Illegal Second Units Get A Break
In a real blow for housing affordability, Marin County is granting a one year amnesty for homeowners who have constructed illegal second units. Units that are less than 1,000 square feet, and comply with building regulations, will be legalized by paying one half the cost of the permits for them.
There are plenty of illegal second units around. The IJ article estimates 400, but I bet there are more than that. There are plenty of investment properties out there that have illegal units, with varying degrees of disclosure. Add in converted garages, basements, etc, and from Tiburon to Novato, there’s plenty of them.
I sold a building to a client last year with an illegal third unit, and the agent put it in the MLS listing. Others don’t say anything, but price it high relative to the income. When you visit the property, there is clearly an additional unit, but it is not stated, nor mentioned on the income statement.
Either way, a legal additional unit will almost always add value. Affordable rental housing is in such short supply that even small studios, in a good location, will get $1000 a month. Splitting one unit into two, as I have often seen done, can boost the income for a space significantly.
Take advantage of this if it applies to you. Plenty of buyers are scared off by illegal units, so it makes it tougher to sell. The more people you can appeal to, the more you’ll be able to get for your property.
