Homeowners in the Bay Area are building more in-law units due to an affordable housing shortage

If living in the Bay Area is expensive, retiring here is an even more daunting task. So an increasing number of older residents are turning to so-called in-law units as a way to stay, and remain close to family and friends.

Michael Stone’s second home sites behind his first, in San Jose’s Rose Garden neighborhood. It’s a 500 sq. ft. accessory dwelling unit (ADU) built by Gold Bar Builders, commonly called an in-law. Construction was completed in January, and now Stone is planning for the short and long-term. Early on, a rental to supplement income, and later, a future home for himself and his wife, when three-year-old daughter Linnea or her little brother are ready to take over the main house.

“That’s very possible. The way the housing situation is currently, and seemingly not getting any better, I often wonder what is the future of Linnea or my son Michael, here?,” said Stone.

The Stones’ are part of a growing South Bay trend, created by a shortage in affordable housing. Increasingly, retirees, or those planning for the future, are building in-law units. Acton ADU founder Stanley Acton said demand has always been simmering along with the hot housing market.

“What they’re looking for is a comfortable, close proximity to have this family support to have this investment place,” he said.

San Jose city officials say applications to build in-laws has spiked over the past few years, from 16 in 2016 to 350 last year. Mayor Sam Liccardo, (D) San Jose, led city council efforts to streamline the construction process.

“The challenge for us now is actually getting those applications over the goal line and actually getting the units built. So what we really need to do is to see how we can lower costs, reduce fees and get out of the way,” said Liccardo.

The cost of an in-law can be considerable. You’re actually building a separate home with its own plumbing and electric, so prices can range from $200,000 to $1M. And annual city fees in san jose escalate depending on the size of your property.

Both builders and city leaders say ADU’s won’t solve the current housing crisis, but it could grow into an important component to ease demand.

“We think there could be a real opportunity to create affordable housing for the entire community,” said Liccardo.

A community that continues to evolve, to meet the growing need for a place to call home and stay close to loved ones.

“We kind of envision ourselves wanting to stay here in San Jose,” said Stone.