Granola Shotgun

Crisis. Opportunity. Ambivalence.

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I got an e-mail from an architect friend yesterday and I need to make a big decision. It’s not one I’m taking lightly. He let me know that in the wake of the recent fires that destroyed thousands of properties all across the county officials were temporarily suspending a lot of the rules and fees associated with new construction. Middle class homeowners are now effectively homeless until things can be rebuilt and a domino effect is rippling across the entire region. These new emergency procedures are on top of changes enacted by the state this year that now make new construction easier and potentially less expensive. It might be a good time to move forward with a project I had been considering.
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I had hired the architect last year to explore the possibility of building an Accessory Dwelling Unit on a property I own. The existing house is only 700 square feet and there’s a half acre of land. We brainstormed all sorts of options like converting the garage to a studio apartment or putting up a little 300 or 400 square foot granny cottage in the back garden. It seemed like a reasonable way for me to create much needed affordable housing for people I know in the community as well as generate some income that would support my retirement years.
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After he sat me down and explained the entitlement process I decided not to proceed. The local authorities had established a set of restrictions, fees, and a long list of requirements that would have made such a project cost $200,000. Very little of the cost of an ADU had anything at all to do with labor or materials for the actual structure I wanted. And I had only paid $245,000 for the entire property a few years earlier. I would have had to take out a substantial construction loan and then charge an exorbitant rent to service the debt. The rental income would have gone straight to a mortgage payment and the county in the form of higher property taxes. It just didn’t make any financial sense.
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I’m aware of the larger cultural dynamics here. People like me are assumed to be profit maximizing absentee slum lords. The rules are intended to protect respectable home owners from my kind of evil. And the authorities are desperate for additional revenue to plug the cavernous funding gap needed to provide municipal services. My response? No problem. I’ll save everyone the fuss and bother.
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Instead I built what was legal without the need for permits, inspections, impact fees, and the righteous indignation of outraged neighbors. I spent $9,000 cash and built a little 120 square foot cedar shed that now serves as a home office and occasional guest cottage. No plumbing. No electricity. No nothing. It’s not a rental unit. It’s just a pleasant extra space in the garden that’s nice to have. But you can see that with the addition of a small bath and a kitchenette this could have been a pretty sweet spot.
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After the shed was finished I installed a shade structure parallel to the back of the house. If I had attached an overhead wooden structure to the house a whole long list of special building codes would have kicked in requiring permits and inspections. So I built a freestanding arbor within the legal height restrictions and hung seasonal shade sails over the back patio instead.
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For $5,600 I just installed a new back deck which is less than 30 inches off the ground so there was no need for a permit. The deck effectively doubled the usable space of the house in a part of the country with a mild year round climate. No debt. No violations. Simple. Highly effective. But it’s not additional housing.
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The architect has gone over the new options and has determined that it’s now legal – even encouraged – to convert the existing garage into a studio apartment and create a legitimate duplex. The storage space lost could easily be replaced with a shed in the back garden. The garage can be fitted with an independent bath and kitchen. Additional windows, a high ceiling, lots of insulation, and good quality fixtures and finishes would make for a comfortable and attractive space. A stacked washer/dryer can be installed in a closet in the main portion of the house so each unit would have its own laundry. I could afford to pay cash for this kind of retrofit now that the rules and fees have changed. But do I want to?
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Before the fires the county offices were at least six months behind on processing permit requests. Now 7,000+ homes are all going to have to be rebuilt en masse. In spite of the difficulty of getting permission to build much of anything new the tsunami of money washing over coastal California in recent years has induced a remodeling and expansion boom. Even before the fires qualified contractors all had two year waiting lists. And of course builders cherry pick the largest most lucrative projects and pass on the smaller low value stuff. Do I really want to engage in that process?
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Instead, I could just insulate the garage, replace the existing doors and windows, and put up drywall. Paint, some comfortable furniture, and an area rug would transform it into a rumpus room, home office, guest room… kinda like the cedar shed. It would still be a garage – just a prettier one. The money required to transform the garage into a proper legal apartment is enough for a hefty downpayment on an entirely different property elsewhere. Geographic diversification seems in order given the ridiculously high cost and lack of inventory in California, not to mention the ongoing risk of massive fires and earthquakes. At the end of the day I’m an 80% guy. 100% is hard. 100% is expensive. 100% requires serious effort. 100% involves endless bureaucracies – even when they promise to make nice. 80% is simple, easy, and plenty good enough. We’ll see…