Santa Cruz Real Estate  Digest,  Ed. 18
February, 2017 - In This Issue:
In This Month's Issue
In this month's Digest you will find national and local news as well as informational pieces on topics that we have found to be increasingly important in the real estate industry. 

In last month's digest, we told you a little bit about our use of Social Media to sell your house. Take a look at a live example below. 

ADU's just got even easier to build. In response to our State-wide housing crisis, Senate Bill 1069 has come into law and our local governments have had to revise their ADU ordinances. Read below to learn more and find out if building an ADU just got a little easier for you. 

We've been writing about our state-wide and county-wide housing shortage for what seems like a while now... The good news is that there is  development happening in Santa Cruz and we expect to see an increase in affordable housing and rentals over the next few years. Take a look at some of these projects below.

Energy building codes have changed and the government is estimating that we will see 28% higher energy savings than we did with previous standards. Read why we think you should know about this important change below.

3D printed homes may be on their way. One company has developed a sophisticated and commercial viable way to build a single family residential home in 20 hours. This will clearly impact our construction industry, read about the pros and cons  below. 

Real Estate Market Statistics 
For Santa Cruz, Santa Clara, and  Monterey

The reports contain median home prices, real estate price statistics, valuable information about mortgage rates and much more.

Social Media Marketing In Action

Last month, we told you that we use paid Facebook advertisements to get your property unparalleled exposure. This month, we'll show you how. 

If you're on Facebook and have liked our page Schneider Estates (if you haven't, you should!), you may have seen our newest listing: 1700 Escalona Dr. Unit F, Soquel, CA 95073. 

If not, you can see the post here

This is an example of the Social Listing Method in action. On this ad alone, 30 people have clicked on the ad-link to request more information about the property. According to Facebook's Ad Results Report, thousands of people have seen this ad. This is just one of three ads that we ran for our listing. That is significant exposure! After providing their information, potential buyers are able to see property videos and photos on this one-page site.

We also used the Open-house Facebook Ad method to market this property's open house (see it here). As a result the event was highly successful, with over 20 people coming to see the property and many commenting that they saw it on Facebook.

Finally, we used an Instagram "Coming Soon" post and "Video Tour" post to increase exposure. See them here and here .

After building a buzz around this property, we have received multiple offers.  This is the power of social media. 

If you'd like to know how we can market your property using Social Media, please give us a call.

Changing ADU and Secondary  Unit Laws

In response to our state's housing shortage, Governor Brown has signed Senate Bill (SB) 1069, which will make it easier, and for some, less expensive to develop Additional Dwelling Unit's (ADU's).

In response to this Senate Bill, both Santa Cruz County and City have amended their ADU related ordinances. We report on major ordinance changes that the city has publicized. We also summarize County ordinance changes, which are still contingent on County and Coastal Commission approval. 

Changes to the City's ADU ordinance address new ADU construction and the conversion of a legal nonconforming structure to an ADU.
  • The floor area of an ADU cannot exceed 10% of the lot area up to a maximum of 1,200 square feet. The floor area for ADU's attached to your home shall not exceed 50% of the existing habitable floor area of your house or the maximum ADU floor area allowed for the lot, whichever is smaller.
  • The rules for setback requirements of newly built ADU's have not changed. However, existing ADU's built prior to 2017 with a valid building permit or that can be identified as a legal nonconforming structure with setbacks less than what is required for a new ADU may be converted into an ADU.
    • A second story ADU over an existing garage may have side and rear yard setbacks of five feet. Otherwise any two story ADU is required to have at least a side yard setback of five feet and a rear yard setback of 10 feet.
  • The maximum rear yard coverage of newly build ADU's is still 30%. However, if you have an ADU built prior to 2017 with a valid permit, or that can be identified as a legal nonconforming structure with rear yard coverage that is greater than 30%, it is possible that your structure can be converted into an ADU.
  • The same parking requirements for ADU's apply except in the following instances:
    • The ADU is within ½ mile of a metro station.
    • The ADU is within a historic district.
    • The ADU is entirely within the existing single family home or existing accessory structure.
    • The ADU is located within one block of a car share vehicle.
  • AUP (Administrative Use Permits) are no longer required for two story ADU's. All ADU's will be permitted ministerially.
  • The property owner needs to offer the tenant of the ADU a residential parking permit upon request.
  • No fire sprinklers are required for an ADU if the existing SFR (single family residence) does not require them.
    • This is controversial because it does not comply with State Fire Codes. Therefore, it may be subject to change. Read more about this issue here .
  • No water or sewer connection fees are required if the ADU is built entirely within the existing SFR or accessory structure. Water and sewer connection fees will be required if the ADU is added as an addition to the SFR or accessory structure.

In addition, if you have an unpermitted second unit that can meet all of the necessary requirements of the ADU ordinance except the owner occupied requirement, you may have an opportunity to legalize your second unit. The city has been working to make this process easier for property owners, which you can read more about  here Note that this is not a complete list of changes, and if you have questions about building or legalizing an ADU in the City of Santa Cruz, you should call the City Planning Department at 831-420-5100.

On February 9, 2017.  Jondi Gumz at the Santa Cruz Sentinel reported on a board meeting in which the Santa Cruz County Board of Supervisors amended ADU rules. Some of the proposed changes include:
  • Owners may occupy the main residence, the ADU, or both. The previous law required owner occupancy of only one of the dwellings.
  • ADU height allowances have increased. Detached units may be up to 17 feet instead of 13 feet, and those built over a garage can be up to 22 feet instead of 19 feet.
  • There will be a one-acre minimum for the largest ADU of up to 1,200 square feet, instead of 2.5 acres minimum.
  • No sprinklers will be required when there are no sprinklers in the main house.
  • Permit decisions are to be made over-the-counter within 120 days.
Supervisor John Leopold, who chairs the board, asked for pre-approved ADU designs to cut expenses for property owners. On February 28th, the County Board will vote on the final ordinance changes, and upon approval, the changes will go to the CA Coastal Commission. This means that if everything goes as planned, these changes will go into effect sometime in March. If you have plans to build an ADU outside of the City, know that the County planning department will tell you to come back in March (when the ordinance changes are finalized).

If you've been considering building an ADU, we suggest you call your respective planning department to find out if your property is eligible for ADU construction or legalization. These units can translate into rental income or a comfortable living space for your older children, parents, or relatives. New ADU's also provide additional, greatly needed, affordable housing in our community.

New Housing Projects in Santa Cruz

New Townhouses on Ocean St.

With all of this talk of lack of supply and affordable housing in Santa Cruz, you may begin to wonder: "where is all of the development"?

We have several new projects happening in Santa Cruz City, all in various phases of the development, including seven new hotels and residential apartment buildings springing up around the County.

As a home buyer or investor, keep your eyes on these projects. Let us know if one interests you. We will follow them closely and let you know if and when you can purchase one of these properties. 
  • 12 townhouses constructed at 232 River St.
  • 11 townhouses constructed at 716-724 Seabright Ave.
  • 11 townhouses, five of which are live/work units at 1804-1812 Ocean St.
  • 69 homes and 70,000 square feet of commercial space built in Aptos Village.
  • 40 single-family homes on 13 acres of the 113-acre parcel known as the Polo Ranch in Scotts Valley.
A commercial-use space at 1314 Ocean Street will help brighten up the surrounding neighborhood and provide a clean and attractive amenity for those just getting on and off the highway. 

With tourism as one of the top three industries in Santa Cruz, the seven hotels mentioned above will increase economic activity. Some of the notable projects include:
  • "La Bahia Hotel" project on 215 Beach Street: a 165-room hotel with conference and banquet space, a restaurant, retail space, and spa facilities.
  • "Courtyard Marriot Hotel" at 307-313-321-335 Riverside Avenue: This 151-room hotel is already under construction and appears to take up an entire block.
  • "Lanai Lodge Hotel" at 550 2nd Street: this project is still under review. If approved, it will replace the current 20-room hotel with a 60-room one.  
Hotels translate into higher revenues for our local governments, new jobs, and more money flowing into our local business as tourists explore this beautiful city.

Finally, multiple new apartment buildings are being constructed across the county. This will increase our stock of much needed affordable housing.

See all of the development projects in the City of Santa Cruz here.

Changing Energy Codes to Increase Energy Savings 

Did you know that new 2016 Residential Building Energy Efficiency Standards (Energy Standards) are now being enforced and California is expecting to see 28% more energy savings in regulated loads* than those built under the 2013 Energy Standards?

*an  electrical  load  is an electrical component or portion of a circuit that consumes electric power

Having energy efficient buildings:
  • Reduces energy costs.
  • Increases reliability and availability of electricity.
  • Improves building occupant comfort and reduces impact to the environment.
Energy efficiency requires substantial initial investment in order to realize future savings. Without mandatory measures, and energy efficiency standards, buildings would most likely not be built with energy efficiency in mind.  California has set an ambitious goal that all new construction will be net-zero energy by 2020. Leading up to that goal, the 2016 update to the Energy Standards requires new and altered homes to become more efficient in several ways. 

Figure 1 shows the four main areas of focus for the 2016 Energy Standards updates. 

Architects, building contractors and inspectors are expected to understand these changes. Should you choose to build a new home, they will help to ensure that it meets all state and local energy efficiency requirements. If you're still curious about the changes, take a look at this summary. Some highlights include:

  • Mandatory high efficiency lighting
  • Increased prescriptive efficiency for water heaters
  • Changes to both mandatory and prescriptive HVAC requirements
  • Changes to envelop requirements

Even if you do not work in the building industry, it's important to understand that these changes are taking places because they can result in higher costs when building your home. So what are the benefits of increased energy efficiency?

There are economic benefits to building in an energy efficient home, which over the long-run can be a good investment. As this site explains, you can hire a qualified assessor to determine your home's "Energy Score". This score will help you to figure out exactly how much money you can save each month by improving your home's energy efficiency. A home built with a high Energy Score will see greater savings over the lifetime of the home. 

PG&E, SCE, SDG&E, and SWG also offer programs for both new and existing construction to help lessen the cost of making your home more energy efficient. Here is a great resource to find various incentive programs around the state.

There is also a major environmental impact when homes become more energy efficient. According to the U.S. Energy Information Administration (EIA), the building sector consumes nearly half (47.6%) of all energy produced in the United States. Seventy-five percent (74.9%) of all the electricity produced in the U.S. is used just to operate buildings. Globally, these percentages are even greater. ( source )

By investing in energy efficient buildings, we can start reducing the oil spills, acid rain, smog, habitat destruction and other forms of environmental pollution associated with the use of energy. This is a payoff that will last for generations. 

3D Printed Houses

Contour Crafting is a 3D printing company and method that is working to launch this year. The company will focus on printing shelters for homeless populations and those devastated by natural disasters in the U.S. and abroad. Behrokh Khoshnevis, a USC engineering professor, developed Contour Crafting. His novel construction method  combines  mechanical cranes and 3D layering to print and assemble entire homes, including insulation and indoor plumbing, in less than a day. While his company has a more philanthropic approach, it is possible, and some may argue even likely, that 3D printed homes will hit the commercial market in the not-too-distant future.

The technology for 3D printing parts of homes  already exists. Here are some beautiful examples that have been or are planning to be built:


( source )

However, the construction industry is complex. A 3D printing company would have to overcome many hurdles as it sought to gain approval for its projects. Likewise, new methods of inspection may have to be established to ensure the safety of these structures.

A successful commercial home 3D printing company would be disruptive to the construction industry. However, this change may have a silver lining for construction workers.  Out of 4,379 worker fatalities in private industry in calendar year 2015, 937 or 21.4% were in construction - that is, one in five worker deaths last year were in construction (source). Furthermore, one in ten construction workers are injured every year (source)

Khoshnevis argues that the current homebuilding industry is becoming somewhat antiquated in today's highly automated world. It is very costly, dangerous, wasteful and slow, not to mention that it's large contribution to greenhouse gas emissions. He goes on to claim that entire neighborhoods can be printed in a fraction of the time  and  at a fraction of the cost, with unprecedented architectural flexibility. It is estimated that an average 2,500 square foot house can be built in 20 hours.  If Khoshnevis is correct about the safety improvements of 3D printing, these major disruptions in construction may be a blessing in disguise for thousands of individuals and families.

See Khoshvenis' Ted Talk on Contour Crafting here

Christine's Corner

Some Practical Tips to Help your Home Sell Quicker and For More Money:

The things I suggest below are some that people often don't think of, but can help you get better price for your house.

Fix your leaky water systems. I tell you, nothing makes a potential buyer more unhappy than leaky pipes, broken taps and a general bad state of the water system. If you can put in a little effort to fix this, you will get better return or worst case scenario, you won't turn off potential buyers who would otherwise have paid more attention.

Rusty door? They are easily replaceable and the increased value this gives your home is epic. These fixes look easy and near "unneeded" initially but stats say they improve your chance of getting better valuation for your home.

Cleaning. Nobody is going to pay attention to a dirty house. People's first impression of your home is VITAL to it selling for it's highest possible price. Get the house cleaned up, ideally using a professional cleaner. Make sure that everything is well-arranged and try to remove highly personal items like photos and religious and political things, as these can be distracting. If you can, power wash the exterior, clean up those fallen leaves, and give your home new life with a deep cleaning. 

Brighten up your KitchenOrganizing the kitchen is often a tough task in itself. By default, a good number of things have a way of getting into the kitchen. In this case what do you do? You add a bit of more "space". How? Add an extra basket to keep things organized, buy some mason jars to store bulk food, and if possible throw away what you no longer use . Additionally, bar carts can help to arrange items in bottles. If your kitchen walls are dirty , you can fix them up for less than $40 with some scrubbing and new paint. Finally, hang more lighting. It's cheap and can help your kitchen shine.  The kitchen is very important to a majority of buyers, so taking a little time to brighten it up can go a long way.