Bay Area backyard cottages boom as elderly parents and college students flee coronavirus

San Francisco Chronicle, by J.K. Dineen, July 4, 2020

Bay Area companies that specialize in backyard cottages are seeing a surge in interest from homeowners who suddenly need to create additional living space for elderly parents or adult children displaced because of the coronavirus.

Some families are scrambling to move their parents out of assisted-living facilities, where the risks of contracting the coronavirus are high. Other erstwhile empty-nesters find themselves crowded as their young adult kids return from shuttered college campuses or look to escape small apartments in expensive cities like San Francisco or New York.

After California lawmakers embraced a series of statewide bills in 2017 to streamline building backyard cottages — also called accessory dwelling units or ADUs — the number of new units approved exploded to more than 7,000 in 2018, 50% higher than 2017. For many suburban residents, the backyard homes were seen as a more palatable answer to the housing crisis than large apartment buildings. But in a state that should build millions of homes to keep up with demand, critics said the cottages are a distraction from the need to build multiunit buildings at scale.

Abodu, a San Jose firm that makes ADUs, estimates that 10,000 will be permitted in California in 2020, based on a survey of city permits.

Adobu has seen orders for modular cottages more than double since the pandemic began, according to CEO John Geary. The units start at about $199,000, and with finishes, most come in at about $220,000.

Another manufacturer, Sonderpods of Novato, had 3,000 visits to its website in the 90 days before the shelter-in-place order in March, but has seen that number jump to 25,000 over the last 90 days. Within a few weeks of the health order, the company had signed seven contracts to deliver backyard cottages and was negotiating an additional 92 deals. Sonderpods average about $139,000.

“We are sprinting to keep up with things,” said Edward Stevenson, CEO of Sonderpods.

Hank Hernandez, who owns Alameda Tiny Homes, said he has been flooded with inquiries.

“I get calls all day, every day,” he said. “The basic request is, ‘I want to put my parents in my backyard as quickly as possible.’”

Before coronavirus, Redwood City resident Jen Parsons was exploring options for her widowed mom, who was looking to downsize from her longtime home. She was exploring nearby retirement communities and possibly buying a bigger house that could accommodate three generations when the pandemic hit. Suddenly there was a pressing need. With two young kids, Parsons didn’t feel safe moving to an unfamiliar neighborhood in the middle of a pandemic and was not keen on moving her mom to a senior housing complex.

“You hear all these stories about retirement communities being on lockdown — you can’t even take your elderly parent to lunch or dinner, only to doctors appointments,” she said.

Instead, they decided to purchase an Abodu AD unit, which will arrive in August or September.

“Having an ADU unit back there for my mom will feel like a safe and peaceful environment at a time when there is a lot of stress because of COVID-19,” she said. “We can meet her in the patio and have snacks.”

Faysal Abi, a retired police officer and yoga teacher in Redwood City, also ordered an Abodu. He said that the unit will provide housing for a friend who needs a place to live.

“A friend fell on hard times, and the Bay Area isn’t exactly cheap,” he said. “I feel like community is something we are lacking, especially since coronavirus. There is more isolation. One way to heal the world right now is through more community and knowing your neighbors and staying connected. I feel this will help accomplish that.”

Abi also persuaded his mother, Rabina Abi-Chahine, a 62-year-old social worker, to buy her own backyard cottage for her home in Millbrae. Abi-Chahine said she was motivated both by a desire to create some income as she approaches retirement and having a spot for her own father some day.

Geary said another client, a Palo Alto woman, had two children away at college suddenly return, joining two other teenagers at home, which immediately made the house feel crowded.

Stevenson, the CEO of Sonderpods, said that 70% of customers are older than 55 and 70% are women building units on their kids’ properties.

“A lot of it is Baby Boomers selling the family home and moving in into their kids’ backyards. People are re-evaluating what is important and trying to bring the family closer together,” he said. “We are not seeing a lot of people who are straight-up looking to make income.”

Thanks to a series of state and local bills, ADUs can be built relatively quickly with limited bureaucratic hassle in some cities. San Jose, which has been aggressive in encouraging the tiny homes, has seen permitted ADUs jump to 691 last year from 24 in 2014. So far this year, 321 applications have been filed.

The Abodu was the first ADU manufacturer preapproved by the city of San Jose — which cut multiple inspections and red tape. From the day the permit is pulled, Abodu can have the unit installed within 12 weeks.

Hernandez of Alameda Tiny Homes said that while his business has been steady for the past few years, clients’ motivation has changed. It used to be that most homeowners were looking for extra income. Now it’s to meet family needs.