California is facing a severe housing shortage. One solution is to encourage greater housing density, but such a strategy often generates heated exchanges between neighbors, especially among those who hold sharply differing viewpoints. As of the beginning of this year, a new California law went into effect that will now allow small second residential units on single-family lots. The goal is not only to create more housing but also more affordable housing.
What is the framework for these new accessory dwelling units (ADUs), as they are being called? They will be allowed to have full kitchens and bathrooms, can be attached or separated from the main house or even carved out of space inside the principal residence, and can be up to 1,200 square feet in size. These ADUs will not be required to have a utility hookup separate from that of the main house. They can be rented, and most likely will be, but cannot be sold separately from the main dwelling. It is anticipated that these additional units will draw more students, elderly, disabled, and even health-care providers to live in single-family residential neighborhoods.
Height limits, lot coverage, and zoning setbacks will still apply. However, an existing garage within the setback can be incorporated as new living space in an ADU without having to comply with the setback requirement. For each new bedroom that is built outside the existing dwelling footprint, one additional parking space needs to be provided. This extra parking can be in tandem on an existing driveway or provided by mechanical automobile parking lifts.
There are some interesting exceptions to this relatively easy additional parking requirement: It will be waived if the added dwelling/bedroom is (1) within a half mile of public transit, (2) located in a historic district, (3) created within the footprint of the existing residence, or (4) has a car-share parking pod within a block of the AUD (a good reason to encourage car sharing).
This new law is written in such a way that area jurisdictions and planning departments cannot impose restrictions to prohibit or make more difficult the permitting of ADUs. The one exception to this is that ADUs are not yet permitted in the Coastal Zone, the swath of land from the water’s edge to 1,000 yards inland. In some places in the City of Santa Barbara, the distance is as little as 500 yards.
Editor’s Note: After this article was written, the Coastal Commission sent memos to local governments to give “advice and guidance about how to harmonize the new law with Local Coastal Programs,” wrote Noaki Schwartz, spokesperson for the Coastal Commission. “While the new law makes it significantly easier for homeowners to convert or construct ADUs, they must still comply with the Coastal Act,” she wrote in an email. “This is why we encourage local governments to amend their LCPs to reflect the new policy.”
9 Great Things About Granny Flats
They might not seem like the most glamorous of property extensions, but granny flats are becoming increasingly popular among renters, homeowners and investors.
Here are five reasons why you might want to consider investing in one!
Whether you’re adding to your own home or to an investment property, I have two exciting words for you:
Ok, maybe not that exciting. But these unassuming little abodes are growing in popularity among savvy property owners and investors.
If you’re like most people and haven’t given much thought to building or converting an area into a granny flat, here are five great things about them that might get you thinking.
Extra rental income
First and foremost, the biggest plus-point for granny flats is the additional rental income they generate. A large backyard can be a great investment opportunity. With the rental market at capacity, there are many people looking for affordable rental properties. Depending on the layout of your block, building a backyard bungalow to rent out may be a smart decision. For a relatively low cost, you can be receiving a regular income from previously unused space. It’s the easiest way to get into the investment market and take a short-cut to financial freedom. Best still, you have the added convenience of earning income from your backyard.
Granny flats in inner Brisbane can fetch anywhere from $300 to over $600 per week – they commonly achieve over 15% rental yield.
These extra rental dollars will go a long way to helping you achieve some positive returns, and for a much lower initial investment than a standalone property… which leads me to the next point:
Inexpensive to build
“Expensive” and “inexpensive” are relative terms, but if you consider that the average granny flat only requires about $100,000 borrowed, it’s nowhere near the amount you’d need to buy a full property.
Because granny flats legally need to be built next to or attached to an existing property, they usually share all service connections (i.e. mains water, electricity and drainage). Plus, if they’re built in a garage or under the house, there’s virtually zero structural work to be done.
Added value at sale time
This is especially true when you’re simply renovating an under-house area or garage extension.
Even if you’re building a granny flat at the end of the garden, as long as you’re abiding by the council’s zoning and planning laws, you’re more or less good to go.
Remember to check before starting though – you don’t want to get halfway through and then realise you’re going against regulations.
An ideal Home Office
Working from home has many benefits: flexible environment, more time with the kids, financial benefits, no commute… It also comes with some problems: no distinction between home time and work time, constant interruptions, not enough dedicated space. A Granny Flat with one or two bedrooms easily become one or two offices, a staff kitchen area, and a welcoming space for clients to visit are some of the features a Granny Flat provides.
Kids have left school but not quite ready to leave home?
The high cost of living has made it very difficult for young adults and University students to take that first step towards independence. A Granny Flat provides the answer. A separate space for them to live in will give your students the freedom and independence they would like while cutting down the costs of living away from home.
Regular visitors and a guest room isn’t enough?
With families spread out all over the globe, regular (and sometimes long term) visitors are a familiar experience for many of us. While a guest room may do the trick, imagine being able to provide your visitors with a spacious, private guest retreat. With room to spread out, their own bathroom, kitchen and living space, it gives everyone that extra space to enjoy the stay while not getting in each other’s hair
Worried about your income in retirement, a Granny Flat may be the solution as an affordable way to add value to your home and safely invest in a rental property. Put simply, it’s the accessible and practical way to maximise the value on your home, by making use of the asset you already have – your backyard. Saved from any risks or hassles of buying new property, a granny flat creates an easy way for everyday families to enter the property investment market. Not only will you be benefiting from an affordable accommodation solution and opportunity for rental income; but you will increase the value of your home.
As further proof of a safe investment, the government has projected single-person households as the fastest growing area over the next 20 years. With the addition of a granny flat, you can reap the benefits of starting with a positively geared investment, removing any fear from taking the leap into property investments. A granny flat can provide home owners with their own rental property, without putting them in substantial debt, all within the ease and comfort of their own backyard.
A few hundred dollars a week may make a huge difference in your retirement plans
Can also be used for grannies!
Oh, I almost forgot! The granny flat can also be used for grannies! Or kids, or in-laws, or other relatives… you get the idea.
If you decide to keep it in the family instead of renting it out to an outside tenant, your granny flat could save you quite a lot of money in the long term
Having relatives staying in the granny flat means they don’t have to pay rent elsewhere or maintain a larger property they own.
It also means you can have your loved ones just a flight of stairs or garden stroll away: a perfect mix of privacy and proximity, especially if they need caring for.