San Jose sees record in permits for backyard homes

San Jose residents are building mini homes in their backyards and bringing families close together.

Despite economic hardships related to COVID-19 and supply chain delays, 2021 broke records for residents who want to add another home on their property. Permit requests for accessory dwelling units (ADU) reached 804, with 464 permits issued last year. The hot pace is continuing through the first quarter of 2022, with 215 permits requested and 153 granted.

The primary reasons are twofold. Residents want to live near family members or have rental income, said city officials and ADU builders. It is also a relatively quick and affordable option for additional housing. Although prices and timelines vary depending on supplies and size, the average cost is around $300,000 and takes one to two years to complete.

San Jose has been issuing ADU permits since 2015, but the numbers ramped up in 2019 when the city launched its ADU permit program. The program is lead by an “ADU Ally” who guides residents through the application process.

“It’s a very, very popular project to submit and apply for because of the autonomy you have,” said Sarah Shull, the city’s ADU Ally, noting anecdotally most applicants wanted an additional space for family.

San Jose has built a few hundred below-market homes since 2018, but is still far short of its goal to build 25,000 units—10,000 affordable—by 2023. It would’ve needed to build 5,000 units since 2017, but has only averaged 2,400.

San Jose resident Flora Moreno de Thompson initially built an ADU in her home in the Hensley neighborhood in anticipation of her parents living there. While she waits for them to retire, she has rented the ADU out to a college student and on Airbnb, hosted family and friends and used it as a home office.

“Economically speaking we’re getting a really good value for the space,” de Thompson told San José Spotlight. “I have no regrets. It was a really easy, painless process.”

A partial housing solution

In 2020, ADU applications nearly doubled from the previous year when the state passed legislation that closed loopholes and simplified the process, said John Geary, CEO and co-founder of ADU construction company Abodu.

Geary and Shull emphasized it’s not just a bonus for local homeowners, but also an important tool to increase housing in San Jose.

“At its core, I really hope ADUs are on a path toward leveling out housing affordability,” Geary said. “The data isn’t there yet to show a significant impact, but it helps bring the numbers up. More housing means more affordability.”

Geary started developing ADUs in San Jose before expanding to all of California and Washington. He said San Jose is a leader in ADU development, not only in shear numbers, but also in the city’s permitting process. The pre-approved vendors program lists specific companies residents can hire, which expedites approvals. He also pointed to the city’s website that breaks down the process into simple steps.

“In other cities, these permits can take months. In San Jose, a pre-approved vendor can get it approved in a day,” Geary told San José Spotlight.

Geary said San Jose does have fairly high permitting fees, averaging $5,000, despite relaxed permitting restrictions over the past few years, such as providing short-term 0% interest loans.

“San Jose is still the one that our team looks to as a model jurisdiction,” Geary said. “It’s the (city) that is getting it done right and gets it done fast with homeowners in mind.”

Rush to build

District 6, which houses Willow Glen, has been one of the most active areas for ADU applications. In 2021, the district received 159 applications with 97 approved. This year, it has received 34 applications and 30 have already been approved.

Councilmember Dev Davis, who represents District 6, said this is largely because the lots are bigger and because it’s a desirable place to live.

“Many families are part of the sandwich generation, where they’re taking care of older family members or (providing) independent space for their kids,” Davis told San José Spotlight. “It strikes a great balance, as opposed to SB 9, which floods a neighborhood with three times as many people.”

She said ADUs are a much better option than state Senate Bill 9, which allows homeowners to split their properties to develop more housing.

SB 9 has been off to a slow start with no local applications submitted as of February. Geary said that is likely to change in the next few years as the state and local governments improve policies and practices.

“ADUs didn’t take off until 2020 when the state did a cleanup bill,” Geary said. “We’re in that same stage with SB 9 right now. The general framework is really strong and important, but jurisdictions are finding ways to make it very challenging to utilize it. So over the next two, three years here, we’re gonna see some of those challenges be cleaned up at the state level.”

Contact Jana Kadah at [email protected] or @Jana_Kadah on Twitter.