I helped a friend last week as he was organizing his move from a one bedroom garden level apartment to a larger home. For the last decade he’s been gradually moving up the ladder from fresh-out-of-university to serious adult. Over lunch he introduced me to a new term as it related to my recent experience drilling a new water well. Yak shaving. My ears perked up. Oooooo. I love a good euphemism.
He explained the reference. It goes back to a computer science professor at MIT. You need to accomplish X. But before you can do X you first must do Y. But as you start doing Y it becomes clear that first you need to do Z. You don’t want to do Z, but after looking at the situation from every possible angle you come to the conclusion that you really don’t have a choice. Reluctantly you begin to do Z. But then you realize that in order to do Z you’ll first need to do A, B, and C. And so it goes. Pretty soon you find yourself shaving a metaphorical yak – and it’s a very hairy beast.
This got me on to the housing market here in San Francisco. The entire city is one huge construction site. Every parking lot, aging gas station, defunct car wash, and dilapidated warehouse is being pressed in to service as a two hundred unit apartment or condo complex. The city is only seven miles wide and seven miles long. It’s surrounded on three sides by water and the fourth side is a mountain. There are no virgin tracts to build on. So if there are going to be more housing units in the city there’s only one way to go. Up.
But all of these projects involve a giant herd of yaks that each have to be shaved first. On average it takes ten years to get a building permit in San Francisco. Part of the torturous negotiations involves set-asides for workforce housing, affordable housing, and low income housing. There are endless environmental reviews. Site remediation. Then the developer has to go to court over multiple lawsuits brought by everyone and anyone who doesn’t like some aspect of the project. Then specialized public relations liaisons have to be deployed to communicate with the surrounding community. It’s all yak shaving all the time for ten or fifteen years.
This does nothing but add to the cost of each finished market rate unit. Under the best of circumstances construction is a lagging indicator of market demand. But the boom and bust cycle with these projects is likely to be even more pronounced as a hot market inevitably cools. Regardless of the current situation everything has a beginning, middle, and end. Sooner or later this bubble will pop – and not necessarily in a manner that anyone can predict.
That takes me back to my friend’s soon-to-be vacant apartment. It was a renovated lower level in a single family home. In order to minimize the yak shaving it was never referred to as a second unit. Instead it was merely a minimally cleaned up bit of existing space at the back of the garage facing the garden.
There’s still a set of stairs connecting the two levels of the house. There’s a shared washer and dryer in a little utility room that serves as a kind of privacy airlock. There are locks on various doors, yet multiple means of emergency egress. The lower level has its own bath. There’s a propane grill on the patio. And the lower level can be accessed from the street along the side garden via French doors.
But the thing that makes the space work is actually the absence of one item – a stove. The existence of a stove would transform the place into either an illegal rental unit, or a legal unit burdened with all manner of unpleasant constraints and additional institutional costs. No sane homeowner would voluntarily make that choice. On the renovation plans, the permits, and during inspections the little sink downstairs is referred to as part of the “craft room.” Of course, there’s no law against having a refrigerator in your downstairs rumpus room or plugging in a microwave, or having a portable induction cooktop.
And that takes me to another friend who is currently renovating her home. As part of the interior overhaul she’s taking the existing space at the back of the garage and finishing it to a proper standard – careful to stay within the bounds of the original footprint of the structure. This is absolutely not an addition. No sir. It’s just a little insulation, some updated pipes and wires, drywall, and some nice patio doors to the garden. I looked at the official blueprints. There’s an internal stairway with a laundry room chamber dividing the upstairs from the downstairs and the garage in front from the rooms in back. There’s a full bath and what is labeled a… “craft room.”