Back­yard con­tainer house? Not so fast

Bay Area fam­ily’s ar­du­ous odyssey to cre­ate mod­u­lar home

San Francisco Chronicle - - FRONT PAGE - KATH­LEEN PEN­DER

A year ago, Joshua To set out to build a 640-square-foot home made of four metal ship­ping con­tain­ers in the back­yard of his Menlo Park home. A de­sign di­rec­tor for Google by day, To also runs a non­profit called Soup that uses in­no­va­tive de­sign to tackle prob­lems such as the Bay Area’s af­ford­able­hous­ing short­age.

When I first met To and his wife Sara in Jan­uary 2017, they had just teamed up with Honomobo, a Cana­dian man­u­fac­turer of con­tainer and pre­fab homes. This would be Honomobo’s first per­mit­ted con­tainer home in Cal­i­for­nia, and an ex­per­i­ment for Soup, to see if con­tain­ers could pro­vide eco­nom­i­cal hous­ing at scale.

To once lived in a ship­ping con­tainer with­out heat or plumb­ing in Half Moon Bay for a year and “saw the value of keep­ing costs low and sav­ing money,” he said.

Although Honomobo’s tricked-out con­tainer homes are not nec­es­sar­ily cheaper than

It was like “death by 5,000 pa­per cuts.” Joshua To, on his fam­ily’s or­deal in build­ing a back­yard con­tainer home

tra­di­tional con­struc­tion, they’re quicker to in­stall and don’t re­quire gen­eral con­trac­tors, who are in short sup­ply. They come out of the com­pany’s fac­tory near Ed­mon­ton painted in­side and out with win­dows and pa­tio doors, floor­ing, elec­tric­ity, plumb­ing, kitchen and bath­room fix­tures, clos­ets, washer-dryer hookups, heat and air con­di­tion­ing — everything ex­cept fur­ni­ture and ap­pli­ances.

To’s move comes at a time when Cal­i­for­nia is push­ing cities to elim­i­nate some bar­ri­ers home­own­ers face when they want to build “ac­ces­sory dwelling units,” of­ten called ADUs, in-laws or granny flats. Law­mak­ers in Sacra­mento see them as a source of af­ford­able, in­fill hous­ing fi­nanced by home­own­ers. Sec­ond units “rent for 30 per­cent less than a com­pa­ra­ble apart­ment in the same com­mu­nity,” said Matt Re­gan, a se­nior vice pres­i­dent with the Bay Area Coun­cil.

Two laws that took ef­fect early last year, SB1069 and AB2299, stream­line the per­mit­ting process and pre­vent lo­cal ju­ris­dic­tions from re­quir­ing new off-street park­ing if public trans­porta­tion is within a half mile. They also for­bid util­ity hookup fees that are not pro­por­tion­ate to the size of the ac­ces­sory unit. Many util­i­ties had been charg­ing the same hookup fees on in-laws and McMan­sions. If the ac­ces­sory unit is built within the the pri­mary home’s ex­ist­ing space, no hookup fees or off-street park­ing can be re­quired. Two laws passed last year, SB229 and AB494, clar­i­fied some gray ar­eas in the pre­vi­ous two laws.

Steve Valle­jos, whose firm Val­ley Home Devel­op­ment has been build­ing ac­ces­sory units in the Bay Area since 2006, said the lat­est leg­is­la­tion “seemed to get peo­ple off the fence.” He typ­i­cally signs two or three de­sign deals per month. “This month we signed 10,” he said. He ex­pects to com­plete 80 to 100 units this year, up from 15 to 20 a year in the past.

Cal­i­for­nia’s large cities have em­braced the con­cept, Re­gan said. “Los An­ge­les prior to the pas­sage of SB1069 was av­er­ag­ing less than 100 ADU per­mits a year. In 2017 they is­sued over 2,000.” San Fran­cisco is­sued 593 per­mits in the first nine months of last year, up from 384 in all of 2016 and 41 in 2015, ac­cord­ing to a re­port by the Terner Cen­ter. The city’s plan­ning de­part­ment put out a “fan­tas­tic guide” for home­own­ers con­sid­er­ing an ac­ces­sory unit, Re­gan said.

But even when cities are sup­port­ive, build­ing a sec­ond unit is not easy, fast or cheap. “The Bay Area has a lot of red tape, no ques­tion,” said Daniel En­gel­man, co-founder of Honomobo.

The Tos ap­plied for a per­mit from Menlo Park a year ago. “First they said the new unit (which is sleek and mod­ern) didn’t match the look of the main unit built in the 1940s,” To said. “We had to write a let­ter say­ing how we would make it sim­i­lar.”

The city also made them de­mol­ish shelv­ing and a wall the home’s pre­vi­ous own­ers had put in the garage with­out a per­mit. Then they had to get an ar­borist to make sure their dig­ging wouldn’t dis­turb tree roots.

To get an ad­dress for the new two-bed­room unit, they had to fill out a form and pay $50.

They needed a bound­ary sur­vey ($2,475) and a geotech­ni­cal study ($2,670). To called about 50 com­pa­nies for each be­fore he found ones will­ing to do it.

He called 20 com­pa­nies to pour the foun­da­tion. Most wanted $80,000 to $100,000, but one did it for $20,000 be­cause he be­lieved in the idea.

Be­cause the home is in a flood zone, he had to get two el­e­va­tion cer­tifi­cates to­tal­ing $1,500.

In ad­di­tion, the Tos owed Menlo Park $8,985 for a per­mit, plan re­views, in­spec­tions, a ge­ol­o­gist, a “tech­nol­ogy sur­charge” and other fees. This to­tal in­cluded $1,295 of “impact” fees, which lo­cal ju­ris­dic­tions can charge to pay for in­fra­struc­ture needs that devel­op­ment brings.

They also had to pay $2,227 in impact fees to their ele­men­tary and high school dis­tricts.

Mean­while, the U.S. dol­lar was weak­en­ing against the Cana­dian dol­lar, which in­creased the cost of the con­tain­ers.

It was like “death by 5,000 pa­per cuts,” To said.

The city sent To’s plans to a dozen neigh­bors, in­clud­ing seven whose prop­erty bor­ders their nearly 10,000 square-foot lot. The fam­ily had made it a point to get to know their neigh­bors af­ter they bought their mod­est home in 2016, and none ob­jected to the plan.

In fact their rear-yard neigh­bor al­lowed the home to be placed 5 feet from the prop­erty line, in­stead of the usual 10foot set­back. Two other neigh­bors agreed to have a fence re­moved so the con­tain­ers could be moved in.

“I re­ally think it’s im­por­tant to have af­ford­able hous­ing, and this is a re­ally ex­cit­ing project,” said one of those neigh­bors, Cindy Stead. “It did take neigh­bor­hood co­op­er­a­tion for it to hap­pen, and that’s what we need right now.”

The Tos fi­nally got their per­mit in Oc­to­ber, had their foun­da­tion poured in Novem­ber and sched­uled the big move for Fri­day, Jan. 12.

Honomobo buys con­tain­ers, for about $5,000 each, af­ter they’ve made a sin­gle one-way ship­ment from China. That way it can be sure they are not bent out of shape and haven’t car­ried any­thing toxic. Each con­tainer is 40 by 8 feet and 9.5 feet tall. To’s con­tain­ers were cut down to 22 by 8 feet, which in­cluded a 2-foot over­hang around the home. Honomobo turns off-cut pieces into a 96square-foot mini-unit called the Obo that re­tails for $25,000. To got one of those to use as a back­yard stu­dio.

Nor­mally Honomobo uses a crane to lift con­tain­ers over the main house, but in To’s case, power lines were in the way so the com­pany hired two gi­ant Gradall fork­lifts to trans­port them. The day of the move, the con­tain­ers ar­rived on flatbed trail­ers, fill­ing the neigh­bor­hood with noise and ex­cite­ment. The Tos pro­vided gi­ant piz­zas and drinks to neigh­bors and crews.

The plan was to get them in­stalled in one day. But it wouldn’t be a con­struc­tion project if things went ac­cord­ing to plan.

First the forks on the fork­lift were too small, and new ones had to be found. Then the fork­lifts got stuck in the mud. Large steel plates were brought in to put un­der the tires, but when they ran out of steel plates, work ended for the day. It took three more days be­fore the project was fin­ished.

To plans to use the con­tainer home as a “show unit” for Soup and Honomobo for a few months, then rent it to a low­in­come ten­ant.

En­gel­man said To’s model re­tails for $185,000, but “Josh got a deal be­cause he’s the first.” In­clud­ing foun­da­tion, site work, in­stal­la­tion and fees, he es­ti­mates the to­tal cost with­out a dis­count would run $250,000, or $390 per square foot.

To thinks his cost would have been more like $300,000 with­out a dis­count (which he de­clined to dis­close) be­cause his site was so dif­fi­cult to build on.

Valle­jos, whose firm does con­ven­tional, mod­u­lar and pan­el­ized con­struc­tion (where the fram­ing is built in a fac­tory in­stead of the job site), said his units are run­ning $280 to $320 per square foot ex­clud­ing de­sign, per­mit and impact fees. De­sign fees run around $9,800 for a stan­dard plan or $12,000 for a cus­tom­ized one. Per­mit and impact fees, he said, range from $5,000 in some cities to $40,000 or more.

A bill in­tro­duced this month, SB831, would pro­hibit impact fees on ac­ces­sory units. It also would pro­hibit util­ity hookup fees un­less the home­owner wants a sep­a­rate me­ter and bill.

En­gle­man said if he had to do it again, he would not use a ship­ping con­tainer at To’s home but a steel rigid frame with struc­tural in­su­lated pan­els be­cause it’s cheaper and eas­ier to in­stall.

When To started his project a year ago, he thought it would take three to six months. “If we knew everything we know to­day, I think we could do it” in that time frame, he said.

To said he is proud of his con­tainer home and thinks it would work for other home­own­ers, “es­pe­cially if folks like the aes­thetic.” But for his non­profit, which wants to build af­ford­able homes at scale, “fac­tory-built from scratch with lum­ber and steel would make a lot more sense from a cost stand­point.”

Pho­tos by Michael Ma­cor / The Chronicle

Top: Menlo Park home­owner To car­ries his son, Nainoa, in­side the mod­u­lar home, which re­quired many fees and per­mits.

Above: The ex­tra house in Google en­gi­neer Joshua To’s back­yard is made from four ship­ping con­tain­ers.

Michael Ma­cor / The Chronicle Paul Chinn / The Chronicle

A sec­tion of a ship­ping-con­tainer house is lifted from a flatbed truck be­fore in­stal­la­tion in Joshua To’s back­yard in Menlo Park. Google en­gi­neer To learned that build­ing a sec­ond unit isn’t fast, easy or cheap.

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