Tag Archives: accessory dwelling unit

Is Building an Accessory Dwelling Unit (A.D.U.) a Good Investment?

No matter where you live – Santa Cruz, Monterey, the Peninsula, or for that matter anywhere in California- if you are considering building an ADU your first concern will be feasibility: will this project pencil out? In this article we discuss considerations when deciding whether to invest in constructing a rental unit on one’s property.

Is an ADU a Good Investment?
Even with ADUs gaining popularity, the value an ADU adds to a given piece of property is hard to calculate. This can make determining whether an ADU is a “good investment” difficult. You may not know whether it is a good investment until you sell the property (which may be many years down the road.) Determining whether an ADU is a good investment is also going to depend heavily on the investor’s (your) financial situation and goals. Continue reading


Relaxed Requirements for ADU’s: An Update

Effective January 1, 2017, local laws regarding Secondary Dwelling Units were superseded. State law now mandates that local jurisdictions ease restrictions and barriers to the permitting and use of what are now referred to as Accessory Dwelling Units (“ADUs”). Continue reading

California Legislature Lowers the Bar on Granny Units.

ADUThe California Legislature recently passed new rules making it easier, faster, and presumably less expensive, for people to get permits for new “granny units” otherwise referred to as “accessory dwelling units” (“ADUs”).  Senate Bill 1069, which was signed by Governor Brown on September 27, 2016 and takes effect on January 1, 2017, amends Government Code section 65852.2 to require local agencies statewide to amend their zoning ordinances to implement several uniform development requirements and restrictions on ADUs – both substantive and procedural.

Continue reading

Integrated Design Process (IDP) for Homeowners

0409-tn-1The Department of Energy (DOE) defines Integrated Design Process as “[a] process of design in which multiple disciplines and seemingly unrelated aspects of design are integrated in a manner that permits synergistic benefits to be realized. The goal is to achieve high performance and multiple benefits at a lower cost than the total for all the components combined.”

The Whole Building Design Guide (WBDG) describes Integrated Project Delivery as “an approach to the design and construction process that is based on shared risk and reward, and open exchange of information that is intended to optimize project results. IPD unifies the Project Delivery Team at the beginning of the project with the shared goal of project success.”

While in the public’s mind IDP is generally associated with larger, multi-million dollar projects, such are the benefits of Integrated Project Delivery that in our firm’s practice it’s now the norm rather than the exception, with applications for all our clients, whether institutional, corporate, or residential.

In the case of the homeowner planning a new custom home, a second unit (ADU), or simply a substantial addition, the philosophy and mindset of IDP has important practical benefits.


Diagram: the traditional design process.

First and foremost, the IDP mindset entails bringing an experienced builder onto the project team as early as practicable in the design process. Involving a builder in the capacity of professional estimator allows early and accurate tracking of project construction costs. This eliminates guesswork, reducing the uncertainty surrounding the most important factor in construction, the Project Budget.


Diagram: the integrated design process.

As importantly, factoring costs-benefits as early as possible into the design decision process eliminates uninformed design decisions, re-thinking of previous design assumptions, backtracking, and associated wasted effort.

Regulatory requirements in California are such that the Project Team for anything but the most modest residential project can typically include not only the Owner-Architect partnership but also geotechnical engineer, civil engineer, wastewater specialist, structural engineer, and energy analyst.

With this many professionals working in coordinated fashion towards a common goal, one can see that targeting those resources towards an uninformed goal, without clear comprehension of the construction costs attached to that goal, can be disastrous.

For this reason in our practice for all but the most modest residential projects we typically recommend that the homeowner engage a professional estimator and incorporate them as part of Project Team formation. Thus we collectively target the design objective from an informed position as to construction costs, and not shoot for that objective twice.

In other words, quoting the carpenter’s aphorism, “measure twice, cut once”.

For further reading:




Five Best Design Practices for Small Homes and ADUs

Bird's Eye Axon

Less-Is-More House, a small-scale custom home designed using best design practices.

Over the years our architectural practice has worked out some best design practices for the design of small homes and accessory units, as well as the design choices that should be avoided. You can benefit from our experience. Here’s a list of common design mistakes people make when planning their Not So Big House or accessory dwelling unit.

1. Lack of interior sight lines
Limiting the number of interior walls, thus keeping with an open plan, has the advantage of optimizing a feeling of spaciousness. Conversely, having too many too small rooms contributes to a feeling of kludgyness and claustrophobia. You want a place that feels wonderful and creates a positive catalyst for your goals, therefor keep your floor plan open and airy as much as possible.

2. Too few windows
Many homeowners try to lower their project’s cost by reducing the number of windows. But a house with too few windows is not only a gloomy place to live in, it can actually increase your energy bill if you find yourself using electric lights in daylight hours. As a rule of thumb, you should install at least 10 square feet of windows for every 300 cubic feet of space.

3. Poor window placement
Window placement is also an important design consideration. It’s a mistake to only place windows on one side of a room. This makes a room stuffier and harder too cool because it prevents cross breezes. Especially in living rooms, try to place windows on more than one wall, ideally on walls directly across from each other.

4. Improper kitchen measurements
Kitchens are tricky to design in small homes because refrigerators, ovens, and other appliances take up so much space. Make sure you have enough space in your kitchen to accommodate the specific appliances you want – in fact, it may be best to pick out your appliances before building any counters and cabinetry.

5. Insufficient acoustical separation
Sounds are amplified in small living spaces. Kitchens and bathrooms tend to be the noisiest spaces, and bedrooms the quietest. It’s a good idea to separate the room used for sleeping from the rest of the home with a sound-proofed wall. If you are considering a sleeping loft, consider this factor as part of your decision whether it should be open to the space below or not. If you do elect to have it open, you can minimize noise by placing the loudest spaces beneath the loft, rather than directly across from it.

Why You Should Build an ADU

Followers of this blog will recall that in August I wrote Seven First Steps to Success describing the merits, advantages, and how to begin the process of constructing an accessory dwelling unit (ADU) on your residential property. Briefly, we reviewed the opportunities “Second Units” afford to supplement one’s revenue stream with a relatively affordable initial investment, as well as the opportunity to create additional functional living space.

We also discussed how to approach the process of realizing an ADU, including the need to clarify goals, establish a realistic budget, costs, and anticipated income, identify technical requirements for proceeding, and to consider retaining professional assistance of an architect on an as-needed basis.

Focusing in on the financial aspects in a bit more detail, by way of example for a hypothetical ADU of 400 square feet and an assumed budget of $200/sf, a project budget of $80K would be required. With an initial down payment of $10K the loan amount would be $70K. For a 30 yr fixed loan the monthly payments could be as low as $300/month. Depending on the locality the unit could fetch as much as $1600/month, thus realizing the happy owner a healthy net income of $1200/month.

My August article generated interest from several people, among them Spencer Keenan of Santa Cruz Green Builders. Realizing that we had arrived independently at the same insight as to the growth opportunity ADUs represent to homeowners, we met for coffee recently to compare notes. As it turns out Spencer and his partner Taylor Darling have an section of their website devoted to the subject, including pages specifically devoted to their research on financing, how to qualify, and samples of ADUs they have built. The website is santacruzgreenbuilders.com/

It also generated interest from my colleague local property manager Linda Chattan of CIF Property Management. In conversations we’ve had subsequent to the article, she’s given me some current indicators as to the rental income one might expect in different local areas (City of Santa Cruz, unincorporated areas of Santa Cruz County). For those encouraged to pursue their ADU she has expressed a willingness to help pencil out a realistic financial budget using actual available loan packages and current market rates. She can be contacted at CIF Property Management

At her suggestion I also followed up to find out more about a grant program reportedly offered by the City of Santa Cruz in support of a 2002 City initiative to actively promote ADU construction within City limits. In my subsequent conversation with Housing Programs Coordinator Norm Daly, he confirmed that the 2002 program offering outright construction grants is in fact defunct, funds having been expended since 2006 or so. This prompted Linda Chattan to ponder if there is any initiative afoot to implement another grant program in Santa Cruz or other local jurisdictions: please stay tuned on developments.

Scherer Carriage House

Finally, just to keep the discussion revolving around things architectural (after all, this is an architect’s blog!), I proffer just one example of the many ADUs we’ve designed over the years, this one the Scherer Carriage House, built way back in 1998. The Carriage House, located in the unincorporated area of Santa Cruz County, is an example of a detached Second Unit having a housing element over a 3-car garage. Private access to the unit is afforded by the exterior stair to the left of the image.

We hope you enjoy and are stimulated by the possibilities we have evoked. If you are inspired to post your comment, please don’t hesitate to click the link at the top of this article to “Leave a reply”.

Our website of course is www.silvernailarch.com where you will find many more examples of our work as well as of course our contact information. We look forward to hearing from you!

Seven First Steps To Success In Attaining Your A.D.U.


Scherer Carriage House: main house is at left, ADU (accessory dwelling unit) at right.

An ADU is an additional living unit with kitchen, bathroom, and sleeping facilities in addition to those of a main residence. It may be physically attached or detached from the primary residence. Also known variously as “granny units”, “second units”, or “carriage houses”, ADU’s provide opportunity to use what may be surplus space on a residential lot to house in-laws or relatives, or to provide supplementary income to make one’s mortgage more affordable.


Scherer Carriage House: example of an accessory dwelling unit scheme with habitable area over detached garage.

Throughout our Monterey Bay region, whether you live in Carmel, Monterey, Capitola, Santa Cruz, Scotts Valley, or the unincorporated areas of Monterey or Santa Cruz counties, opting to have an ADU might be the right lifestyle and/or financial choice for you.

Here are Seven “First Steps” we regard as essential considerations for those who are thinking of constructing an ADU:

1. Clarify your goals: are you motivated to build the ADU to provide for the needs of a family member, as rental property, or both over time? The answer to this question will affect your decision-making from the start. Every subsequent decision, from fundamental budgeting considerations to even such a basic consideration as where to place the ADU’s front door will be influenced by who is to live there, and their relationship to your family.

2. Establish your budget: begin to investigate what the up-front costs are likely to be. These will fall into three categories, namely regulatory fees, professional fees, and so-called “hard” construction costs. Work with staff at your local regulatory agency to obtain an estimate for permits and related fees. Once you have determined what, if any, professionals you’ll retain getting their proposals is a relatively straightforward process. If you are unfamiliar with construction costs, work with a contractor or professional estimator to pencil out a construction cost estimate.

3. Develop a pro forma: think about the ADU as an investment. Begin to investigate what the up-front costs are likely to be, and if appropriate, what revenue stream the ADU could create for you.

4. Research your local regulations: carefully review the local regulations applicable to your prospective ADU. The regulations will determine if your property is eligible to obtain an ADU, and if so, such things as how large it can be, how many stories, its placement in proximity to property lines, etc.

5. Identify ancillary requirements: once you establish zoning feasibility, research what, if any supplemental reports and determinations may apply to your prospective project. Depending on your specific site and jurisdiction, these may include such things as a soils report, wastewater plan, archeological study, biotic habitat determination, and the like. None of these may apply, but if they do, you will need to know that!

6. Consider obtaining a property survey: A survey may or may not be value-added to your project. If you have a large lot, your options for placing your ADU will be relatively unlimited. But on small urban lots placement of your ADU will be constrained by property line and set-backs, and your placement options may come down to a game of inches! If this is the case, having a survey will be invaluable to obtaining your optimal result.

7. Retain an Architect: while this might be a first-time experience for you, the research and the process of obtaining an ADU is relatively routine for most Architects. While not a necessity, having a registered Architect working for you from scratch will help you to best anticipate the regulatory, technical, and constructability issues you will need to address.

These are what we would regard as the Seven First Steps to Success. Subsequent steps include conceptualizing your design, testing it for “fit” with your neighborhood and your neighbors, developing a successful design, obtaining permits, and building an elegant and cost-effective asset. We can help you through the entire process.

We hope we’ve peaked your curiosity about the opportunities of having an ADU can afford you. If a consultation with us would be helpful, don’t hesitate to write or call: we’re here to be of service.