North Bay property experts weigh in on ADUs
Commercial real estate brokers say too many challenges are stifling the real estate market. One property developer proposes more “missing middle” housing solution, meaning smaller-density units or ADUs.
The key to gaining more North Bay housing may lie with multiunit dwellings to meet increased demand.
“Housing is constrained in all cities and counties. We gotta find land. But, we need planning commissions to have a backbone against NIMBY,” said Haden Ongaro, leader of North Bay operations for commercial real estate services firm Newmark, referring to opponents’ clarion call for “not in my backyard.”
“Everyone is strapped. We have a lot of challenging conditions. And, the price of goods is outpacing income,” said Scott Sheldon, Santa Rosa branch manager and loan officer for SecurityNational Mortgage Company.
He listed high or nonexistent insurance, ongoing inflation, tariffs and rising home prices and goods, to name a few other obstacles.
“We’ve seen an uptick in business in the last three years. But eight out of 10 loans we see are requiring something extraordinary,” he added.
Economic constraints have led to developers going above and beyond to get new housing off the ground.
“A lot of the condos are blacklisted by insurance companies because they don’t have enough in reserves,” said Steve Easley, senior real estate director in Meridian Commercial’s San Rafael office, highlighting an issue in the state.
And insurance companies are raising rates or choosing to not insure as they face more catastrophic mass claims.
“We get it. Insurance companies are in business to make money. Insurance on anything is an arduous task. But the bottom line is, (securing) condo insurance is an arduous process,” he said.
Happy medium
Daniel Duffy, a Duffy Property Group property owner and manager, advocates for a middle-of-the-road solution.
The Mill Valley property investor calls it the “missing middle,” which refers to smaller, multifamily dwellings such as the four-unit structure he owns in Fairfax, along with a duplex in San Rafael.
In 2023, he also flipped a property with an accessory dwelling unit in San Anselmo. ADUs, sometimes called “mother-in-law units,” are often cottages built on the same land as the main house.
“There’s not enough housing to go around. Since post World War II, we haven’t created enough housing stock,” he said.
At least 58,000 housing units will be needed for the Sonoma County workforce by 2030, housing nonprofit advocate Generation Housing has said in a recent report.
“We can succeed at building multi, smaller-scale housing without losing our small-town charm and without having big density. That’s why ADUs have been such a runaway success,” he said.
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