Now Playing

Grannies Gone Wild

Concerns over affordability and sustainability are making this the golden age of the additional backyard dwelling unit. A guide to going big by building small.


Dennis and Lisa Jones’s 700-square-foot backyard cottage in El Cerrito, where Dennis’s mother, Peggy, lives. The unit, constructed by New Avenue Homes, features a full kitchen and French doors that open onto a small patio.

(1 of 3)

A sleek, detached ADU in Graton, manufactured by Studio Shed and financed by Point. The unit was created out of three of Studio Shed’s 16-by- 34-foot Summit Series homes, which were combined into one two-bed, two-bath unit.

(2 of 3)

The central unit is a common area with a kitchen, while each “wing” has one bedroom and bath.

(3 of 3)


Could the solution to the Bay Area’s housing crisis be right in our own backyards? That’s where Jake Decker, an Oakland labor union representative, recently built a 392-square-foot one-bedroom cottage that he rents for $1,500 a month to friends who relocated from Washington, D.C. “It’s so darn expensive out here,” says Decker, who is 38 and grew up in Nebraska. “It’s nice to share with other people if you can.”

In the midst of a persistent housing shortage, some homeowners, city planners, architects, and tech startups believe that backyard cottages might be the key to sustainable growth—while circumventing even the NIMBYest of Bay Area neighbors. Their hope: Folks who balk at the horror of developer-backed condos or apartment buildings might actually warm to the idea of private homeowners developing cottages or granny flats (known in planning-speak as accessory dwelling units, or ADUs) to house relatives or renters. Perhaps sensing that the tide has turned from NIMBY to YIMBY—with pro-housing activist groups suing over denied building permits, and numerous new ballot initiatives addressing the housing shortage—Bay Area cities have in recent years been loosening the shackles on ADU development.

And then there’s the cute factor: With an endless loop of made-for-HGTV tiny-home programming in recent years, homeowner curiosity is high. Everybody, it seems, loves an in-law unit, whether it be a low-frills shipping container installed for under $65,000 or an architect-designed showpiece with walls of glass and a little gourmet kitchen that runs from $100,000 into the $400,000s.

Not surprisingly, entrepreneurs are racing to meet new demand. Luke Iseman left his job at Y Combinator to start Boxouse, a backyard-cottage business headquartered in a 20,000-square-foot windowed warehouse in West Oakland. With wall murals and trailer-like boxes in various stages of transformation, Boxouse’s offices have the feel of an industrial-scale think tank where Iseman and his friends make Burning Man art and conjure new ways to fix one of the region’s most intractable problems. On a recent afternoon, that included early concepts of Japanese capsule–inspired sleeping pods that could be stacked on the back of a flatbed truck and parked on the street.

Iseman’s most promising idea was across the street, in an open lot filled with about half a dozen Boxouse cottages. He pays a third-party vendor about $2,000 apiece for decommissioned Port of Oakland shipping containers, which he turns into 160-square-foot ADUs with bamboo floors, skylights, windows, kitchenettes, and heating and lighting that can be controlled by an iPhone app. Boxouse sells them for $8,000 to $65,000 or sets them up as rental units and collects a set monthly management fee. Iseman lives out of various converted containers as he builds them. “I really love the idea of living in mixed-income neighborhoods and want to facilitate that,” he says. “But we need to add housing a lot faster, or we’re going to have a shitty rich-person playground formerly known as the Bay Area.”

Michelle Frey, executive director of San Francisco’s Urban Land Institute, says that 100,000 new housing units would be created if just 10 percent of the single-family homes in the Bay Area added ADUs. Recent surveys suggest that as many as a third of Bay Area homeowners are seriously interested in doing so. But the biggest hurdle is often the permitting process, which— depending on the city—can take months and add tens of thousands of dollars to construction costs. (Decker says he paid between $10,000 and $15,000 in fees for his place in Oakland.) To remedy that, Governor Jerry Brown signed a bill in 2016 designed to make ADUs easier and cheaper for Californians to build, streamlining the process and basically overriding local bans on building backyard cottages.

Though the new law is still being implemented, the result is that demand has never been higher. Steve Vallejos, who founded Fairfield-based Valley Home Development in 2005, says he has 40 backyard cottages in various stages of design and construction— up from his typical total of about 10 to 15 such projects a year. Matt Baran, an Oakland-based architect, says he was building no ADUs a year ago at this time; now he has six on the docket.

Karen Chapple, a city and regional planning professor at UC Berkeley who has done extensive research on cottages and built one on her own property in 2010, says she’s noticed several new companies that have cropped up in just the past year or so. “There’s definitely a market,” she says.

That might be an understatement. 

Read More About the Granny Flat Explosion:
New Kids on the Lawn: Three companies trying to crack the cottage code.
Cottage People: Five homeowners who've made room for granny.
Another Thing Canada Does Better: Vancouver shows how cottage laws can ease a crisis.
The Granny Whisperers: Designers, builders, and expediters of backyard flats.

Originally published in the February issue of
San Francisco 

Have feedback? Email us at
Follow us on Twitter @sanfranmag
Follow Candace Jackson on Twitter @candacejackson