Silicon Valley property owners split lots--neighbors not happy

Neighbors halted a lot-splitting project on East Hills Drive in San Jose, Calif., by surrounding the lot with their cars and making it difficult for equipment to maneuver in August 2015. Neighbors halted a lot-splitting project on East Hills Drive in San Jose, Calif., by surrounding the lot with their cars and making it difficult for equipment to maneuver in August 2015. Photo: Dennis Burt Photo: Dennis Burt Image 1 of / 14 Caption Close Silicon Valley property owners split lots--neighbors not happy 1 / 14 Back to Gallery

The housing shortage in the Silicon Valley is leading to a new trend called "lot-splitting," in which property owners are building two, three, even four homes on pieces of land where there used to be only one.

This is a boon for the owners who maximize their profits, the county that collects extra tax dollars, and tech workers desperate for housing—but some residents in neighborhoods struck by the building boom aren't happy.

CBS San Francisco reports on a situation in August when a 1950s house on East Hills Drive in San Jose was demolished to make way for up to four new homes. When neighbors learned an oak tree and natural rock formation would also be destroyed, they tried to stop the project by blocking construction equipment with their cars.

"We parked our cars around the portion of the street that curves around the oak tree and stopped the big bulldozers and dump trucks," neighbor Dennis Burt said in an interview. "We made it hard for the trucks to maneuver and slowed them down and put a halt to everything so we could have the situation investigated."

Video: Lot splitting CBS video

A hundred years ago, fruit orchards bloomed across the Santa Clara Valley. Land was cheap and plentiful, and homesteads were surrounded by large pieces of property. Even after World War II when hundreds of thousands of single-family homes popped up in newly formed neighborhoods around the valley, many lots were relatively large by today's standards.

But now as the tech industry booms and high-paying jobs attract people from all over the globe, housing is scarce. Property owners with big chunks of land are seeing an opportunity to increase their profits by building multiple homes and helping with housing demands.

"The reason it's happening is basic economics as property values increase and we have a significant housing shortage," Silicon Valley real estate agent Myron Von Raesfeld said in an interview. "Our value here is unique. We're encapsulated by mountains. We can't just sprawl out. We can't do what other cities in places like Texas are doing where the suburban sprawl just keeps growing and growing. We need to make best use of the land we have."

Von Raesfeld is an advocate for lot-splitting. A few years ago he purchased a 0.66-acre piece of property in Santa Clara with some investors and they're in the process of obtaining the permits to divide it.

The land includes an 1892 six-bedroom Queen Anne Victorian that he plans to preserve as well as an enormous backyard that he says could easily accommodate an additional home. Von Raesfeld is exploring moving one of the historic homes threatened by Santa Clara's Irvine Community Development construction project onto this lot.

Another case in point: Two larger homes plus an in-law are planned for a lot on Bel Ayre Drive in Santa Clara that has sat vacant for some 10 years. Von Raesfeld says the project, which he has followed but isn't involved in, will increase the property value from about $1 million to $4 million.

"As long as you're not overcrowding, you're making better use of the land and helping the country bring in more income," Von Raesfeld said. "It's a win-win. I understand some neighbors don't like it because it changes their status quo in their neighborhood but we have a housing shortage and we need to provide more housing in the booming Silicon Valley."

But is it worth splitting-lots when natural landscape is lost?

The lot on East Hills Drive is now surrounded by a chainlink fence covered in green landscaping fabric as the project has become tied up in the permitting process.

The neighbors successfully stopped construction with their vehicle blockade, giving them time to learn the property owner hadn't obtained permits to destroy the rock formation and oak tree and report their findings to the city.

"What makes this neighborhood unique is the big natural rock formation that's made up of huge boulder type rocks the size of cars that jut out of the ground," Burt said. "These rocks and the oak tree are what give our neighborhood character. One morning I saw an egret perched on top of the oak tree. These developers are destroying the natural beauty of our neighborhood."