The new California law can potentially cause the housing crash some people were wishing for. This law can bring 1.5 million units to bay area. If just 10% of homeowners choose to add second units, SFBA will have additional 150k new housing unit.
How long will it take to get these 150k new inlaw units?
On the other hand, when you have 1.5 million potential landlords, rent control can be easily repealed.
No, only want a correction of 10-15%.
Doubt it. How many people in the bay area will build a 2nd unit ? Many people will have small lots or will want privacy.
150k sounds like a lot. 2011 to 2016 we added over 600k jobs. During the recovery we’ve added 1 housing unit per 8 jobs, so we are way behind in creating housing. So even if those all got built next year, we’d still be way behind on housing units.
When unemployment increases, we do not tear down houses. Some of the “new” jobs are simply “old” jobs that were lost during the recession.
With one house per 8 jobs, our housing price only doubled. If suddenly we get a surplus of housing units when the rent and price are both flattening, it could make Patrick.net go crazy.
I already have an in-law unit for one SFH. Too bad I can’t build on my other properties… Lots are too small already.
Places like SF already have so many inlaws (legal or not) in play. With construction/contractor costs escalating apparently, the cost to put one in today is not like the old days. Glad I did all mine years ago.
CIties could start be legalizing the existing in law units. .Not enough construction workers to crash the market…Besides the whole country is only building 1.2m units a year…Even with no restrictions it would take 10 years to build 1.5m units statewide…That mean 15, 000 per year in the BA…We need 30,000 per year
Well, they have been…finally. It’s the classic case of the doctor arriving after the body has half decomposed…
Inlaw construction used to be reasonable back in the day, but more now. The last time my wife’s friend built one she paid like over $90K. I was stunned. I helped one of my best friend’s back in the day granted do one legally and it was like $20K I think. Those were the good old days…
If everybody were positive as those lending money knowing they will get double, the housing crisis wouldn’t exist. After a recession like the last one, where housing was one of the bad guys, nobody wanted nor had the will to buy or build one home. Those who did, were risking their necks, and they were winners, not complainers.
Something has to build confidence, once the economy it’s on a roll, there are still spectators doubting it’s true. Those are the housing developers and some buyers. Some developers may be scratching their heads right now thinking they should have built recently, not 3 years ago. Some, who knows, may be shaking to the thought the market may crash on them when they are just about to finish a housing development.
And the thinking goes different ways because everybody wants to time the market to their own benefit. I just know that you have to build or buy now, because tomorrow it may be more expensive, not only in price but on the opportunity that may need knives and karate to be a homeowner. Right?
The way to beat the system is to put in in illegal inlaw units…Like in your basement or garage. .I encourage it…To hell with city laws and zoning…People flaunt the law all the time…Why not flaunt for the public good…Housing is the number one issue in urban America. …Screw marching and riots against the one percent…Show real defiance by builiding more housing…It will help the homeless more than rioting and blaming rich people for your troubles…
I would recommend building to code the rooms (bathrooms, bedrooms, etc). Going completely illegal may expose you. It is not going to cost that much to pull permits and draw it up. Easier or a positive when selling too!
My point is if you feel strongky about something do something positive. .do it right for sure…But riots are negative and a total waste of time…As far as the law…only written by self serving nimbyies to keep others down…It is morally right to flaunt it…Garage conversions violate zoning not legal…Basements are very hard to convert legally. .My guess is half the garage conversions in Daly City violate zoning laws
I called the San Jose city to find out what they did with illegal units. “sorry sir, we don’t do that”.
Now, home insurance would like to know about that if the fire starts in that illegal unit.
I converted essentially half of my Sunset garage into a separate 1 bedroom, 1 bathroom living space. Technically, can’t have a kitchen (stove).
As I said, holding affordable, high-quality rentals long-term is a no-brainer to me. But you have to have great management systems and a debt structure that won’t collapse with the market!
If you have loans with community banks with calls or resets coming up in the next 2 years, re-negotiate those loans now and extend them out further.
Pay off debt, stockpile some cash so that when the market dips you can take advantage and pounce!
If you are holding inventory of houses to rehab/flip, I would work that inventory down to a level that you can live with if the music stops. We may not crash, but a slowdown and pullback is absolutely inevitable! Be ready for it.
Happy investing!
We’ve had exactly 1 crash since Fannie/Freddie got directly involved in the mortgage market. Before that, we had two very small dips during recessions. There were 2 other recessions where prices kept increasing.
Anyone waiting for a crash to buy is just going to price themselves out of the market. Plus, if they were too scared to buy in 2008-2011, then they’ll be too scared to buy in the next crash.
isn’t in-law units are almost no-go? Bay area lots are small. Only places i know this can happen is Los altos, and maybe somewhere south of sunnyvale.
Menlo park, atherton has the largest lots, but no way the rich is gonna be doing something like this?
Well, let’s be honest a huge segment of the buying property market is Asian and Asians do tend to have extended families that may live under one roof. In cases like that, inlaw units actually make sense from a practical perspective more so than as supplemental income in that say an elderly mother can take that separate space yet be within reach for care.
Most inlaws are tucked into garage space…Not sure the new laws allow it…But they are needed most in dense cities like SF and Daly City…should just allow them to be legalized
