Maybe a family member is staying with you for awhile, and you’re tired of cramming everyone into your small kitchen. Or, due to COVID-19 you are working from home and ready to start your plans of building a master suite for yourself. Whatever reason you have for planning a home addition, the end idea is to achieve more space. Where do you start when thinking about building an addition? The basics include; having a budget, compiling ideas, and planning the actual building process.
The early stages of home additions begin from the starting point of having a proper foundation. These and other plan contingencies will influence the design and project at large. As a homeowner, considering a home addition, you should conservsider making a list. A list will get the want, need, costs, design, and additional plans for your space together. A list helps you prioritize your goals while fostering effective communication between you and the designers, architects, or contractors. In addition to planning, you want to;
1.Identify your objectives
First, carefully consider why you want an addition, a room or a new space—knowing the project’s objective guides the planning. You’ll likely want more living space, but you may be surprised that addition is not always the only option. Alternatively, you might be seeking more access to indoor and outdoor activities. Ultimately, knowing what problem to solve helps fine-tune your objectives. Here some examples of things to consider;
Needs and Wants
For people remodeling or building additions, wishes and realities are an important factor, which sometimes carry a large gap. When you create a list of needs and wants it will guide your decision making.
2.Create a pictorial representation of your addition plans
Allow yourself some dream time to put your space into focus. Before you hire an expert, you may consider checking homeowners’ designs online. Furthermore, create a scrapbook with related pictures or plans from design magazines. Remodeling ideas and related home improvement elements could help too.
3.Check out some trending, geo-specific designs.
Check out trendy items that could serve as savvy additions to your home improvement plan. This is important as you want to find ideas that will adhere to your local ordinance while having building codes for realistic weather conditions. These could include open concepts in the kitchen; a media fitted guest bedroom, paint-inclusive interior, and more. When deciding on these new designs, it’s smart to also understand basics costs as they can greatly differ.
4.Calculate the cost
Remember that when making a list, adding the cost(s) is necessary. Therefore, determine how much you need to cover the costs. Majority of the time, the cost of home additions is less than what you have saved up. Hence leaving you the option of a home improvement loan and other related financing options. In a bid with a contractor, remember you shouldn’t opt for any do-it-yourself items. Legitimate contractors have a high insurance expenses and hold liability so they expect to see the entire job through and not subcontract out any portion that they are liable for. Design options typically are the best budget saving opportunities over labor or trying to micro-manage aspects of the project from the general contractor.
3.Check out the building site.
It is vital to take a good look at where you plan to build your addition. First, the building site should be at a desirable location. You should consider the exterior views and potential landscape design. While considering this, check existing structures that you could remove, like utility poles, water tanks, etc. For most additions, homeowners choose to build if the city ordinances allow this. Homeowners who choose to build up to preserve their outdoor space or retain privacy often are satisfied with the end result.Pop-outs and second story additions are great choices, it really just comes down to budget and layout of property.
In closely built neighborhoods, where the houses are under an HOA association, a home addition sometimes needs HOA approval to carry the same exterior or design.
5.Hire a local, vetted professional
From contractors to architects and engineers it’s vital to employ the services of experts in your area. The types of people you have on your project ultimately determine the scope and result. Consulting with experts makes your addition a long term investment vs a money pit. Regardless of how small your addition is or how much work you intend to add you still need an experienced designer, someone to help with the floor, etc. In today’s world a lot of homeowners approach us with sketches and drafts they found online, but unfortunately, these are not legally acceptable, hence the need for an architect and engineer.
Subsequently, a bigger and more extensive addition project requires bigger plans. Although an architect can cover the overall designs, a contractor needs to supervise. Alternatively, you could consider building firms or design contractors with a complete package of services needed – construction, project management, designs, planning, and more. The costs of general services vary from professional to professional. Some people charge for daily work while others bill you for the overall work.
5.Put it in black and white.
A reputable professional like a designer, contractor, or architect works according to the terms of an agreement. Therefore, a legal document that explains the project in detail should be drafted. Usually, contracts consist of a written document, a list of materials, and the building’s blueprints or space. When the document is signed, the people involved agree to the terms and are legally obligated to fulfill the requirements. The ideas binding a contract could sometimes vary, but the basis is almost always the same. Therefore, it is not uncommon to find- a work schedule, a payment schedule, statements of coverage for theft or injuries, clauses for what the builder may or may not be responsible for in the document.
6.Staying on budget.
Above is a granny flat we built in La Mesa, CA.
So you’re interested in building a granny flat. Maybe it’s the perfect accommodation for your nanny or other members of your family or maybe you are the caretaker for an aging family member. No matter the reason you find yourself needing a granny flat, you need to make sure you have the proper knowledge of what a granny flat actually is, city regulations, how much building one would actually cost and how a granny flat can benefit you.
To put it in the simplest of terms, a granny flat is a miniature version of a full-sized housing unit designed for one or two persons, that is built on an existing property that has all of the components that a house has including its own entrance, bathroom, kitchen, and living area. Some frequently used other terms are in-law apartments, granny pods, mother-in-law units, bonus units or accessory apartments.
An accessory dwelling unit (ADU) is the technical architectural term used by an office or permitting city to describe a secondary unit also known as a granny flat. It is a second complete dwelling that is legally on or within the same property as an existing single-family residence. You will find that some accessory dwelling units are stand-alone homes, while others have been converted from attics, basements, and garages.
In the United States, the ADU guidelines and restrictions vary from state to state. You’ll find that state laws usually delegate the zoning powers and planning to the particular city and county governments which determine the distribution and intensity of land uses in the local jurisdiction and the appropriate type.
While you are able to build granny flats in San Diego, there are certain restrictions and guidelines that are important to take note of before building your granny flat. You can find in the California Government Code Sections 65852.150, 65852.2 & 65852.22, local regulations of ADU’s.
San Diego allows for an ADU to be built on a property that is currently zoned for a single family residence. In some cases ADU’s are permitted to be built on some multi-family lots but it’s always good measure to check with the city before even beginning to build on the land. You also need to go about obtaining a permit in order to build on a lot and in order for you to obtain a permit the lot must be free of any code violations. Some additional facts to take into consideration:
There are a few exceptions when it comes to parking spaces. Here are the instances where you do not have to have a parking space for your ADU:
It is required that every granny flat remain a certain distance from a property line, structure within a building or curb. This ensures environmental protection and public safety. Your ADU must adhere to the with the main property’s setback. If you have an ADU that is two-stories, it must be placed five feet from both the side and rear lot lines. The only exception to this guideline is if your granny flat is converted from a garage.
There have been more and more homeowners in San Diego becoming interested in building granny flats for a number of reasons. One of the biggest being the recent increase in the cost of living. According to the Housing Inventory Annual Report, 30 percent of households that make a conservative income cannot afford their rent and the other 70 percent cannot afford to own their home.
Because of San Diego’s housing shortage, the lack of affordable rent and minimal availability, there has been an increase in housing prices with fewer options for home buyers. Building ordinances are now being incentivized to transform residentiary developments which include reduced parking requirements, waived fees for granny flats and housing density bonuses.
Granny flats have the ability to fit directly into your lifestyle while also helping with some of life’s tough challenges.
There are quite a few reasons to consider building a granny flat in 2020. Currently, in San Diego, there is not enough housing to meet demand and whatever is currently available is too expensive for residents. An apartment complex is a big solution but it takes years to build. So cities like San Diego are starting to have much better regulations and are starting to turn to small-scale solutions such as granny flats.
In the past year San Diego has had some pretty positive significant changes with their restrictions towards home owners that are seeking to construct secondary units. Some of these changes include:
Whether you are taking in aging parents, welcoming your college-aged children home for the summer, or housing out-of-town relatives, ADU’s can be extremely helpful in providing a comfortable, separate space for tenants, family, and friends. Also being that your ADU is in close proximity to your home, it is much more affordable and familiar than an Airbnb or hotel.
An additional ADU is great for assisting homeowners with mortgage payments. Due to San Diego requiring for a tenant to occupy an ADU for at least 1 month means that you’ll have a minimum of 1 payment from the occupant that can assist with your mortgage if needed. Granny flats are usually occupied for longer than 30 days at a time.
Working from home can be difficult especially if you have children or other outside distractions. An ADU can be very useful in terms of providing a quiet place to work that’s right next to home.
With rental costs on the uprise in San Diego, granny flats provide an affordable housing option to tenants that wouldn’t otherwise be able to afford housing in specific sectors.
Due to the recent influx of housing prices, it is forcing out low-income residents because of the increased cost of rent and goods. This can ultimately lead to displacement and migration. Granny flats give low-income residents an option to stay in their current neighborhood while still being able to have access to affordable housing.
Residing in a granny flat can allow affordable housing, giving you the ability to save up extra funds in order to buy a home in the future.
One of the biggest advantages of building a granny flat is the short amount of time it takes. It’s not uncommon to see a granny flat completed within 4 months. This is much less time than other tiny homes, where small inconsistent construction crews, weather conditions and equipment back orders cause a delay
Granny flats have a green building system approach that takes these 7 factors into consideration:
There are specific zoning restrictions when it comes to building a granny flat on your property but before you can begin to build an ADU on your property you must first obtain a building permit on the residentially zoned property that has an existing single-family residence. If you qualify, only one ADU is allowed to be built on the property.
The construction of an ADU is NOT permitted if any of the following applies to you:
Despite the objections of city officials throughout the state of California, Gov. Gavin Newsom signed a bill that completely ended single-family zoning. Lawmakers have made it much easier and more accessible for homeowners to build small freestanding homes in their backyards or convert garages into residential spaces.
State policies have made it a straightforward process for property owners to build this type of housing by eliminating local government and homeowners association requirements that had in the past either completely prohibited or greatly slowed down construction time.
The first bill that was signed was, AB68, and it allows homeowners to build up to two ADU’s on their property by right. This means that local governments do not have the prudence to deny these projects or demand any additional conditions besides what’s already listed in the city’s zoning code. This bill restricts parking requirements, setback and size local zoning codes can demand on ADU’s. This bill also shortens the time that local governments have to approve new units from 120 to 60 days.
Despite all of the benefits that have come through the passing of the AB68 bill, there are also some downsides as well, here are a few:
While building a granny flat is less expensive than building a single-family residence, it is still an expensive investment. A recent survey conducted by the UC Berkeley Terner Center for Housing Innovation, ADU owners reported spending, on average, $156,000 to build their granny flat. If you’re converting an existing garage into an ADU, the cost can be significantly less expensive but even then you may still spend around $30,000 or more. Alot of urban areas within california (including San Diego) charge development fees. It is a good practice for homeowners to research the fee structure in their specific area to get an accurate calculation.
The costs of a granny flat can also vary depending on the quality of the unit and its purpose. If you are looking for a custom design, you could be spending anything upwards of $120,000.
When building a granny flat you will soon find out that it costs more per square foot than a single-family home does for the following reasons:
In San Diego, most granny flats are between $220-$350 a square foot. Previously homeowners in San Diego could be paying upwards of $40,000 for just government fees alone, but by a unanimous vote, the city council cut those fees by more than 60%. The purpose of slashing these high fees were to remove the barriers to encourage the construction of new units that residents could actually afford. San Diego’s mayor, Kevin Faulconer has stated that the city will make more changes to assist homeowners in designing and building ADU’s. This is an effort to add at least 2000 new companion units to the city’s housing stock by 2028.
As of mid 2019, San Diego County is now offering free pre-approved floor plans for ADU’s. So far the county has now posted two permit-ready, free floor layouts that are currently sized at 600 and 1,200 square feet, but more plans will be added in the coming months. Along with that, in early 2019, San Diego County waived $15,000 in development and permit fees for the construction of granny flats.
The market for ADU’s in California is still very new and many cities are still attempting to out together their own ADU regulations and ordinances. Because of this, it may be an issue for homeowners to get a traditional loan for their granny flat.
Despite the difficulty of getting a traditional loan, there are still other alternatives to try and pursue in order to get the funding for your granny flat. It is possible to use your home’s equity to assist when applying for a top-up or new loan. Even if you decide to go this route and use your home’s equity, you’ll still have to provide documentation that you make enough income to pay back the loan.
During the application process you may even need to have your home revalued. It is good practice to have your floor plans ready to give the appraiser an accurate sense of how much your ADU will add to your existing property value.
Having a committed tenant can also help with covering maintenance, taxes and loan costs and it can help solidify your projection of revenue and costs. If you are in need of referrals, you should check with the San Diego Housing Federation for access to financing sources that have an interest in supporting the companion unit programs.
A. Yes. ADU’s are treated as a new construction, whether it is a new construction or a remodel.
A. Yes. Once the companion unit is added to the property, the assessed value is set and will be taxed at 1% and limited up to a 2% annual increase based on the CPI.
A. Yes. Homeowners can appeal the value of their property by filing an Assessment Appeal Application. The appeal must be submitted within 60 days after the date the notice of change in assessment is mailed.
A. No. Adding a new construction will not trigger reassessment. If you happened to purchase your home 1990 for $100,000, the taxes on the land and your overall home would remain static and be based on that base year value.
The process of getting your granny flat approved usually takes anywhere from eight through ten weeks. The more strict the state, the longer it’ll take to be approved. In more strict states it can take up to 1 year to get an approval for an ADU.
When homeowners are exploring the options of building an ADU, it’s only natural to think about the potential benefits of a prefabricated granny flat. Prefabricated granny flats are granny flats that are constructed in a factory before being shipped to a building site in pieces, once on-site, they’re then assembled in just a matter of days.
While mobile or manufactured homes, must meet the federal building code that is administered by the U.S. Department of Housing and Urban development (HUD), pre-fabricated ADU’s are required to be constructed according to local or state building codes. Because of this, it makes granny flats a widely-accepted new construction that does not require the same zoning restrictions of a manufactured or mobile home.
Although, there are a lot of pros to owning a prefabricated granny flat, there are also a number of cons. A prefabricated granny flat can be a con for the following reasons:
While it is possible to customize a prefabricated ADU as far as home accessories like kitchen cabinets, paint colors, and a variety of different finishes, but when it comes to the actual layout it is much more difficult to manipulate your design to fit the regulations of your city.
Building an ADU takes a very specific set of skills that not every general contractor has experience in. It is important to do thorough research to make sure you’re hiring someone that has experience specifically with constructing granny flats.
There are some government regulations that ban factory-built homes in single-family neighborhoods or can have complicated rules around the regulations that make it difficult to really tell if it is allowed or prohibited. Always make sure to do thorough research before investing into a prefabricated granny flat.
Not every neighborhood or housing site will be suitable for an ADU construction. Things like, narrow streets, above ground electrical wires, or the lack of a staging area can all hinder your construction project. Understand what limitations your neighborhood has and talk with your potential prefab designer and discuss the different options you have.
What makes prefabricated granny flats so attractive to homeowners is that they are usually less work to construct and that they appear to be cheaper than building one from scratch, but the first price you’re quoted is usually not your last price. When creating a budget for a prefabricated granny flat you must consider things like, crane costs, transportation costs, and potential sales tax. By the time you are done paying for your pre-fabricated ADU, it’ll run you about the same cost as building one from scratch.
While you may have been following state law in the process of choosing your pre-fabricated ADU, some local jurisdictions may not know or even care about them and attempt to charge you full fees, and inspect your granny flat, despite it being previously inspected by the factory. If you happen to encounter this issue, call the HCD and have them explain your rights to you.
While constructing prefabricated granny flats is a profitable business, it is still a pretty new industry and because of that a lot of new companies are emerging. Some of these companies have gone bankrupt, which has resulted in homeowners losing their deposits. Always be sure to check the background, referrals, and other prerequisites before deciding to move forward.
Despite all of the cons, if you’re still interested in a prefabricated granny flat it is important to talk extensively with the manufacturer that you’re considering for this type of project. If you’re wanting to sit back and let a company do all the work for you, a prefab ADU may not be the best decision.
While in recent times it is much easier to get council to approve a granny flat, still make sure you do your due diligence. You’ll need to confirm things like the size of the block required, how close it can be to a fence and access needed. Knowing these details beforehand will save you lots of time and accepted hiccups during the construction process. Typically you’ll be using this strategy in lower and outer socio economic areas. These are areas that tend to deliver below average capital growth.
A granny flat can be constructed from a number of different structural forms. They can also come with a variety of different amenities as well . Some granny flats are a miniature version of a full-sized home and have complete kitchens. Others, have limited kitchen facilities like a mini fridge and a microwave which are less hazardous. Depending on the size you’re most comfortable with and can afford will have a significant impact on where and how you structure your granny flat.
Luckily, there are a lot of different options for you to choose from so you can make sure that you’re getting the design that is just right for you and your unique situation.
This is the most popular type of ADU because it really maximizes the space you already have as opposed to creating or adding on an entirely new space. Attached ADU’s are versatile to use as a short or long-term leasing option because they always include a separate door from the main property, this ensures maximum privacy for both the homeowner and the ADU occupant.
Out of all of the granny flat designs, this one is probably the easiest to execute. While garage’s are usually used as a storage area, they make for a rentable and flexible living area. It is easy to transform because you have a preset structure to build from; four walls, a foundation, and a roof. If you’d rather have your garage space for your car, another alternative is to build a second level on top of your current garage structure.
If you have an underutilized yard, this is a great design option. This type of granny flat attracts vacation and long-term renters because of its physical separation from the main property.
Converting your basement or attic into a granny flat is also another way to have a foundational structure that can assist in the overall construction of the ADU as opposed to constructing it from scratch. This may be more ideal if you have an elder relative that can occupy the ADU, rather than renting it to a general occupant.
Are you a homeowner that is interested in building a second rentable unit that could possibly provide financial assistance or freedom? Then building a granny flat may be for you, but you may also be wondering if it is a good investment as well. A granny flat could be a good investment if the following applies to you:
The answer to this question really depends on what specific market you’re in and who is searching for these types of properties. For some older families it may be useful if their older kids need to move back in, they can still have their personal space. It may be useful to younger adults for the purpose of generating extra income to help pay off their mortgage.
A granny flat may increase the property value of your home, but not by very much. It is actually possible that the cost of the granny flat may cost more than the actual increased value that it adds to your home.
There is liable to be a few tax implications when it comes to building a granny flat that can really determine if it is a good or a bad investment. The first common type of tax when your property value increases is a capital gains tax, unless you and your family will be using the entire residence, in that case this tax will not be charged.
If you happen to be using your granny flat for business purposes you can claim any expenses that may arise from the property as a tax deduction. If you have loan interest payments or depreciation expenses can also be claimed. It’s always a good idea to discuss anything tax-related with an accountant.
Are you just building a granny flat as a side project or are you looking and have the potential to make extra income that can be used to potentially help pay off the mortgage of your single-family home? If the potential ROI or ability to make income is there, it very well may be a good investment.
If you only have one investment property, you are limited to how much income you can make. If that property does not have an occupant, you’re not making any money, but if you have two properties, in order to consistently bring in profit you just need to keep at least one of them occupied and with rising costs of housing in San Diego, keeping a granny flat occupied may not be hard to do.
In some jurisdictions there are certain regulations that need to be abided by. This may not necessarily mean complete restriction of a granny flat, but it could mean particular structure regulations. The last thing you want to happen is to completely have floor plan of your granny flat laid out just to find that your property doesn’t meet the minimum requirements.
If you are thinking of financing your granny flat, how much will you be able to afford in loan and interest rates? Are you currently making enough income to cover the loan payments? These are all very important questions you should think about before investing in a granny flat.
Whether or not you should consider building a granny flat will depend on a number of different factors including, finances, loaning options, investment considerations and the overall housing market in your specific area.
Cities can actually benefit from granny flats for a number of reasons, one of the biggest being the rising housing economy in San Diego and the lack of availability. Its is always a critical measure to make sure you are conducting the proper research and talking to the right people who are familiar and knowledgeable in the topic of granny flats.
A part of conducting your own research means knowing specific things like the estimated cost of the potential granny flat you’ll have built. This means talking to general contractors to get an accurate price. Knowing whether you’d rather build your granny flat from scratch or have a prefabricated one is vital when it comes to considering prices. Understanding tax information is also an important part in the decision-making process. Speaking with an accountant can give you clarity on everything you need involving tax related regulations with your granny flat.
Another important factor to consider before making your decision is if a granny flat will improve the quality of your life. Will it be more of a convenience or a hassle? This can mean your children having a place to come home to during college breaks or caring for an elderly parent.
Regardless of the specific reason you may be interested in acquiring a granny flat, if you follow the steps in this guide, you’ll be sure to make the decision that is best for you, whether that means investing in a granny flat or choosing a different alternative.
Technology is everywhere these days, for better or worse. You read a lot of how it’s influencing construction and we agree it can help, especially in the visualization process. Although, we are not done with this specific project (2nd Story Addition) it’s coming along quite nicely thanks to a cooperative client.
This Second Story Addition located in Lakeside & SJB has been working on it for over 6 months now. Using our designer and the clients creative ideas we’ve been able to assess some of the 3D renderings before and after the job and they are looking pretty sweet thus far.
Note: Some details changed such as colors.