City Council Meeting 10/27/18

I have been offering you advice for the support of tiny home policy adoption.  Currently I am  in Paradise, California helping with the adoption of emergency housing policy based on my fire storm experience.

It’s quite remarkable that over 15,000 homes were destroyed and most businesses in town. Over 60,000 people are displaced. Hundreds are still missing and assumed to be dead. The housing market is beginning a sharp upward price trend.

We can be a model for using tiny homes in disaster relief. Innovation is not possible in a disaster. In reviewing your progressive ordinance and as a potential model for the state of California, I see 3 deficiencies to large scale adoption.

The biggest issue is providing deed restrictions on pricing of the rental of these homes which should be addressed today.  (PLEASE SEE PREVIOUS COMMENTS ON CURRENT PRICING PROBLEMS IN YOUR MARKET.)

The other 2 big issues can be improved as we go

  • Improvement needed on energy efficiency/insulation
  • Assure structural integrity of chassis and axles so they don’t break on the road.

Specific additional feedback on your draft ordinance were provided late due to the situation in Paradise,

  1. I encourage the adoption of tiny homes WITHOUT EXCEPTION, ONLY IF CERTIFIED BY A 3RD PARTY STRUCTURAL ENGINEER. This is required for financing, insurance and resale in other jurisdictions. All documentation of compliance should be kept for the life of the tiny home. You want units that can be financed, insured and resold in ANY municipality with proof of compliance. The city staff can’t and should not do this.
  2. No 5 year owner occupancy exemptions because people game the system.
  3. On design, no monolithic siding. Results in high incidence of unmitigated water damage.

The rest of  this page is focused on deed restrictions for pricing of tiny home rentals. I recommend that you tie the upward rental limit to the price set by HASLO for a studio rental.  (Look what is happening to your market now

We MUST deal with affordability NOW, otherwise this new privilege offered will become seen as an entitlement instead of a privilege. It will become another financial opportunity to exploit by investors or anyone looking to subsidize the mortgage of their personal residence to the highest bidder. AirBnB was a perfect example of that market behavior.

Developing tiny homes is only a 1/4 of the cost and time of developing a traditional accessory structure, and so such a compromise is perfectly reasonable to ask.

If ALL housing stock continues to go to the highest bidder this city WILL give away more housing to investors. Your owner occupancy is already a staggering low of 35%. ~ ~ In a disaster your population will evaporate because the economic ability and incentive of residents to stay will be ridiculously low.

Take a look at this video of Paradise Mayor Jody Jones. Imagine council members any of YOU standing in that mayor’s shoes. Would you want bad financial decisions of your city’s past to determine your disaster recovery potential?

This video gives you insight into the new world Paradise faces toward recovery.  What will we do to reduce damage in the housing market?  And to avoid further ECONOMIC damage by speculators?!! A handful of investors bought most of the undamaged inventory on the market within 5 days of the fire!!!

BELOW ARE SPECIFIC COMMENTS ON THE LANGUAGE OF THE PROPOSED ORDINANCE

Page 294 – SECTION 17, OWNER OCCUPANCY.  Disagree with giving 5 years of exemption.  Tax law provides a loophole for gaming the system. Investors can drive up price of sale and rental by renting to highest bidder, get a owner occupancy exemption AND potentially get a capital gains exclusion of $250-500k?  How are you going to “police” the integrity of that??  Don’t agree with offering this at all.

Page 295 – SECTION 19.  SUBSECTION E1c.  DEVELOPMENT STANDARDS, PROPERTY MAINTENANCE STANDARDS refers to a chapter 17.76 “Property Maintenance Standards” Mostly referring to homes other than tiny, but these rules will apply to them too. Note roof-top equipment conflicts a little with tiny home specific design ordinance.  Solar hot water and electric should be allowed on roof at a minimum.  All looks reasonable and well considered.  Parking may be future challenge.

Page 295 – SECTION 19.  SUBSECTION E1e. DEVELOPMENT STANDARDS, SIZE.  Correction.  400 feet.  is what you agreed to.  Understand logic.  Still think 300 is going to be your average size.  Building larger could result in axle overload.  We will learn as we go.

Page 296 – SECTION 19.  SUBSECTION E1g.  DEVELOPMENT STANDARDS, DESIGN.  Good.  I would add no monolithic walls.  The problem RVs have had is their difficult in repairing water damage because it involves specialized tools and techniques.  It can be much more expensive and burdensome to repair water damage.  Thus resulting in a higher incidence of un-mitigated damage.

Page 296. SECTION 19.  SUBSECTION E2. MECHANICAL EQUIPMENT.  Again, solar equipment should be explicitly allowed and encouraged.

Page 296-7 8. SECTION 19.  SUBSECTION E8b PROCEDURE REQUIREMENTS, STRUCTURAL CERTIFICATION.  It is my STRONG OPINION that ALL units should be certified by a 3rd party structural engineer with no exception.  All documentation of compliance should be kept for the life of the tiny home.  You want units that can be financed, insured and resold in ANY municipality with proof of compliance.  The city staff can’t and should not do this.  All tiny homes must be licensed and registered with DMV.

Page 297 SECTION 19.  SUBSECTION E8d PROCEDURE REQUIREMENTS, DEED RECORDING.  This is where we should be talking about restricting rental pricing of this unit to the HASLO standard for a studio apartment.  (SEE COMMENTS ABOVE)