Backyard Home / ADU in California (SoCal & NorCal)

[Milad Aria]

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.

[Kevin Keith Beck]

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