Demand for tiny homes, ADUs grows in San Mateo County

“There is much more of an eagerness to figure out ways to make these things work, as opposed to saying, ‘No, it won’t work in our community,’” said O’Connor. “[COVID-19] has added pressure of trying to provide solutions, and our tiny home concept is not always going to be the best solution, but it is one tool in the toolbox.”

California relaxed a lot of regulatory burden around developing ADUs in the last couple of years, and they’ve drawn interest not only from charitable housing organizations but also those seeking economical alternatives for family members. Recent laws such as Senate Bill 13 streamlined the process even further, and the number of processed ADU permits in cities throughout the county has steadily increased, with the city of San Mateo’s numbers jumping from seven to 50 between 2017 and 2020.

Mike Lynch and his wife have lived at their Redwood City home for three years, but the property has been in his wife’s family for about seven decades. They started to consider adding an ADU on their property about two years ago.

“We have a relative who is newly single and just turned 60. She currently lives in a studio apartment, but we felt it was more suitable for her to have housing on family-owned property. That was really the impetus for us to start the process,” said Lynch.

In June of last year, the couple was accepted into a new pilot program through the nonprofit Hello Housing, which provides a free suite of services to homeowners in San Mateo County wanting to build an ADU on their property. The program launched just a couple weeks before the start of the first stay-at-home orders in March of last year.

“We were really worried that we had put all of this investment and time into creating a new program and that it wouldn’t be as plausible under the new conditions that people were facing, economically, socially and otherwise. We were profoundly surprised that our program was quickly oversubscribed by interest,” said Jennifer Duffy, vice president of Hello Housing.

While initial appeal for ADUs often derives from wanting to house relatives, it can also provide an additional income base and security net for property owners.

“It was desirable from a number of different standpoints. It’s an 800-square foot, two-bedroom unit, so conceivably it could house two single individuals or a married couple. It could be a rental property, or as we age, we could possibly occupy it, so it has a lot of versatility and utility for us,” said Lynch, who is recently retired.

One tiny home can cost as little as $25,000 to $40,000 to build, with permits for a 1,000-square foot detached unit averaging $7,200 in the county. To construct on properties such as church parking lots, site improvements and utility connections can add an additional $25,000 to $60,000, depending on the homes’ foundation. But compared to the half a million or more price tag to build one traditional multifamily unit — not including potential subsidy costs for affordable housing — the overall cost and time to completion is still a fraction of what it would be for a larger project.

Josh Serrano, co-founder and owner of Pacifica Tiny Homes, said that while he’s seen some tiny home builders go out of business since COVID-19, he’s also experienced heightened interest from potential customers as well.

“Before the pandemic, we were aiming for three homes a month, and now we’re aiming for 10 a month,” said Serrano.

Because their business was already projected to grow over the course of the year, it’s hard to know how much was pandemic-related, but he’s still noticed a shift in the attitudes of residents and city planners since the start of COVID-19. The business sells 200- to 400-square-foot tiny homes all over the country, but the majority of customers are located in the Bay Area.

“A lot of the sales we made were because of COVID. … More people fell on hard times, and I think they are now thinking twice before purchasing a 30-year mortgage,” he said.

With a statewide moratorium on evictions in place as well, the full effects of the pandemic on housing is yet to be determined, and many feel that urgency for these kinds of solutions remains high.

“In 2009, when we were seeing massive foreclosures and massive movements of people out of their communities, it was very visible,” said Duffy. “I don’t think we’ve had that same lens during this pandemic, and I’m wondering when that veil is going to lift, and we start to see the real impacts of what people have been patching together for this past year and beyond, and what that’s going to look like going forward.”