Backyard Home / ADU in California (SoCal & NorCal)

Backyard Home / ADU in California (SoCal & NorCal)

Concord, CA · Member since 2018 · 9 posts · 4 votes

I'm looking into importing prefab / modular houses from China to be used here in California as backyard homes / ADUs. Planning to get them permitted and certified for California and meet or exceed current codes so when they arrive here they are pretty much good to go. I'd like to get started by focusing on 1 or 2 models and would love to hear your feedback to understand what type of model / material / structure you think is in demand for ADUs and what size range seems to be more popular with folks when building an ADU. (For example steel or wood, prefab kits or modular / shipping container homes , 200-400 sqft or 500-800 sqft , etc. ) Any feedback, ideas or suggestions would help a lot. I'd love to hear your experience with building an ADU in CA whether it was for yourself, family and friends or clients.

Also a little bit of background about myself in case you wonder, I'm an electrical / software engineer (MSEE, CE, patent holder) who has worked in several big tech companies as well as manufacturing environment before and been to China several times. I'm also an entrepreneur and have done eCommrece and imported from China before so I'm pretty familiar with the process and would like to get into prefab / modular house market specially with the new CA ADU regulations in place.

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Flipper/Rehabber · Escondido, CA · Member since 2018 · 49 posts · 51 votes
7y

Milad / All,

California has made some lofty energy and environmental goals for itself for the future. These goals, according to the California Public Utilities Commission (CPUC) are as follows:

As spelled out in the California Energy Efficiency Strategic Plan, the state has ambitious goals for the development of zero net energy buildings. These include:

-All new residential construction will be zero net energy (ZNE) by 2020.

-All new commercial construction will be ZNE by 2030

-50% of commercial buildings will be retrofit to ZNE by 2030

-50% of new major renovations of state buildings will be ZNE by 2025.

In this effort, ALL of California's cities and communities have had to adopt, follow, and or create energy goals to align with these targets. Part of that effort was a push from the State to ease up on rules concerning Auxiliary Dwelling Units (ADUs).

As of January 1, 2018:

"New laws effective January 1, 2018

Recent state legislation provides clarification and fee assistance for the creation of ADUs. Governor Brown signed two separate bills on October 8, 2017: SB 229 (Wieckowski) and AB 494 (Bloom).

These bills, effective January 1, 2018, clarify and improve various provisions of the law to promote the development of ADUs, including allowing ADUs to be built concurrently with a single-family home, opening areas where ADUs can be built to include all zoning districts that allow single-family uses, modifying fees from utilities, such as special districts and water corporations, and reducing parking requirements. Please see the HCD Technical Assistance Memorandum: Accessory Dwelling Unit Legislation (SB 229 & AB 494) (PDF), dated May 29, 2018, for further information."

Because of these efforts by the state, legalizing existing ADUs (typically these used to be "shadow income" from non-conforming units), and building brand new ones should be a lot easier. I have heard of many communities that are foregoing permit fees to encourage homeowners to have their "granny units" legalized. Sure, this is to increase tax revenue, but it's also a way for us REIs to increase equity in our properties that may not have been possible before.

Milad, the BIG question I would be asking VERY quickly before devoting a lot of time in figuring out how to get them shipped here is, "how will these units pass California's strict building and energy codes?" Even though there may not be permit fees involved, California will still require these ADUs to comply with our code.

I have, as an Energy Inspector for the State, inspected modular homes in a factory within California that were being built and shipped inside the state. They had to pass a QII (quality insulation installation) test mandated by the state for this particular application. They did NOT pass and ultimately failed three more times. Now, I as the HERS Inspector, was paid by the factory three separate times for driving out there and failing them three times. If they didn’t pass their insulation quality tests, they couldn't finish building the modular home (close-up the walls)! How would these inspections be accomplished in China?  Are you flying the Inspector there? By the way, QII has been a “credit” elected by some California builders but may become MANDATORY in the near future as California strives to reach its energy goals. As an inspector and retired building contractor I can tell you, the building industry is NOT ready for this requirement.

Just so you know, I love your idea and support ADU inclusion as a BP strategy, but I caution you about passing codes and other inspections, especially something built out of the country. I'm sure IKEA will be struggling with this as well within California.

There is a great origami-type modular builder up in the bay area who has mastered production line modular structure building and erection. Their units are built in an old submarine factory and shipped via truck to sites where they are unfolded and erected in a matter of days. Check them out here: https://www.bluhomes.com/. Their units are designed as an option to typical site-built homes, not necessarily ADUs. However, the “methodology” is the same; build off-site under controlled conditions and take advantage of assembly-line building practices. Then ship and erect in minimal time. The cost is about the same ironically, but the environmental impact is huge. Think about all the gas saved from all those trucks that never had to drive to the job site. These modular homes are erected on site by factory installers in a matter of days.

This is something to keep in mind for ALL BPers. A lot, not all, of ADU enthusiasts will be somewhat environmentally friendly-types. They care about how and with what their homes are built. They trust our laws concerning building products and applications. They are less comfortable buying goods from countries who don't have our strict laws about how and with what products are made. This is where I see the Achilles heel of your idea. These "environmental" buyers are savvy and will not favor a product being shipped from elsewhere. They're more apt to buy from local vendors.

Other homeowner and investors, of course, will focus on the income potential and or savings. Money in pocket. They are right too. It is simply easier to build anything under a factory roof. Home construction is the last industry that has failed to accomplish this transition. When a product can be assembled without concern for outside weather conditions, they are typically built faster and more efficiently than conventional site built. Craning in these ADUs is not impossible for most sites as long as the modules are not too heavy.

In any event, I wish you much success. Let me know if I can help.

Sincerely,

Kevin Beck

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  • Garden Grove, CA · Member since 2017 · 50 posts · 19 votes
    7y

    Interesting concept. 

    How much of a price difference is China compared to Chino?

    My thinking is that an Ikea type [boxed up, kit type] would be more feasible in denser areas. Most ADU's have to fit on the back of a lot and its tough to transport or place on property. [Unless you can crane it in or something.

    Ground up is probably the most expensive but most feasible.

    I would think the permit process and the sewer and utilities makes up a large cost and that is hard to get around.

    We are looking at doing ADU conversions.

  • San Diego, CA · Member since 2017 · 14 posts · 8 votes
    7y

    Check www.mightybuildings.com I think they are already doing this

  • Concord, CA · Member since 2018 · 9 posts · 4 votes
    7y

    @Account Closed thank you for your helpful feedback! as far as costs still have to figure out the details in terms of cost specially after compliance with the code requirements, etc. At this point I'm trying to narrow down to 1 model and trying to decide what would be the most useful and popular option. For example should it be timber / steel? should it be modular, panelized or kit? what size range would best address the ADU demand? should it be modern design or just something that fits with the overall current architecture? those are the type of questions I'm trying to answer right now.

  • Concord, CA · Member since 2018 · 9 posts · 4 votes
    7y

    @Dmytro K. thank you for sharing this! Yes I also came across their ad and website a while ago, they are using 3D printing and is basically a modular model much similar to a shipping container house but 3D printed and with different type of material that they deliver and use a crane to put it on the foundation. So do you think that would be the best route? focusing on a modular / container shipping model would be the most feasible in-demand option?

  • Kevin FoxPro Member
    Real Estate Agent · San Diego, CA · Member since 2014 · 1k+ posts · 635 votes
    7y

    Hey @Milad Aria

    This is definitely an interesting topic that I’ve seen kicked around on the forums a handful of times over the years.

    From what I can remember, I know several (likely the majority) of those considering the strategy ran in to obstacles they viewed as insurmountable/unworthy of the time/effort/money required.

    That said, I do recall a few that found a way to make it feasible/profitable and your experience with imports/manufacturing likely gives you a leg up on your average investor.

    I’d be very interested in seeing your  plan/number crunch if you’re confident in your ability to make it work. 

    In regard to the most desirable/in demand type/model/finishes - as is the case with just about everything in REI, that will greatly depend on the sub-market in which you're looking to do this.

    I know you said California, but are there any particular regions/cities/neighborhoods you’re considering? 

  • Concord, CA · Member since 2018 · 9 posts · 4 votes
    7y

    @Kevin Fox thank you so much Kevin for your feedback and insight. I did some preliminary calculations and there seems to be a potential to make it work however it depends a lot on details such as material, model, size, etc. that's why I decided to focus on that first and narrow down my options to make this feasible. 

    As far as sub-market being concerned I'm still working on this, and everyones feedback and thoughts would help a lot with this. For example since you are an Real Estate Agent in San Diego does any specific type, model, size of ADU keep popping up in conversations with clients, contractors, colleagues, etc. that seems to be getting more traction that others?

  • Flipper/Rehabber · Escondido, CA · Member since 2018 · 49 posts · 51 votes
    7y

    Milad / All,

    California has made some lofty energy and environmental goals for itself for the future. These goals, according to the California Public Utilities Commission (CPUC) are as follows:

    As spelled out in the California Energy Efficiency Strategic Plan, the state has ambitious goals for the development of zero net energy buildings. These include:

    -All new residential construction will be zero net energy (ZNE) by 2020.

    -All new commercial construction will be ZNE by 2030

    -50% of commercial buildings will be retrofit to ZNE by 2030

    -50% of new major renovations of state buildings will be ZNE by 2025.

    In this effort, ALL of California's cities and communities have had to adopt, follow, and or create energy goals to align with these targets. Part of that effort was a push from the State to ease up on rules concerning Auxiliary Dwelling Units (ADUs).

    As of January 1, 2018:

    "New laws effective January 1, 2018

    Recent state legislation provides clarification and fee assistance for the creation of ADUs. Governor Brown signed two separate bills on October 8, 2017: SB 229 (Wieckowski) and AB 494 (Bloom).

    These bills, effective January 1, 2018, clarify and improve various provisions of the law to promote the development of ADUs, including allowing ADUs to be built concurrently with a single-family home, opening areas where ADUs can be built to include all zoning districts that allow single-family uses, modifying fees from utilities, such as special districts and water corporations, and reducing parking requirements. Please see the HCD Technical Assistance Memorandum: Accessory Dwelling Unit Legislation (SB 229 & AB 494) (PDF), dated May 29, 2018, for further information."

    Because of these efforts by the state, legalizing existing ADUs (typically these used to be "shadow income" from non-conforming units), and building brand new ones should be a lot easier. I have heard of many communities that are foregoing permit fees to encourage homeowners to have their "granny units" legalized. Sure, this is to increase tax revenue, but it's also a way for us REIs to increase equity in our properties that may not have been possible before.

    Milad, the BIG question I would be asking VERY quickly before devoting a lot of time in figuring out how to get them shipped here is, "how will these units pass California's strict building and energy codes?" Even though there may not be permit fees involved, California will still require these ADUs to comply with our code.

    I have, as an Energy Inspector for the State, inspected modular homes in a factory within California that were being built and shipped inside the state. They had to pass a QII (quality insulation installation) test mandated by the state for this particular application. They did NOT pass and ultimately failed three more times. Now, I as the HERS Inspector, was paid by the factory three separate times for driving out there and failing them three times. If they didn’t pass their insulation quality tests, they couldn't finish building the modular home (close-up the walls)! How would these inspections be accomplished in China?  Are you flying the Inspector there? By the way, QII has been a “credit” elected by some California builders but may become MANDATORY in the near future as California strives to reach its energy goals. As an inspector and retired building contractor I can tell you, the building industry is NOT ready for this requirement.

    Just so you know, I love your idea and support ADU inclusion as a BP strategy, but I caution you about passing codes and other inspections, especially something built out of the country. I'm sure IKEA will be struggling with this as well within California.

    There is a great origami-type modular builder up in the bay area who has mastered production line modular structure building and erection. Their units are built in an old submarine factory and shipped via truck to sites where they are unfolded and erected in a matter of days. Check them out here: https://www.bluhomes.com/. Their units are designed as an option to typical site-built homes, not necessarily ADUs. However, the “methodology” is the same; build off-site under controlled conditions and take advantage of assembly-line building practices. Then ship and erect in minimal time. The cost is about the same ironically, but the environmental impact is huge. Think about all the gas saved from all those trucks that never had to drive to the job site. These modular homes are erected on site by factory installers in a matter of days.

    This is something to keep in mind for ALL BPers. A lot, not all, of ADU enthusiasts will be somewhat environmentally friendly-types. They care about how and with what their homes are built. They trust our laws concerning building products and applications. They are less comfortable buying goods from countries who don't have our strict laws about how and with what products are made. This is where I see the Achilles heel of your idea. These "environmental" buyers are savvy and will not favor a product being shipped from elsewhere. They're more apt to buy from local vendors.

    Other homeowner and investors, of course, will focus on the income potential and or savings. Money in pocket. They are right too. It is simply easier to build anything under a factory roof. Home construction is the last industry that has failed to accomplish this transition. When a product can be assembled without concern for outside weather conditions, they are typically built faster and more efficiently than conventional site built. Craning in these ADUs is not impossible for most sites as long as the modules are not too heavy.

    In any event, I wish you much success. Let me know if I can help.

    Sincerely,

    Kevin Beck

  • Concord, CA · Member since 2018 · 9 posts · 4 votes
    7y

    @Kevin Keith Beck Thank you so much Kevin for your thorough and detailed comment communicating key factors and potential challenges. I have also heard about the ZNE and noticed a few other builders / factories in the states have also implemented that into their product but not all. I believe this can be achieved by adhering to best practices in design as well as material being used for short-term. Of course long / medium-term once this becomes mandatory by CA and depending on how it unfolds we may or may not have to fly an inspector to the factory for complete inspection and licensing. 

    You have a good point here as this will be an important factor in design and choosing the right material and even size and style. Not just for compliance with ZNE but also for creating an environmental-friendly product that could become a win-win-win situation for the customer, vendor and the sate. I will definitely keep an eye on this and will use any opportunities to implement it into the product as much as possible. 

    That being said I'd love to hear your feedback based on your personal experience in terms of what type of method, material, style and size you think is gaining more traction and seems to be the most feasible option for ADUs in CA. This will help further narrow down options and better focus on the next steps in terms of getting it pre-engineered and pre-approved and best practices / product improvements such as implementing ZNE into the product.

  • Investor · Bay Area, CA · Member since 2017 · 85 posts · 35 votes
    7y

    I am in San Jose and I am trying to put one of SFH rental with ADU. By studying the city of San Jose's ADU rule, it seem to be qualified 700sf 1bed ADU. I plan to do it asap. However, I have a hard time to find contractors, architect to do the jobs. Any resource could make it done quickly would be good for me at this point.

  • Flipper/Rehabber · Escondido, CA · Member since 2018 · 49 posts · 51 votes
    7y

    Milad,

    The "most feasible" question is a tough one to answer for ALL of California for multiple reasons.

    Each City, Town, and Municipality will have their own “Playbook” when it comes with how they’ll deal with impending energy codes. Some will reduce or forgo building permits for ADUs while others may simply “fast track” the permit process but their fees will remain the same. The challenge to California’s Building Departments is that they have typically generated income by charging fees for various aspects of the building process from plan review to inspections for each phase of construction. These fees are usually based on the square footage as the “old” code mandated 1,000 square foot+ minimums when designing single family homes. Thus, Building Departments were assured a base fee and could extrapolate projected income. Builders and designers of high-performance structures, Passive-House certified homes, Tiny Houses, and Net Zero construction know that square footage should NOT be a factor in establishing fees for building departments. Especially in our energy saving furor here in California.

    Don’t get me wrong, smaller square footage doesn’t necessarily mean more energy efficiency. I wrote an article once about Tiny Houses and the challenges they face trying to fit into a code-enforced building world. In the article I found varying opinions about a Tiny House’s energy consumption. A good friend of mine who is also a Passive House Designer (IMO the BEST constructed building shells on the planet) reminded me that there is a “sweet spot” when designing a super-efficient shell and it’s less about square footage than it is about volume. The beauty of a Passive House -Certified home is that the energy modeling is spot on. You’ll know exactly what the energy consumption is before you build and be able to “edit” the structure to get what you want. Which leads me to my next question, “what do you want to offer and for whom?”

    Even if you tried to design a perfect shell for all of California, you couldn’t. The code wouldn’t allow it. There are multiple “climate zones” in California, each requiring their own base set of specifications. That’s the unique problem/benefit of our code here, it’s climate zone specific. Let me explain. Say you wanted to build a modular home that will end up sitting on a permanent foundation built with the exact same materials, construction processes, and finishes. You’d like that home to be able to be sold in any area of California including mild coastline communities and dry/hot desert cities. The Code would MAKE YOU design for the worst climate zone possible IF you did not create a custom “recipe” for each structure as you built them. One for the desert, one for the coast and so on. See the problem?

    That is why the Tiny House movement has gained momentum. They are NOT foundation-tied homes. Tiny House on Wheels (T.H.O.W.) are built on movable trailers and therefore are not constrained to any of the 50 state building codes. They have to abide by either the travel trailer industry codes or the manufactured homes codes and regulations. Going this route with your idea may be challenging as ADUs are typically considered part of the property and not movable as with Tiny Houses.

    Many jurisdictions are still wrestling with what to do with decreasing square footage demands and tiny houses. We’ll see how this plays out.

    As for materials, many designers have taken advantage of the hundreds of thousands of shipping containers unused throughout the world. Most don’t realize it, but shipping containers are seldom “returned” for reuse in some countries and simply add to huge piles of unused boxes. Designers have utilized these steel boxes for time-saving home builds. It’s also an extremely environmentally-friendly approach to the build process as you are re-utilizing the materials, energy, and time it took to make these containers in the first place and many are already insulated to transport refrigerated goods. They also make shipping them easy from any country in the world as they are already built for this purpose. The challenge with converting shipping containers to livable spaces is that now you must bring a steel worker onto a site typically staffed with carpenters. One knows wood, the other steel. Best case scenario, you find a team who can seamlessly blend both.

    Container-conversions can be stacked, shifted, even placed on end creatively but a lot of engineering is necessary if “optional layouts” become too lengthy. This (container-conversion) engineering is also challenging to convey to Building Departments as they are more familiar with sticks and stones construction practices. It may be best to configure a couple layouts/designs and perfect these rather than try to satisfy every application?

    Another option is “skid-based” construction where a whole (small) structure is built on skids (6x wood beams) that support the structure during construction, the transport, and final resting of the building on the site. These skid-based buildings can be carried by flatbed trucks and craned over houses to rest in the back yards. Of course, size and weight will affect transport requirements and craning ability.

    Kit homes are an interesting idea. I saw some Tiny Houses at a Tiny House Jamboree once that were brought in on a flatbed trailer in pieces. These pieces were larger sections of SIPS (structurally insulated panels) that were the walls, floor, and ceiling of the whole structure. These puzzle pieces were reconstructed before our eyes in one day by a four-man crew and small crane to form a complete tiny house. I’m sure it would be a lot easier to lift multiple sections over a house than one BIG box?? This is the manufactured house methodology used in Ireland and throughout Europe as the deliver packaged Passive Houses to sites and re-erect them onsite in days.

    There is obviously a lot to consider. How to build? With What? For who? Etc. The clearer you become about the concept and target market, the better.

    Know thy buyer!

    Kevin

  • Concord, CA · Member since 2018 · 9 posts · 4 votes
    7y

    @Jim G. Thank you for sharing this. I'm currently in Concord so not too far from where you are and have a lot of friends in San Jose (I used to live there and in Morgan Hill) maybe we could work together to come up with a solution for you and people with similar situation. I will message you and we can discuss further. 

  • Architect · Los Angeles, CA · Member since 2018 · 27 posts · 20 votes
    7y

    @Jim G.

    I can assist you in designing your ADU in San Jose. I normally work on single family homes but have designed (4) ADU's in Southern California in just the past two years. I am looking to expand in the NorCal region so if you are interested to connect feel free to PM me. That goes to anyone looking to build an ADU or single family homes, I am here to serve.

  • Concord, CA · Member since 2018 · 9 posts · 4 votes
    7y

    @Kevin Keith Beck thank you so much Kevin for your thoughtful and thorough comment and sharing ideas and posing important questions and challenges. You are absolutely right these are all good options to consider and challenges are real. I'm also trying to get a better understanding of the market needs when it comes to ADU and create an accurate portfolio of the ideal buyer. That's one of the reasons I started this conversation so that our collective wisdom and experience could lead us in the right direction or at least gives us some pointers where to focus time and energy on.

  • Flipper/Rehabber · Escondido, CA · Member since 2018 · 49 posts · 51 votes
    7y

    Right On Milad!

    Forward!

    Kevin

  • Seattle, WA · Member since 2017 · 29 posts · 15 votes
    7y

    Thank Milad for kicking off the discussion. I'm working with a container manufacturing company in Vietnam which also builds multiple container homes around the US, AUS, and NZ. I'm working with them in few projects right now around the US and from my past experiences, if we would bring to them the details building codes, we would do most of the work over there in the factory and take advantage of the low labor costs there. 

    The last project I helped with, which is in the sample building process right now, the unit will be built 90% in Vietnam, ship to the US and will finish with the exterior siding and electrical panel. The unit ranges from 2,3 bedrooms to a simple studio. The unit would be built by using one 40' container or merging multiple containers together. 

    By the way, I'm working in Seattle as a software engineer as well and have been thinking about business models around ADU as well using this prefab homes for surround areas or in areas with a competitive housing market.

  • Concord, CA · Member since 2018 · 9 posts · 4 votes
    7y

    @Minh Dong thank you Minh for sharing your experience on this. Shipping container home definitely seems to be an option to consider. I'll PM you we might be able to collaborate. 

  • Real Estate Appraiser · Isabella lake, CA · Member since 2018 · 628 posts · 491 votes
    7y

    I thought about putting an old railroad caboose in back and fixing it up for an office.

    But it would have to be craned in, if the city would even allow it. Would not be big enough for an ADU. Too expensive to be worthwhile. But could be fun.

  • Kevin FoxPro Member
    Real Estate Agent · San Diego, CA · Member since 2014 · 1k+ posts · 635 votes
    7y
    Originally posted by @Milad Aria:

    @Kevin Fox thank you so much Kevin for your feedback and insight. I did some preliminary calculations and there seems to be a potential to make it work however it depends a lot on details such as material, model, size, etc. that's why I decided to focus on that first and narrow down my options to make this feasible. 

    As far as sub-market being concerned I'm still working on this, and everyones feedback and thoughts would help a lot with this. For example since you are an Real Estate Agent in San Diego does any specific type, model, size of ADU keep popping up in conversations with clients, contractors, colleagues, etc. that seems to be getting more traction that others?

    My pleasure, Milad. I can certainly understand your reasoning for going about the process in that order.

    As for your question- I will have to revert back to the answer I gave in my last response. Even within San Diego, each particular neighborhood will be different from most others. 

    For instance, in a neighborhood like National City, affordability of materials and maximizing living space within the unit will be key. Curb appeal and making the home seem less like a manufactured home will primarily be secondary concerns. 

    In a neighborhood like North Park, however, focusing on aesthetics/trendiness and minimizing the “cheap” feeling commonly associated with manufactured homes will be critical to your success.

    With that in mind, I would think this strategy would be better suited for more blue collar neighborhoods/markets where housing affordability is paramount to renters’ decisions, but I don’t know enough about the quality/price of available manufactured units to say that definitively.

  • Concord, CA · Member since 2018 · 9 posts · 4 votes
    7y

    @Kevin Fox thank you for your great feedback and helpful insight. That makes sense, his actually helps a lot with narrowing down options and focusing on a more defined market. 

  • Member since 2019 · 2 posts · 0 votes
    7y

    @Minh Dong: I have a house in Pleasanton CA with big lot 9000 sqft. I am planning to have an ADU 800 sqft 2 beds 2 baths. Please PM when you have a chance. Thanks

  • Jo-Ann LapinPro Member
    Loan Officer · Tustin, CA · Member since 2015 · 3k+ posts · 713 votes
    7y

    Thank you for posting this . So helpful . Would like to here an outcome with your successes .

  • San Diego, CA · Member since 2017 · 14 posts · 8 votes
    7y
    Originally posted by @Dmytro K.:

    Check www.mightybuildings.com I think they are already doing this

     BTW found another company doing this https://passivdom.com/specifications/

  • Rose JonesPro Member
    Member since 2019 · 57 posts · 18 votes
    3y

    California (where I currently live) makes everything so hard. My parents had a "little house" on their property that they would rent out off and on for years. Such a nice way to add income. 

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