Granny Flats and Short-Term Rentals

by on July 27, 2017 · 12 comments

in Ocean Beach

San Diego City Council on Monday, July 24. Screen capture from 7NBC

The San Diego City Council went ahead on Monday, July 24, and by a 8 to 1 vote, passed a law allowing looser rules for so-called granny flats, in its effort to deal with the city’s housing shortage and affordability crisis.

Many hail granny flats as the panacea to the whole mess in this city, where the average 2 bedroom goes for $1700 a month and where less than half of the residents can afford a median-priced home.

As the San Diego Union-Tribune reported on the vote:

State laws that took effect in January force cities to soften regulations for granny flats regarding parking, installation of fire sprinklers, requirements to hook up public utilities and rules requiring setbacks — buffer areas between structures and property lines.

The new city rules go significantly beyond that by reducing parking requirements and increasing the maximum size of a granny flat, officially called a “companion unit,” from 700 square feet to 50 percent of the primary residence’s size or 1,200 square feet, whichever is less.

In addition to those changes, the city will allow granny flats to be created inside single family homes as long each such unit is equipped with a kitchenette, but a separate bathroom wouldn’t be required.

Called “junior companion units” in the proposed regulations, these can be a maximum of 500 square feet and would cost far less to construct than a separate structure on the property. San Diego Union-Tribune

Yet, concerns have been raised that these small units could be turned into short-term rentals. Here’s how the Voice of San Diego described it:

Now the City Council’s taken an initial vote on a measure that could add yet another wrinkle to a dysfunctional policy-making process that’s dragged on and on. The latest chapter in the debacle came Monday during a City Council vote on a slate of housing affordability reforms championed by Mayor Kevin Faulconer and other city leaders.

City Councilwoman Georgette Gomez and others called for a last-minute change to a new regulation aimed at making it easier for San Diegans to build so-called companion units or granny flats, small units that share a lot with homes that can serve as lower-cost housing options. Gomez wants the city to require a minimum 30-day stay in granny flats, a mandate that would essentially bar using granny flats from being used as vacation rentals.

“I do want to require a 30-day minimum rental period for this in order to move it forward so if that could be added to the motion,” Gomez said as the City Council prepared to vote on the companion unit legislation.

City Councilman Scott Sherman, a crucial proponent of the granny flat and housing reforms, raised a flag. He noted that the City Council is set to hear city staff proposals to regulate short-term rentals in October. “Don’t know if we’re putting cart before the horse but let’s see how everyone else thinks about it,” Sherman said.

City Council members Barbara Bry, Chris Ward and Lorie Zapf cheered Gomez’s idea. “My concern obviously is that these units not be built and be turned into short-term vacation rentals,” Bry said. “The purpose of these units is to house San Diegans.”

City Councilman Chris Cate, who has for more than two years called for clarity and rules that allow for short-term rentals, disagreed. Voice of San Diego

Watch this space for more.

{ 12 comments… read them below or add one }

Geoff Page Geoff Page July 27, 2017 at 11:43 am

All this is doing is giving people who own homes a way to earn income from their properties, so, once again, the folks with money make more money. It will create more revenue for builders too. This will eliminate single family home zones. And, affordable? Unless they put a rent cap on these flats, they will be priced as high as the market will bear. Absentee landlords with a single home on a lot that they rent out will rush to add another unit now that they can. This is a really bad idea, especially for OB and Point Loma.

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Frank Gormlie Frank Gormlie July 27, 2017 at 1:20 pm

One of my questions is, how will the 30 day limit on granny flats be enforced?

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Geoff Page Geoff Page July 27, 2017 at 1:31 pm

The height limit should be enforced in the same manner as any other building within the Prop D area. The new rules do relax some things in the Municipal Code, but nothing can change Prop D’s requirements because this is law that was passed by a public vote.

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Eric July 27, 2017 at 5:27 pm

A thought on the comments. Building granny flats will create jobs for contractors, laborers, plumbers, electricians, framers, roofers, mixer drivers, material handlers, glaziers, inspectors, permiters and all those people put money back into the economy. Traffic will increase in local stores and businesses with the additional occupants. Those that build them will have their property taxes increased that go back into the economy for programs etc. Those that build will also have their insurances increase, they also take on liability housing additional people on their properties and those granny flats will not cost nothing, someone’s going to have to take out a construction loan for a good deal of money again increasing their liabilities. Those little flats will need sewer interconnects, electrical tie ins. Housing is needed. If you extend your liabilities you should be able to charge market rate.

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Geoff Page Geoff Page July 27, 2017 at 8:02 pm

All good points Eric, there can be a plus side but do the pluses outweigh the minuses, that is the question. It depends on your sensibilities. For me, one of the biggest drawbacks will be the loss of open space in the form of backyards. I could put a second unit on my lot but the yard my kids and their friends played in and my dogs run around in would be lost. The community will begin to feel closed in. Because of our topography, we see open space in the form of backyards everywhere . Gradually, that will disappear. Then, there is the traffic and the strain on our infrastructure. This peninsula is hard to get in and out of now, it will get much worse. As I said before, this may be a solution in some places but a one size fits all plan never works well.

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Jason July 28, 2017 at 8:38 am

Eric,

While you make a fine and reasoned argument you did not explain why “once again, the folks with money make more money” is a good thing. Until we figure out a way to make that idea a positive in the minds of all there will always be those believing, supporting and voting for agendas that try flatten the earning curve to the idealistic benefit for all regardless of the long term costs.

Three generations ago packing up your entire family and moving hundreds or even thousands of miles for more opportunity and better living was commonplace. The next saved the world and believed anything was possible. Somehow that spirit of triumph and willingness to sacrifice a little to do a lot has waned, or possibly disappeared altogether. Suggesting that someone move to another community or possibly even another state in order to live a better life is now criminal. Most people today making decisions for others or teaching the next generation have grown up in a world of relative peace and easy opportunity without the knowledge of how to survive in tough times. A whole political movement arose when people realized they could vote in politicians willing to beef up social entitlements. It’s easier to vote for someone to take care of you than it is to work hard or maybe even relocate for better opportunity. Never mind that a little sacrifice might actually allow a person to become the type of person making money with their money they were previously jealous of.

And no, I am not a #MAGA fanboy, I too believe capitalism has gotten out of hand. It’s become a system so complex that only the truly wealthy that authored the rules can afford to navigate it to their advantage. I don’t know that complaining about the system and rallying for more rules that make it harder for people with money to make money is the solution but that idea probably seems easier than supporting rich folk by eliminating the red tape and making it easier for the poor but enthusiastic person to compete with those lighting their illegal Cuban cigars with $100 bills.

Since I discount people that complain without offering solutions I’ll put forward some of my own. Raise taxes on all rental units that collect rent on short periods of stay (STVRs) and enforce that strictly. The city has the ability to put a lien on a property and that’s a powerful enforcement tool. Streamline the development and construction process, especially for multifamily units. Having 8 or 9 people judge your project based on how they “feel” about it isn’t efficient. There are rules in place, follow them if you want to build and enforce the rules in place. Stop the beauty pageant of having to parade your ideas in front of judges for approval. The community has created a strong development document but you cannot legislate taste, especially if that taste is dependent on a group of people who could be a different group of people a few years from now. Drop the fees for all projects that will increase units i.e. if a project is taking a site with a single unit on it but zoned for more, make it easier to add more. Stop the “It’s very close to the F.A.R. limit and I don’t like the shape so it’s a no vote” chicanery. Conversely, increase the fees and future taxes substantially for any project reducing the amount of units. By making the costs known in advance those making money with their money can decide to help the community by adding units or they can pay the community for the inconvenience.

Breathlessly waiting to see if this comment passes the admin muster

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Geoff Page Geoff Page July 28, 2017 at 11:58 am

Eric, there is no reason why your comment would not pass muster, you make reasonable and civil comments. That it is a difference of opinion is not a reason to bar comments on The Rag.
In your first sentence, I’m goingto assume you left out the word “not” when you asked why I thought people with money making more is a not a good thing. I’m not against people making money. What I am against is the growing disparity between folks who have money and those who don’t because it takes money to make money and the gap between those two groups is becoming a chasm.
You wrote that “Three generations ago packing up your entire family and moving hundreds or even thousands of miles for more opportunity and better living was commonplace.” Yes it was and people did that out of desperation because there was no life for them where they were. Desperation drove this movement and we are not desperate.
You wrote “Suggesting that someone move to another community or possibly even another state in order to live a better life is now criminal.” I agree with that but if the suggestion is that my son or daughter move someplace else when they grew up here I would disagree vehemently. I think we need to try to keep our place livable instead of abandoning it to those who can afford it.
You wrote that “Most people today making decisions for others or teaching the next generation have grown up in a world of relative peace and easy opportunity without the knowledge of how to survive in tough times.” I’m going to have to disagree with that. No generation has grown up in peace and easy opportunity. And these are not tough times other than people with money taking control of the country. The kind of survival you seem to be alluding to is something like the Great Depression and that was a very different experience.
You wrote “A whole political movement arose when people realized they could vote in politicians willing to beef up social entitlements.” Once again, I have to disagree, the social movement was a realization that this is a rich nation and that it should be able to take care of the poor, the needy, the mentally ill, and the old folks. And why not? Do people like Bill Gates and Jeff Bezos really need $75 billion dollars for their own personal wealth. I applaud both men for making their own way and Gates is being very generous with his wealth but a lot of people are just getting richer and richer and a lot of other folks are getting poorer and sicker. No, people did not vote in politicians so they could be taken care of, they voted in politicians that would help take care of others.
You wrote “I don’t know that complaining about the system and rallying for more rules that make it harder for people with money to make money is the solution but that idea probably seems easier than supporting rich folk by eliminating the red tape and making it easier for the poor but enthusiastic person to compete with those lighting their illegal Cuban cigars with $100 bills.” I never said anything about making the rules harder, I said let’s not concentrate on making it easier.
It was good to see that you had some suggestions to put forward, that is admirable. Of course, I have comments but I appreciate that you offered ideas.
“Raise taxes on all rental units that collect rent on short periods of stay (STVRs) and enforce that strictly.” I believe they are already doing this by making them pay the same taxes as hotels. The problem is these units are illegal in single family neighborhoods and we can’t even get the city to enforce its own law on this.
“The city has the ability to put a lien on a property and that’s a powerful enforcement tool.” You can only file a lien if the owner owes money, if they pay it there can’t be a lien.
“Streamline the development and construction process, especially for multifamily units.” It is easy to say streamline but what do you give up? The construction process doesn’t need streamlining. The development process for multi-family homes -apartments – is pretty fast under the ministerial process. But, developers then convert the project to condos because they can make more money and the renters suffer.
“Having 8 or 9 people judge your project based on how they “feel” about it isn’t efficient.” I beg to differ and planning board people don’t judge a project on how they feel about it, their job is to review it to see if it is in compliance with the community plan that they are guardians of. These people are architects, attorneys, construction professionals, etc. Your comment does not give these people the respect they deserve.
“There are rules in place, follow them if you want to build and enforce the rules in place.” Now, you’ve said a mouthful. Developers are constantly bending the rules and asking for variances and the city has a dismal record of enforcing the rules. But I agree with your point.
“Stop the beauty pageant of having to parade your ideas in front of judges for approval.’” Again, I think you are denigrating the work of a lot of dedicated people.
“The community has created a strong development document but you cannot legislate taste, especially if that taste is dependent on a group of people who could be a different group of people a few years from now.” Our development document is almost 40 years old and the city hasn’t even scheduled an update. Yes, the people change, but the rules they follow don’t.
“Drop the fees for all projects that will increase units i.e. if a project is taking a site with a single unit on it but zoned for more, make it easier to add more.” The city in fact insists that developers add as many units as possible. We had a developer come before us who did not want to maximize her site and the battles she fought with the city over this were disheartening.

“Stop the “It’s very close to the F.A.R. limit and I don’t like the shape so it’s a no vote” chicanery.” The FAR limit is allowed, no one votes against a project because it’s close to the FAR. These people do weigh in on the shape, that is part of their job but I’ve never heard of a rejection based on shape. I will say these comments have resulted in developers agreeing to changes that made a better looking building for the community. One example is the new building on Voltaire and Sunset Cliffs. The recessed area on the first floor was a suggestion that the builder agreed to rather than have symmetrical box of a structure.
“Conversely, increase the fees and future taxes substantially for any project reducing the amount of units. By making the costs known in advance those making money with their money can decide to help the community by adding units or they can pay the community for the inconvenience.” I have yet to see a project that decreased the number of units on a lot, ever. I think this idea would not hold up in court.

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Eric July 28, 2017 at 1:50 pm

Hey Jeff those words weren’t mine. Anyway, density is going to or has to increase, it’s that or sprawl. People keep breeding, population increases and they need somewhere to go.
Jason,
If I were to assume a loan of $100,000 or more to build a to code granny flat on land that I again am in debt to the banks for, assume liability for those loans, insurance, potential bad renter liability, intermittent vacancies, maintenance, repairs, rental market fluctuation, taxes etc etc and I can’t make some kind of profit? It’s not all people with money, making more money, for some it’s extending themselves, putting their whole nut on the line to try and make it a little better for oneself. Not all owners (the bank actually owns mine) are Cuban cigar smokin, hundred dollar bill burners. Some are blue collar, hard life, overtime working folks that went without for a long time and saved their behinds off to get their dream place and lifestyle near the water they worship.

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Geoff Page Geoff Page July 28, 2017 at 2:00 pm

Eric, I apologize for mistakenly attributing those remarks to you.

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Eric July 29, 2017 at 8:29 am

No harm no foul Geoff. I appreciated your dialogue.

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Geoff Page Geoff Page July 31, 2017 at 10:37 am

Thank you, I also appreciated the discussion.

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triggerfinger July 31, 2017 at 6:00 pm

Thank you city council. That antiquated 21′ height limitation for granny flats was way too restrictive. Now I can build my affordable 3 story granny flat in the backyard of my 1,500 sqft lot.

And thanks to the pro-STVR councilmembers, I can list it on airbnb to all those vacationing grannies. They are a raucous bunch.

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