How Single Family Housing is Changing
While many may have thought HGTV’s Tiny House Hunters show was an entertaining anomaly in the landscape of homeownership trends, it turns out it was just the early signs of increasing demands for smaller living from a new generation of homeowners. For one thing, millennials and generation X’ers can’t afford the big single family home that baby boomers dreamed about. For another thing, they don’t want it. We want to be mobile which means owning fewer and smaller things. We also want to live in more walkable and likable locations, where by necessity housing is more compact and dense. (If you want to walk or bike somewhere destinations have to be closer together.) Developers began responding to this market demand well before regulators, as it allows for more land use efficiency and therefore more profitability.
Despite the market demand for smaller housing units and the severe housing shortage in urban areas within California, many cities and counties have not updated their zoning ordinances to allow for more density. To their credit, many cities have tried, but have succumbed to the pressures of well-funded community groups who fear that increased density means a loss of character and property value in their neighborhoods. The conversation around density has been a stalemate, in part, because it’s been pitted as a choice between suburban or urban. People feel they have to choose between either single family homes or density. But as it turns out we have more choices than that. There’s a middle ground.
Sometimes referred to as the “missing middle” housing, many cities across the nation are turning their attention towards allowing duplexes, triplexes, and quadplexes in traditional single-family neighborhoods. Often the housing is designed to look and feel like a single-family house so that it seamlessly blends into the surrounding neighborhood. The result is that the neighborhood character is maintained and not only do property values increase, but homeowners can capitalize on their investments. This new type of housing has the potential to be the new retirement plan for California homeowners at a time when the stock market is proving itself to be a risky option.
“This new type of housing has the potential to be the new retirement plan for California homeowners at a time when the stock market is proving itself to be a risky option.”
New laws are making this possible.
Last year the state of California passed a number of laws making accessory dwelling units (ADUs) easier to build than ever before by requiring cities to allow ADUs on residential properties and eliminating a number of methods typically used by cities to restrict ADUs such as lot coverage, setbacks, height, and parking restrictions. This summer the state is considering a number of additional laws that would require cities to allow for more housing. SB 1120 would require cities to allow duplexes on properties zoned for single family residential. AB 3040 provides incentives for cities to upzone single family residential to allow for four units. And SB 1385 would allow for the development of office and retail properties into housing. These types of reforms are a huge departure from the way planning has been done in the past. Governor Newsom is effectively taking the reigns out of local hand as cities and counties have been too slow to facilitate housing construction. With the news in January that California’s population is now officially declining combined with the impact of COVID-19 on our economy, there’s going to be continued pressure on the legislature to pass new laws that facilitate housing construction.
So what does that mean for you? If you are contractor or builder start preparing yourself for marketing to the existing homeowners to turn their property into a source of income. Already, this can be done by adding a junior ADU and/or ADU to a residential property. With our help you can do this at a scale that’s practical, affordable, and sustainable to the average homeowner. We won’t overdesign your project, or make you wait months for a design.
If you are an investor, start looking at single family property investments, but keep your eye on these laws before pulling the trigger if you want something that’s a more sure-fire investment. We can help by keeping you informed of the current status of the laws and when it is time to design your project we can help you navigate the local code. If you own small to mid-size lots and need help figuring out your building envelope and constraints, we can help you.
Update
Since this post was written major wildfires in California broke out and the legislature could not reach agreement with various lobbyists on both sides of the housing issue. The new laws being considered did not make it through the legislature in time to be considered by the Governor. However, many people do not consider them a lost cause. We will stay tuned to see what emerges next year.
If you want to stay in touch subscribe to our newsletter below or if you have questions about how to build an ADU on your property under the laws passed last year give us a call or email us.