ECA Newsletter
1-11-19
Making Granny Sexy?
Sonoma County lost over 5,000 homes in October of 2017 and there was already a housing shortage. Where is the “rebuild” almost 18 months later?
1525 permits have been issued
113 units have been completed
920 are under construction
200 more are approved to begin construction
430 lots have been sold
330 lots are listed for sale
The estimate is that 800 homes will be completed in 2019. Add those 800 to the 113 already completed, and we would be at 913 homes rebuilt. In December of 2019, that would be well over 2 years since the fires destroyed over 5,300 homes. Less than 20% rebuilt.
Both Sonoma County and the City of Santa Rosa have tried to encourage homeowners and contractors to include more Accessory Dwelling Units (ADU’s) in their plans. Although I do not have the numbers on the ADU’s currently under construction or approved, the word is from both the City and the County that ADU’s are not “catching on” as they had hoped.
Why not?
Although nobody is saying this publicly, I believe the “unsexiness” of ADU’s (also known as Granny units) has a great deal to do with the initial cost of building the ADU which makes for a long time for the homeowner/investor to recoup their capital outlay through the extra rent. Also, it is a tough choice for many to consider having someone, or some other family, living on their property in the ADU. With the uncertainty raised by some zealots trying to have rent control measures passed, that lends uncertainty to how much rent the homeowner/investor can charge in the future.
So how do we look as a community if this pace of rebuilding continues? Will it really take 10-12 years to just rebuild what we lost in the fires? Certainly, the pace in Coffey Park is moving along pretty nicely, but the pace of reconstructing in Fountaingrove has been delayed for a number of reasons. First-the extreme fire heat chemically changed the water service piping and left a dangerous byproduct, a carcinogen called benzene behind in the water distribution piping. Not only did this create anxiety amongst homeowners trying to decide whether to rebuild or not, but mortgage companies would not even lend on those properties until the City of Santa Rosa “cleaned up” the problem. Adding to those delays and uncertainties, the difficulties in building in Fountaingrove far exceed the level of building difficulty in the much more level Coffey Park area. Permit approval takes longer in the Fountaingrove area because homeowners are not as apt to rebuild the exact same house as before (which is more often the case in Coffey Park).
So, if it is going to take 10 years to rebuild Sonoma County fire damaged or destroyed homes, where are the folks going to live that we need for our businesses? Believe me, there are a lot of negotiations going on to build high density housing in many areas of Santa Rosa these days. The City realized their budget is trashed and they need housing and residents first and foremost to get fiscally healthy again. There are plans to pre-approve projects in certain areas to streamline and provide a “time certain” approval date so investors and developers can fix their costs and their timing of starting an income stream. Needless to say, this is a complex issue that has a lot of moving parts and our elected have a lot of hard work in front of them. What can we do? Be ready to provide estimates to those that are getting entitlements and consider adding an ADU to your existing home. Rental prices are high and loan rates are still relatively low. The City and County will try to accommodate an ADU right now more than ever before.
Make Granny sexy again! Build Granny units!
That’s All Folks!
John
