San Diego Homeowners Prepare To Build Granny Flats After Council Cuts Fees
June 14, 2018 1:42 p.m.
Caitlin Bigelow, founder, Maxable Space
>>San Diego has an affordable housing issue. Average rents have increased by 20% in the past three years. There are fewer vacancies now than ever. Last month a San Diego city Council took a step to encourage construction of new homes. They are called companion units but also known as granny flats. They are built in the backyards of existing homes. KPBS clear tragus or has more.
>> The front door is positioned here and the walkway is there.
>> Reporter: Kate has big plans for the backyard at her Northpark home.
>> There will be a stove, refrigerator, sink, a little counter along here.
>> Reporter: She is planning to build a granny flat for someone else to live in. She got the idea when she heard from a friend who needs a place to live and cannot afford the high rents in San Diego.
>> I started to think of an old dream of mine. We have an attic upstairs. I really wanted to make a whole full second floor put an apartment up there. I thought it would be cool. We'll --
>> Reporter: Way: until she heard the price tag more than $300,000.
>> And then I started thinking what if we could we any chance of building something in the backyard.
>> Reporter: She found out holding a granny thought -- flat would have a half of the price tag of a maximum of $150,000. She has owned her home for more than 30 years so she can refinance it. She had an architect draw up plans and was ready to get permits from the city.
>> They are ready to grant it. However, if we wait two weeks more, we could save, Darrell says $9000, somewhere around there because the city Council just voted to waive the environmental impact fees.
>> Reporter: Last month a San Diego city Council voted to slash some of the fees for building granny flats. The savings range from $8000 to more than $30,000 depending on several fact is including what part of the city the flat will be built and whether it is new or existing construction.
>> Right here, this is being dug out as a basement accessory dwelling unit.
>> Reporter: Caitlin Bigelow is checking in on a construction project at a home north of Balboa Park. She runs a company called maximum space that connects homeowners from across the state with information about building granny flats. She says San Diego is behind the curve in this type of construction.
>> People were balking at these price tags and sing we cannot afford to build this. The city just wait the development and impact fees so we are seeing an uptick in owners who were interested in this project but it was cost prohibitive up until this point.
>> Reporter: She says she does not expect every homeowner in San Diego will build an apartment in the backyard.
>> This will not be something that appeals to the masses. Americans like their privacy in their yard. But for some savvy homeowners who are looking for a way to invest in property, this is a smart sensitive thing to do.
>> Reporter: Even with reduced fees not everyone can afford construction .
>> I was thinking about building a casino because I have this large backyard, and I care about the fact that we have a affordable housing crisis.
>> Reporter: Nicole wanted to build a small apartment at her Kensington home. The six-figure price tag was too high. She was not ready to refinance and take out a loan.
>> In the short term and felt overwhelming. I postponed those plans. Perhaps one day I will be in a position where I feel more comfortable moving forward. At this point, the costs are too high. It is unfortunate because I'm sure a lot of people are similarly situated to me.
>> Reporter: Homeowner Kate is ready to get the construction going on her granny flat. The only thing she is slightly sad about is the loss of the space for her backyard.
>> I planned a ban that scope and to have a concert out there. I actually got married back there.
>> Reporter: She is saving a portion of her yard.
>>> We have with us now Caitlin Bigelow who runs the company maximum space. She works with homeowners and 70 -- several cities are questions about granny thoughts. You said in the future -- feature that San Diego is behind the curve for companion units compared to who?
>> Compared to other big metropolitan cities in California. The Bay Area has seen a lot of development in granny flats and Los Angeles as well. San Diego is behind because of the fees that were associated that were recently waived. San Diego is no longer charging development and impacting fees. That could save homeowners $12-$30,000 on their project.
>>> Homeowners -- cities are starting to it adopt these policies. Which city will make it the easiest ?
>> San Diego, San Diego County, Solana Beach, Encinitas, if you are living in one of the cities, it is especially easy.
>>> Some are bigger granny flat and others right?
>> The state-mandated you can build an accessory dwelling unit or granny flat up to 1200 square feet. Some local ordinances have put in additional restrictions on top that overwrites what the stop has met -- state has mandated. The maximum you can build in Carlsbad is 640 square feet, Delmar 550 square feet, El Cajon 10% of the lot size.
>>> What are the questions a homeowner should ask when they think about whether not to build a granny flat in their backyard?
>> The biggest question is the financial piece of it. People assume this is a tiny house and it won't be very expensive. The development of these typically will be a six-figure investment. It is a sizable amount of money to build one. Just making sure the numbers make sense to you but with property values at a all-time high, homeowners are looking to invest and maximize their property so it could be a savvy investment if you can afford the upfront costs. Homeowners are seeing huge benefits financially by renting things out or having elderly family stay in them. A lot of my clients are either aging and what downsizing opportunities, it is nice because it is a flexible space for people.
>>> Do people have options other than building in the backyard ? can they build up or down in the basement?
>> Yes you can have a standing alone unit in the backyard, convert your garage, convert part of your existing home, how you define a granny flat is it has its own separate entrance, a kitchen that has a stove and a sink, it has to have a bathroom and living space.
>>> You write on your website that if only 10% of homeowners built an extensive -- additional living unit we would not have any burden to the state. Are most people offering them as affordable housing or more to relatives ?
>> I think it is 50-50. The motivators for people building these. Half of them building these are interested in rental income. The other half are interested in housing family members. Again, we see the use of these change over time. Young families who are maybe more cash strapped are looking for the rental income. But as parents get older or their kids get older and are graduating college, they are seeing that there could be other uses for the space.
>>> On your website there are examples are different architectural approaches to it. Are there important tips that you would have for people that they need to bear in mind when starting to plan a granny flat ?
>> my recommendation is to do research ahead of time. This is a new niche for the market. The California legislation passed in 2017. There are certain firms in San Diego and the state that are specialized in this and pioneering back. I recommend working with the firm that knows what they are doing and has a grasp on the regulations.
>> And if someone decides yes in spite of the loss -- cost and the loss of privacy what is the first step? Spin the first step is to research zoning. It has to be on a single-family lot. Research and see if an ordinance has been passed in your local jurisdiction. San Diego has passed around ordinance that overwrites what the state mandates. You want to make sure that just because a friend of yours five minutes away did something might not mean you could do the same thing.
>>> This is a new opportunity for people. The people you have spoken with who have already done it what is their feedback you're getting. Are they glad they did it do they have regrets?
>> The homeowners I've worked with who finish their projects are thrilled. Had no problems raining. A number of homeowners I spoke to felt like they could get higher rental prices than what they were asking for. They thought it was worth it for them to have a renter they liked. Overall people are very happy with the results.
>> This looks like a exciting way to get a start of the market. That was Caitlin Bigelow of the company maxable space.