Think ‘Housing Metamorphosis’

housing

I signed up as a faithful community member, to do the right thing, to speak up, to brain-storm and to find answers to what government calls the Housing Elements of our local jurisdictions. I’ve signed up for years and watched the same game, from the same playbook.

Government seeks to meet numbers which are created and derived from regional associations such as AMBAG, i.e., Association of Monterey Bay Area Governments and many with similar handles throughout the State of California that do a numbers crunch and announce that each city and county meet specific numbers and guidelines, all of this done with the ‘best of intentions.’

Those numbers are sometimes astonishingly and seemingly huge and the public outcry often scrubs the numbers down, but not too much because money would be withheld by the State if cities and counties do not comply with those numbers.

Yet, very little housing gets built, so the supply continues to be sparse, especially to those who need it most.

In fact, sometimes the numbers are ‘met’ by using existing housing that is transformed by simply changing the zoning from other uses only to bear a new zoning for housing.

Borrowing from Peter to pay Paul? Double speak? It happens all the time.

We really need to concentrate on building homes/housing that meet all sizes and incomes as a result of careful planning for balanced supply/demand.

Somehow we have created a term called ‘Affordable Housing.’   For years, that term has bothered me because ‘affordable’ is really ‘subsidized’. It is housing that government or developers pay for, with stringent regulations tied to income and price controls—those regulations oft so complex that the rules that govern theiraffordability are like secret, unsolvable cypher.  In my opinion,  we should no longer call these types of programs affordable because they are NOT.

Let’s get real and call it Subsidized Housing, once and for all.

The Housing Elements I signed up, again—to brain-storm about/with, always contain the same critical path, with Associations of Government, and State Housing and Community Development and nothing will change.   It will not change until we recognize the need to alter the old paradigm of using bureaucracies to govern supply. There’s the word: Supply!   That’s what we don’t have.

It will not change until we recognize the need to alter the old paradigm of using bureaucracies to govern supply.

Our zoning refers to multi-residential, but our high density zoning is really very low, compared to other States and (I know I will not be very popular saying this), but some places have created lovely ‘density’ that works! We are terrified of any structure that exceeds three stories. Supply+Density needs to be part of our vocabulary.

What about water? Or, the other argument: We don’t have enough land! I know the arguments, but other places in the world seem to figure it out. We have some of the most brilliant minds in the world living in our area, but somehow it doesn’t matter. Over and over, we keep doing the same thing. We all must be willing to look at other ways of fixing this issue. I’m suggesting that we embrace the idea of creating supply+density, taking into consideration our so-called lack of land, and drought. How long do we continue to ignore saving the rainwater that races to the ocean and considering a better use of the land that helps a community live and thrive? Let’s stop being very much like the famed ostrich whose head is in the sand. Let’s think outside the same, restrictive box! Let’s not keep doing the same things over and over and expecting a different result—oh yes, we know that definition.

 

Rose Marie McNair is a licensed real estate broker in northern California with over 35 years experience in residential/commercial sales as well as Government Affairs and land use oversight. She has held numerous leadership and legislative roles during her career for local and state organizations including theSanta Cruz Association of Realtors, Pajaro Valley Association of Realtors and the California Association of Realtors (CAR).

Investment property too complex? No, just Duplex.

Don’t get in hot water with your ‘duplex’.

LOCAL laws are created with the stroke of a pen and they impact the property you own or property you might want to purchase in the County of Santa Cruz, the City of Santa Cruz, and the City of Capitola. (City of Scotts Valley does not have this law, and I need to check on the City of Watsonville).

Did you know that a house in the County of Santa Cruz, the City of Santa Cruz, or the City of Capitola which includes what is called an Accessory Dwelling Unit (ADU), aka Second Unit or Granny Unit, is not a duplex? A further complication: An ADU should not be confused with a guest house or guest accommodation and cannot be rented for periodic tenancies—it’s only for short guest visits, and must not include cooking facilities, etc. (I am not going to muddy the waters and talk about vacation rentals in this discussion—I’ll leave that for another time!)

So…if you understand these jurisdictions; a parcel with a home MAY allow an ADU, Second Unit, or Granny unit, but with explicit criteria on size of lot, setbacks, floor area ratio, etc. with an approved permit. The most recent properties that have a home and an ADU also have deed restrictions that say:

Subject property owner MUST reside in the main house, or the ADU.

Investors don’t want to move into their investments—they want income on both, but because of the law, they cannot. Also, just because somebody else is doing it, i.e., renting both units does not mean they might not be caught and face red tags, fines and a lot of grief.

Simply put, it means that NO investor can purchase a property with a home and an ADU and rent both units.   They must reside in one or the other. And that means, it is not a duplex! And what if an owner has to leave for a year and go back East to care for a family member and would like to rent out their home? The City of Santa Cruz will allow a 2 year dispensation to an owner who provides this hardship. After that time, they may need to move back in, discontinue the use of the ADU or sell. Santa Cruz County is continuing the Owner Occupancy, as is Capitola for now.

Finally, what if the investor thinks it’s a duplex, because that’s how it’s being used now, or how it was listed for sale. How will the investor know when they buy it?  If they don’t know, I hope they read this blog! Because, what can happen, if discovered, is a jurisdiction may require the investor to do one of the following:

  1. Move in and be an owner-occupant, and rent out only one of the units
  2. Evict a tenant from one of the units and leave said unit vacant, or remove it all together
  3. Sell the property.   That would NOT be a happy investor.

 How can you tell the difference between a home with an ADU?

  1. Call the jurisdiction responsible for the property
  2. Check the zoning! Home and ADU=Residential zoning, which is NOT multi-residential. Make sure you check, because, as I say, with the stroke of the pen, in the ordinance, what use you think you have may be entirely different. Check with the jurisdiction for answers.

I spoke to the City of Capitola about the owner occupancy issue, and they are considering removing this owner occupant mandate, because of the difficulties that arise, and with the shortage of housing, we don’t want to lose units because of the stroke of the pen.

 

Rose Marie McNair is a licensed real estate broker in northern California with over 35 years experience in residential/commercial sales as well as Government Affairs and land use oversight. She has held numerous leadership and legislative roles during her career for local and state organizations including theSanta Cruz Association of Realtors, Pajaro Valley Association of Realtors and the California Association of Realtors (CAR).