Upgrade Question: Should I lift my house or dig deeper?

Question

My family got a property in Oakland CA. The first floor of the home is too low to qualify as a separate unit. It is around 12 inches too short. Also, the first floor is already 20 inches below ground level. So, which option is better? Lift the house or dig deeper?

Another question is when should we upgrade? Currently, there is a construction boom in Oakland, making labor and material more expensive. Should we wait for a down period to do this upgrade?

Thanks.

Louis W. · Answer

Thanks for responding to my question.

-The first being, what part of Oakland are you in?

8th Ave and Foothill. My zoning is RM-3. It seems that duplex is permitted.

"The RM-3 Mixed Housing Type Residential Zone intent is to create, maintain, and enhance residential areas characterized by a mix of single family home, duplexes, townhouses, and small multi-unit buildings at somewhat higher densities than in RM-2."

-Second, what are your goals with the property?

I want to increase Rent. Right now, the city said that first-floor unit is not legal because the ceiling is too low.

-Flip, live in and enjoy, refi/equity line to access the equity?

Rental income.

-Lastly, What is the existing configuration of the house and what is the existing footprint and lot size?

2 floors. Almost 2000 sq ft

The first floor is 2 room 1 bath

The second floor is 3 room 1 bath

Hans Christopher Struzyna · Answer

Hey @Louis W. there are a few questions you should answer before you embark on a project like this. The first being, what part of Oakland are you in? Price per sqft varies wildly from one neighborhood to the next. Second, what are your goals with the property? Flip, live in and enjoy, refi/equity line to access the equity? Lastly, What is the existing configuration of the house and what is the existing footprint and lot size? This is important because the sqft you add to the property will be more valuable if the house is at or under 1200 sqft than if its already 1600+. People really tend to value the first 1200 sqft the most then the prices go down from there. As well, you may be restricted with setbacks, parking requirements and lot size/sqft ratios depending on the specifics of your property and the goal of your project.

What you are suggesting is a very popular strategy that many investors are using these days. I'm seeing this all the time now. Labor and materials are definitely expensive at the moment and the key is to find a reputable contractor. I have a few to recommend should you want that referral. Depending on the footprint of the house, you could possibly cut the slab and leave 12-18 inches (I'm not exactly sure what code would require) from the foundation, and pour a new foundation inside the new cut that would help you meet the required ceiling height. You end up with really thick walls and deep window wells but this could be a much less expensive option than lifting the house.

Another thing to consider is creating an ADU out fo the ground floor unit. This can add substantial value and you may be able to do that job for less than you might imagine (because you don't need an internal staircase necessarily).

I hope this helps. Feel free to DM me if you want to chat further!

Good luck,

Hans