This old house might be il­le­gal

Bring­ing decades-old ad­di­tions up to code may not be worth the cost and frus­tra­tion

The Mercury News - - Front Page - By Louis Hansen [email protected]­yare­anews­group.com

Stacey Son­nen­shein got some bad news when she spoke to Con­tra Costa County plan­ners about mak­ing a mi­nor ad­di­tion to her 60-year-old hill­side home.

The county had no record that a decades-old base­ment apart­ment, rented to a friend, was built legally. Son­nen­shein was told to ei­ther evict the ten­ant or do a ren­o­va­tion that she and her part­ner couldn’t af­ford.

Son­nen­shein wishes she had never said a word to the county.

“I would tell peo­ple to never ap­ply for a per­mit. Never let them on your prop­erty,” said Son­nen­shein, a veter-

inar­ian in Berke­ley. “Don’t en­gage with them in any way.”

Wel­come to the world of gray-mar­ket liv­ing, a mu­nic­i­pal game of “don’t ask, don’t tell” about old con­verted garages, base­ment apart­ments and lived-in back­yard stu­dios like Son­nen­shein’s, built decades ago with­out per­mits and con­sid­ered “un­in­hab­it­able” by of­fi­cials.

State law­mak­ers, de­vel­op­ers and plan­ners have tried to sim­plify the per­mit­ting process and to lower fees to en­cour­age new back­yard units, known as ac­ces­sory dwelling units or granny flats, as a rel­a­tively cheap and quick at­tack on the state’s hous­ing short­age and sky-high rents.

But that red-tape cut­ting hasn’t ex­tended to ex­ist­ing flats. Own­ers try­ing to bring older units up to code en­counter costly per­mits and ren­o­va­tions and de­cide it’s not worth the ex­pense, say ad­vo­cates, plan­ners and real es­tate agents.

Most Bay Area cities, in­clud­ing San Jose, don’t have clear di­rec­tions about bring­ing ADUs up to code,

said Vianey Nava, ADU pro­gram man­ager at Hous­ing Trust Sil­i­con Val­ley.

“Peo­ple don’t know what to do,” Nava said. “So no­body both­ers to do it.”

The size of the mar­ket of un­per­mit­ted in-law units in the Bay Area and Cal­i­for­nia is un­known, hous­ing ex­perts say. State law­mak­ers last year heard es­ti­mates that Los An­ge­les alone has about 300,000 gray-mar­ket units.

They of­ten sprout up un­der a city’s radar and pro­duce healthy in­comes for own­ers in the tight and ex­pen­sive Sil­i­con Val­ley rental mar­ket. A typ­i­cal le­gal onebed­room goes for $1,770 in Oak­land and $2,090 in San Jose, ac­cord­ing to Apart­ment List.

Granny flats vary in qual­ity, from decades-old home ad­di­tions or hap­haz­ard garage con­ver­sions to mod­ern apart­ments lack­ing only the proper pa­per­work for le­gal oc­cu­pancy. They can pro­vide a lower-cost al­ter­na­tive for work­ers, se­niors and res­i­dents on fixed in­comes.

Nava said many own­ers keep un­per­mit­ted units in good shape but fear the cost of up­grad­ing to the cur­rent hous­ing code. State reg­u­la­tions im­posed in 2013 re­quire high-en­ergy ef­fi­ciency stan­dards, of­ten ex­pen­sive

on smaller units.

San Jose has con­sid­ered an amnesty pro­gram, she said, but noth­ing has been set in place.

The quasi-le­gal apart­ments even con­found real es­tate agents and prop­erty man­agers.

If a unit is il­le­gal, it can make an owner li­able for dam­age from a fire or other neg­li­gence. A new ad­di­tion or other work re­quir­ing city per­mits can bring a drop-in by a city in­spec­tor — blow­ing the cover of an il­le­gal lease.

“Ba­si­cally, all it takes is the neigh­bor to file a com­plaint,” said Sandy Jami­son, a San Jose-based agent who has rep­re­sented sellers with un­per­mit­ted units.

Some­times an il­le­gal unit makes a prop­erty hard to sell, be­cause a new owner would have to bring it up to code or de­mol­ish it, she said.

De­spite the monthly rent, Jami­son said, “it’s ac­tu­ally de­tract­ing value.”

My­ron Von Raes­feld, CEO of real es­tate com­pany Win­der­mere Sil­i­con Val­ley, has brought sev­eral prop­er­ties into com­pli­ance. Lo­cal cities have been help­ful, he said, but new state ADU reg­u­la­tions have slowed the process as city plan­ners learn the new rules.

A client re­cently asked him for ad­vice on sell­ing a home in San Jose, Von Raes­feld said. The agent re­searched the prop­erty — the owner had added seven bed­rooms and bath­rooms, fill­ing the back­yard and some­how never draw­ing the at­ten­tion of neigh­bors or city in­spec­tors.

The owner made about $10,000 a month rent­ing the units on Airbnb, Von Raes­feld said. He ad­vised the man to tear down the ad­di­tion if he wanted to sell.

Von Raes­feld didn’t see it as an iso­lated case in Santa Clara County. “I think it’s pretty ram­pant,” he said.

Some cities have tried to wres­tle with the prob­lem of grand­fa­ther­ing the units, plan­ners say. A bill spon­sored by state Sen. Bob Wieck­owski, D-Fre­mont, would have cleared up some con­fu­sion, but it failed to pass last year.

Son­nen­shein and her part­ner, Adam Bai­ley, bought their three-bed­room East Richmond home on Fe­lix Av­enue in July 2015. The cou­ple paid $700,000 for the hill­side rancher, ad­ver­tised as hav­ing a le­gal in­law unit, she said,

They wanted to add a se­cond bath­room and in­ter­viewed sev­eral con­trac­tors and ar­chi­tects. Al­though

builders of­fered to do the work with­out per­mits, she said, the cou­ple in­sisted on keep­ing the work le­gal.

They sub­mit­ted plans to the county. A plan­ner checked the prop­erty and judged the 60-year-old apart­ment to be il­le­gal.

“This is re­ally com­mon,” said Deb­bie San­der­son, an ur­ban plan­ner and co­founder of Berke­ley’s ADU task force who is help­ing Son­nen­shein in her bat­tle, “and it’s com­ing to a head.”

Son­nen­shein be­lieves the two-bed­room in-law apart­ment was built legally, around 1955, by the orig­i­nal home­owner. But Con­tra Costa County has no land use per­mit — which would make the unit le­gal — from the 1950s.

Cir­cum­stan­tial ev­i­dence sug­gests the county did know about the unit, Son­nen­shein said. She dis­cov­ered a no­ta­tion of a work per­mit for the base­ment ad­di­tion — but no ac­tual per­mit — in pub­lic records dated three years af­ter the house was built. The county has long con­sid­ered it a du­plex on tax rolls, and Son­nen­shein con­sid­ers that fur­ther proof the county had ap­proved the ad­di­tion.

“If that had been il­le­gal, you don’t in­vite the as­ses­sor in,” Son­nen­shein said. “This was never hid­den.”

Al­though county plan­ners ac­knowl­edge an in­com­plete record of per­mits from the 1950s and 1960s, they say the house needs to be brought up to code.

Stan Mu­raoka, se­nior plan­ner for Con­tra Costa County, said the in­spec­tors were will­ing to al­low the unit if the cou­ple with­drew their re­quest for a se­cond bath­room. Son­nen­shein pulled the per­mits, but a neigh­bor filed a com­plaint and the county is­sued a vi­o­la­tion.

“She’s not alone,” Mu­raoka said. “We haven’t seen peo­ple run­ning in to le­gal­ize units.”

The case is in limbo, Son­nen­shein said. She hopes to prove the unit is le­gal and even brought the orig­i­nal home­owner’s daugh­ter into the house to ver­ify that no ma­jor changes had been made since her fa­ther built it.

And she has a stack of plan­ning pa­pers — old draw­ings, per­mits, tax records, re­ceipts and a new, red vi­o­la­tion no­tice — grow­ing in her home of­fice. “We did ev­ery­thing by the book,” she said. “If there was an easy way to up­grade, we’d do it.”

LAURA A. ODA — STAFF PHO­TOG­RA­PHER

Stacey Son­nen­shein learned that a base­ment apart­ment in her house may have been built with­out a per­mit in the 1950s.

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