Appeal of North Bay ‘granny flats’ grows, but challenges to build them remain

Granny flats have evolved from makeshift additions for an older relative to live out her days to stylish dwellings that could win architectural and design awards.

No longer are these in-demand homes inhabited just by a certain age group either. That’s because in addition to people constructing second units for family, they are being built as a revenue source for their owners.

They have also become a go-to solution for Bay Area officials and builders seeking quicker and less expensive ways to bolster the region’s strained housing supply.

Ash Notaney and Debbie Rossotti pivoted midstream as they were having a granny unit built in Agua Caliente in unincorporated Sonoma County.

The full-time San Francisco residents purchased the property in fall 2020 with the intention of building what is officially called an accessory dwelling unit, or ADU, to accompany the 700-square-foot log cabin already on the acreage. The plan was for it to be a rental.

“We ended up falling in love with the building and this is going to be our forever house,” Notaney told the Journal. Before that can happens they need to get their children through school.

For now the nearly 1,000-square-foot two-story A-frame is being rented out to traveling nurses and the like — anyone who will stay 30 days or longer to satisfy county laws on short-term rentals.

The two-bedroom house has full bath rooms on each floor. It comes with a complete kitchen, spiral staircase and upgraded amenities. Rossotti did not share the cost of its construction. Notaney said through the process the Sonoma County planners were helpful cutting the red tape.

“We landscaped the entire property and added a pool. There’s an outside sitting area and fire pit so there is shared space (for the two houses). The driveway can accommodate four cars side by side so each property could have two cars,” Notaney said.

Permit process needs help

In order to put a dent in California’s housing shortage, state and local lawmakers have eliminated a substantial amount of red tape to allow homeowners to build second residences on a property.

Rohnert Park in November became the latest local city in that mix, approving an ordinance that made changes to city code to match new state laws seeking to spur housing construction.

“We want to preserve our neighborhoods and maintain a tight-knit community,” said Mayor Samantha Rodriguez. “Simplifying the ADU development process provides a source of income for homeowners. This will also make Rohnert Park more accessible for those who cannot afford single-family homes.”

The new laws have made granny units even more “attractive to homeowners because the application review process became more streamlined,” said Erin Morris, Vacaville’s community development director. Grann units are subject to more basic review, “have reduced building impact fees, reduced parking and setback requirements, and no longer require the owner-occupancy of sites until Jan. 1, 2025.”

A widening group of housing advocates and government officials are promoting in-law units as a way to combat the state's deepening housing shortage.

“The state is seeing we need to streamline, and that we need to take bigger steps to get ADUs built as one piece of the housing solution,” Renee Schomp, director of Napa Sonoma ADU Center, said.

In the past 18 months, the nonprofit has helped 550 homeowners in Sonoma and Napa counties start the ADU process.

Number of units is increasing

Streamlining regulations appears to be working: Local jurisdictions are seeing an uptick in granny unit applications. In 2017, a state law mandated jurisdictions relax ADU requirements and many counties and cities followed suit, adopting their own ordinances.

The spike in Santa Rosa comes after that change and amid a huge rebuilding push after the 2017 Tubbs Fire.

Prior to firestorm, there were 26 ADUs in the Fountaingrove and Coffey Park neighborhoods. Since the fire, 112 ADU permits have been issued in those areas, with 61 finished, according to city spokesperson Kevin King.

The city of Napa issued 26 ADU permits in 2021, while 33 have been issued in the first 10 months of this year.

San Rafael’s numbers are also going up, too. Alicia Giudice, the city’s community development director, said prior to 2018 the San Rafael had approved about five in-law units a year.

In 2018, 27 were granted, while between 2019-21 an average of 19 permits were issued each of those years. Through October this year 39 permits have been signed off.

In Marin County, 173 ADU permits have been approved from January 2020 through October 2022.

“We have never issued a denial letter or rejected a permit,” said Manny Bereket, senior planner with the county’s Community Development Agency.

In the Napa Valley, Calistoga issued two ADU permits in 2019, one was built; in 2020 there were seven permits issued and one expired; 2021 saw eight permits and two completions; while this year through October eight more permits have been issued, with all of them in the process of being built, according the Lauren Clark in the city's Planning Division.

Problems and constraints

Still, California’s housing production continues to lag its population growth, which last year shrunk for the second year in a row, a historic reversal for the nation’s most populous state.

California's Statewide Housing Plan calls an acceleration of new home construction over the next eight years with a target of 2.5 million homes. The plan breaks it down by the incomes of the prospective buyers:

• 643,352 very-low-income homes
• 384,910 low-income homes
• 420, 814 moderate-income homes
• 1,051,177 above-moderate-income homes

But even as the permitting process is getting easier and building limits are cleared, obstacles remain, chief among them cost.

“In speaking with various homeowners and potential applicants, the constraints are related to a steep rise in construction expenses in the past two years and fees associated with connection for water and wastewater. In some instances, applicants have told us that water and wastewater connection amount to $220,000. (Then there are) school district impact fees and lack of available qualified contractors,” said Bereket, the Marin County senior planner. “More often than not, homeowners engage architects and contractors before conducting a complete feasibility analysis only to abandon the permits once they have been approved.”

Chris Craiker, president of Craiker Architects & Planners in Napa, is not convinced jurisdictions are doing all they can to expedite second-unit permits.

“It’s still slow to get through cities and counties. Cities want them, but they make them tough to do,” Craiker said.

He noted some cities have water restrictions which make building proposals unworkable.

For instance, Sonoma County in October implemented a six-month ban on drilling new wells.

And by 2024, all new commercial and residential buildings must get their energy from electricity, not natural gas.

“The intent originally was to create more workforce housing and housing for people working in the fields or in hospitality. I just don’t see that happening,” said Craiker.

That’s not to say his firm hasn’t been working on second units; about a half dozen such projects are in its portfolio this year.

Desire to build

Interviews granny-unit owners make clear they are built to serve multiple purposes, not just to have strangers pay rent.

Paul O’Rear started the process at his Rincon Valley property in Santa Rosa in 2021 for his parents, who both turned 90 this year. For now they are content where they are, so his daughter and son-in-law are living in the nearly 1,100-square-foot, two-bedroom, two-bath home.

Vaulted ceilings are in the living and kitchen area, with the latter having stone countertops.

“Water and sewer hookup fees are less on an ADU than if you build a stand-alone house on a lot,” O’Rear said, though he didn’t share prices for the structure. “The overall cost of the project because of the times we are in were still outrageous, but we were determined to build now. The incremental cost to have nice finishings was well worth the expense.”

In the future, O’Rear expects the home to provide retirement income for him and his wife.

The unit is one of four that Dustin Deason, owner of Brandywine Builders in Sebastopol, has under contract. Normally, he builds one or two a year.

“It’s one of the things that California is doing right to solve the housing crisis. Higher density has to be the solution,” Deason said.

Santa Rosa resident Mike Winter embarked on his granny-unit project by seeking counsel from the Napa Sonoma ADU Center. As a retired contractor he better than most understood what he was about to undertake. Even so, a number of headaches ensued.

“We submitted our plan package on May 15, 2021. We got the permit in the last week of August. That is a long time for a 585-square-foot building,” Winter said.

In mid-November, he was staring at an empty hole in the kitchen where the induction stove is slated to go. It was supposed to arrive in August. Light fixtures are also hung up in the supply chain debacle.

Once the final inspection takes place, his adult daughter can move in.

Even with the hurdles, Winter said he would do it again.

“Building out areas like we have and other ADU owners have makes a lot of sense. It is good land use,” Winter said. “We used to have a little garden back here. My argument with my wife was why don’t we buy tomatoes from the farmers at the market who rely on it for their living and we will put our land to a different use.”

One thing in particular that Agua Caliente homeowner Notaney liked about working with the Napa Sonoma ADU Center was the encouragement to call the county directly to work out issues. He said the county was a breeze to work with, something he has not found to be true in San Francisco.

Nate Atkinson, whose firm Atkinson Builders in Sonoma is building Notaney's home, said, “In Sonoma County you can go right to the county website and you can choose preapproved plans. From there the permitting process is pretty streamlined because they want more rental units.”

Of all the legislation produced to clear the way for ADU construction, Napa Sonoma ADU Center Director Schomp said the most significant to come out of the last legislative session was Senate Bill 897. It prohibits municipalities from denying a second unit because the primary home on the property has code violations. The bill also increases allowable heights for an attached ADU.

Some North Bay governments say they are clearing the way for more ADU construction on their own. In December, Marin County begins a pilot program offering technical assistance for design, permitting and project management of second units.

“All participating homeowners will be required to agree to a deed restriction committing to not using the ADUs as short-term rentals. The program funds cannot be used to build the ADU; homeowners are responsible for securing funding for development costs. There is no income qualification for participating homeowners,” Bereket said.

Napa County supervisors in January will launch a $5 million forgivable loan program for residents who build granny units and then rent them at below market rate.

In Solano County, Morris of the city of Vacaville said general plan revisions are under review to create a construction loan program, as well as providing approved design templates, market financial assistance programs that could provide construction funding, and streamlining permitting and reducing fees for ADU permit applications.

Vacaville also is working with developers to have second units as an option at the get-go.

“Between 2020 and present, one subdivision is in the process of constructing 16 new single-family homes with attached ADUs,” Morris said.