, one of the things that I would recommend if people are exploring this is to look at what a granny flat brings to you in terms of value. So most people think, I think, Oh granny flat passive rental income. I'm going to rent this out and you know, I'm going to earn all of this extra monthly income. But we're actually seeing that the number one reason why people are building these is for aging family members. And so you want to think about, if you're thinking about it from a cashflow perspective, you want to think about, okay, well what are comparable, you know, one bedroom or two bedroom places renting for in my area. Speaker 2: 05:18 And then you can kind of look at like a high end version or look at a low end version and say, okay, well this, this kitchen is a 1980s kitchen. It's not that nice. I'm seeing it on Craigslist, it's renting for you know, $1,100 a month and I know my place will be better. Therefore I, I assume that I can rent higher than this one. On the other side of that, if you're thinking about, you know, building one of these for a family member, you can start looking at, okay, well what do assisted living facilities costs? You know, if an assisted living facility is going to cost $4,000 a month and I don't have the increase in property value from building something new and nice on my property, you know, is this investment makes sense for me. So these are some of the considerations that we help families who are thinking about doing this walk through. Speaker 2: 06:05 And as we mentioned before, the County began waving those permit and development fees earlier this year, the County says, uh, that it'll cut another 15,000 off the price of building a granny flat. How much has that action helped to spur new construction or renovations of existing properties? Yeah, the, the, the, the waiver of development and impact fees has been a huge benefit to homeowners. So we saw city of San Diego way of their development and impact fees last July, uh, County followed along soon after waiving their development and impact fees. These fees, you know, charging $15,000 just for the permit costs. Um, sometimes that can be a deal breaker for families. You know, a lot of people who are doing this are doing it because they have a real need either to help support family or because they're looking for cashflow and having excessive fees of, you know, 15 or $20,000 when you have a relatively tight budget. Speaker 2: 06:59 You know, unfortunately that kills a lot of projects. So we've seen a big increase in applications just since those fees have been waived. And is there anything else you think the County should be doing to encourage the building of granny flat? I think that the waiver of fees is certainly a step in the right direction. Absolutely. I think that streamlining the process and making preapproved plans available to homeowners is also fantastic. I think the next big hurdle for people is just the education. You know, these are complicated projects. Uh, you know, homeowners stand to gain a lot from being able to build one of these things. But at the end of the day, most homeowners have not embarked on a project like this before. And so that's where we're trying to kind of create additional resources for homeowners, you know, education, webinars, outreach, those kinds of things. I've been speaking with Caitlyn Bigelow, owner of maximal space. Caitlin, thanks so much. Absolutely. Thank you.