Startup helps Bay Area homeowners split their properties to add new housing

New law helping ease Bay Area housing crisis and financial woes for some homeowners

SAN JOSE -- Gail Tremaine and her husband bought their San Jose property in the late 1970s. It's where they want to age in place.

"You know we all need a place to get away and be able to relax and decompress and this does it for me. So always has," Tremaine said.

There's a plethora of trees to prune. So many of them that they wanted to split their lot decades ago, but it wasn't legal until two years ago, when Senate Bill 9 (SB9) gave homeowners a green light to split their lots and build up to four homes on a single-family parcel.

"This is going to give us a chance to be able to pay off, finally, the last part of our mortgage," Tremaine said.

As state laws are tinkered and tweaked to address the housing shortage in California, homeowners are finding more options to split and sell their backyards.

The cash Tremaine and her husband are set to receive by giving up 40% of their lot will provide some security, as Gail's husband deals with health issues.

Instead of navigating on their own the complex maze of permits and upfront fees, Tremaine found a Oakland-based company called BuildCasa to help.

"We focus on YIMBY cities that want more housing and recognize the problem and are generally favorable to missing middle development," said Ben Bear, co-founder of BuildCasa, which does the work to split the lot and sell to the highest bidder.

Homeowners get cash in exchange.

BuildCasa can also build starter homes for sale on the newly-created space using its own financing, giving homeowners the option to buy the units for rental income or for a family member to live in.

"You're creating a new option for people that we really view as a new version of the American dream, where people in that middle-income range can afford to buy a home in California again," Bear said.

Muhammad Alameldin works on policy at the Terner Center for Housing Innovation at UC Berkeley. He says it's too early to determine the impact companies like BuildCasa will have on the housing crisis.

"They are working within the bounds of something that hasn't been legal for the last 40 to 50 years, so there might be some hiccups along the way," Alameldin said.

Alameldin believes there is potential to create more housing if lot-split laws are simplified within the more than 500 local jurisdictions across the state.

"If the legislature follows the formula that they've done with accessory dwelling units, where they keep refining the legislation every year, making it easier and easier for more people to pursue lot-splits then we will find that more units are being constructed," Alameldin said.

Analysis from the Terner Center shows there are some 700,000 parcels in California that could be split under SB9 as the state faces a current shortage of 3.5 million homes.

"I think any housing that is built in California and particularly in Santa Clara Valley at the moment is a good thing," Tremaine said.

It's giving her family confidence they're doing their part in this housing crisis.

The Tremaines are also considering putting an accessory dwelling unit (ADU) on their existing property for rental income.

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