Beale's renovation project includes converting an old first-floor laundry room into an in-law apartment. The city now allows this as a bonus for property owners who strengthen their buildings for earthquake safety.

Retrofits are pricy, and Beale says the promise of the extra rental income should take some of the sting out of it for property owners.

"Once people start seeing that they can get an asset out of this, I think that property owners will jump to it," he says.

San Francisco's recent moves to legalize in-law units mark a major policy shift. For years, concerns about neighborhood density, parking and public transit kept the units in the shadows. But the housing crunch has softened those attitudes.

Supervisor Scott Wiener says his pilot program allowing new in-law units in the Castro district and the seismic retrofit legislation, which he also authored, both passed with little pushback.

"Given the situation that we are in today in San Francisco, people are open to a lot of housing ideas, including in-law units, that they may have been skeptical of, even a few years ago," he adds.

Many architects and designers are eager to get in on the new wave and overthrow, once and for all, the image of a dark and cramped basement with a Murphy bed and a hot plate.

Young housing professionals and students swarmed a recent gallery show at the urban policy think tank SPUR, which featured a series of sleek, modern in-law unit designs.

Students from the California College of the Arts drew many of the plans. Architecture student Blake Stevenson named his design "The Lifted Garden." It shows a terraced garden angled over a new in-law unit, which Stevenson imagines placing in the backyard of a two-story house.

"Even though you're putting a new unit in the backyard, it's angled in such a way that the light can get to the lower unit in front," Stevenson explains.

"So everybody has light access, everybody has garden space or green space and, hopefully, everybody's happy," he adds.

A design called "The Public Interface" depicts garages converted into live-work spaces for artists, with large windows to showcase artwork to people passing by.

Another one, "The Thickened Wall," depicts a light-filled attic in an old Victorian with a private, staircase entrance.

Architect and urban designer Neeraj Bhatia, also a CCA professor, asked students to think about who would live in each space and consider what it would feel like to call it home.

"How do you make someone feel that they're not living in a hidden area of the city that they're not supposed to be in?" Bhatia says. "How do they feel proud of where they are and how do they carve out their space within a city?"

The answers came naturally to many students. Bhatia says many live in the city's once-illegal law units or have been priced out of San Francisco's housing market altogether.