Santa Rosa thinks ‘granny units’ could help solve housing crisis

Meg McNees loves her little home on a quiet street in Montgomery Village, and she would like to be able to live out the rest of her days there.

But since it is her largest asset, the 67-year-old retired landscaper and her husband are worried they'll be forced to sell their 1,200-square-foot bungalow to fund their retirement, especially health care costs.

So McNees is exploring plans to build up to a 900-square-foot “granny unit” above her garage to generate rental income, provide a place for her daughter and future grandkids to stay when they visit, and maybe even move into herself someday.

“As a middle-class person, I'm trying to figure out how to stretch my dollar so that I'll be able to stay in Sonoma County,” McNees said. “My financial advisor said this is one way to do it.”

As Santa Rosa grapples with a historic housing crisis, one key way it is trying to encourage more affordable housing is by easing the restrictions on granny units, officially referred to as “accessory dwelling units.”

As it does so, the city has sparked intense interest among property owners, real estate investors and contractors who see an opportunity to help the city to meet its housing demands through more efficient, flexible land uses.

The proposed changes, however, have the potential to significantly impact the density and character of existing neighborhoods, the cost of building such units and the livelihoods of people who already rent second units out for extra income.

Santa Rosa is not alone in tweaking its rules. Sonoma County announced changes to its regulations in January. But as the county's largest city, Santa Rosa's actions could have the broadest impact on the county's housing stock.

The proposed updates, which head to the Santa Rosa Planning Commission in the next couple of months, have the potential to:

- Increase the size of granny units in the city from 700 square feet to up to 1,200 square feet, a 70 percent boost that could create second units larger than some people's main homes.

- Restrict the rental of such units to a minimum of 30 days, a move aimed at freeing up such units for long-term housing. The proposal could face opposition from homeowners who currently rent their units through vacation rental sites like Airbnb.

- Eliminate the requirement that an owner live in either the granny unit or the main house, creating more investment flexibility but also potentially leaving less oversight of the property.

- Allow non-traditional foundations, such as trailers, opening the door to tiny houses being allowed on single-family home properties.

- Reduce steep city fees by aligning them to the size of the unit, instead of the flat-fee structure that requires people building granny units to pay some fees similar to homes three times their size.

The city is still crafting its final proposal in response to intense feedback from the public. A recent meeting on the topic drew about 120 members of the public, said David Guhin, the city's director of planning and economic development.

While details are still being nailed down, the goal of the effort is clear.

“We are working to try and address some of the key barriers that are preventing people from building second units,” Guhin said. “From our outreach efforts, we have heard loud and clear there is a demand for these type of housing units, and that updates to our policy will help make that happen.”

State rules in effect

The state Legislature got the ball rolling last year by passing new laws that eased parking requirements for units built entirely within the footprint of an existing home, such as the conversion of a bedroom or garage into a standalone unit. They also eliminated costly water and sewer fees for such units.

Those laws, which took effect Jan. 1 and supersede local regulations, also boosted the limit on the size of granny units to 1,200 square feet, until local regulations are revised. The state regulations have already led to the approval of two granny units at sizes never before allowed by the city - one off West College Avenue at 870 square feet and another off Highway 12 in east Santa Rosa at just over 1,000 square feet.

The state law, with an eye toward encouraging the conversion of interior spaces into new separate units, also created a new category called “junior accessory dwelling units” of up to 500 square feet.

Now it is up to the city to change its rules on second units in a way that conforms to the new state laws but also crafts regulations that work for Santa Rosa.

The updates are just one of several efforts the city is undertaking to boost housing production in general and affordable housing in particular. They include streamlining the permit review process, prioritizing affordable housing projects, and setting aside $3 million to seed affordable housing production.