Rick Boyce is the Multifamily Sales Lead at Villa Homes, California’s #1 builder of Accessory Dwelling Units (ADUs). Rick and his team help multifamily property owners add ADUs to their parcels to increase revenue, NOI, cash flow, and property value.
Before Villa Homes, Rick held executive sales positions at companies including Quantcast, Monster Worldwide, IGN Entertainment, and Lycos. Rick has also been a guest lecturer at Washington State University, his alma mater, where he taught a course that provided foundational tools and training to help students land jobs after graduation.
Here’s a glimpse of what you’ll learn:
- Rick Boyce discusses why Accessory Dwelling Units (ADUs) are rising in popularity
- The construction techniques of building ADUs
- What are the distinctions between Villa’s ADUs and traditional pre-manufactured homes?
- How the current ADUs are reducing material waste and labor costs
- What you need to know before building: California’s ADU laws
- Determining if your property is ADU-friendly
- Rick’s predictions for the future of the housing industry
- The affordability of ADUs and how other types of homes compare
- How Rick got started with Villa Homes and became a real estate investor
- Rick’s recommendations to get into the housing and real estate investment space
In this episode…
What is an Accessory Dwelling Unit (ADU), and why are they becoming so popular?
As someone who’s leading ADU sales, Rick Boyce is here to share all of the details on these secondary, on-lot homes. According to Rick, the state of California wanted to engineer a breakthrough solution to the current housing crisis. In 2020, laws went into effect stating that any property owner in California can add an ADU to their backyard under specific guidelines and regulations. Now, people across the state are building these units to shape multi-generational homes and generate affordable housing options.
In this episode of Watching Paint Dry, Greg Owens and Katrina Stephenson talk with Rick Boyce, Multifamily Sales Lead at Villa Homes, about the process of building and owning an ADU. Rick discusses the benefits of creating these affordable living spaces, the #1 reason why people want an ADU, and how ADUs minimize waste and maximize property value. Rick also shares tips to determine if an ADU is right for your property. Stay tuned!
Resources mentioned in this episode:
- Greg Owens on LinkedIn
- Katrina Stephenson on LinkedIn
- McCarthy Painting
- McCarthy Painting Contact No.: 415-383-2640
- McCarthy Painting Email Address: info@mccarthypainting.com
- Rick Boyce on LinkedIn
- Email Rick Boyce: rick@villahomes.com
- Villa Homes
- indieDwell
- Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not! by Robert T. Kiyosaki
Sponsor for this episode…
This episode is brought to you by McCarthy Painting, where we serve commercial and residential clients all around the San Francisco Bay area.
We’ve been in business since 1969 and served companies such as Google, Autodesk, Abercrombie & Fitch, FICO, First Bank, SPIN, and many more.
If you have commercial facilities in the San Francisco Bay Area and need dependable painters, visit us on the web at www.mccarthypainting.com or email info@mccarthypainting.com, and you can check out our line of services and schedule a free estimate by clicking here.
Episode Transcript
Intro 0:03
Welcome to the Watching Paint Dry podcast where we feature today’s top facility managers, property managers, and property owners talking about the challenges and opportunities of managing hundreds of 1000s of square feet of real estate and how to beautify and improve their properties. Now, let’s get started with the show.
Greg Owens 0:32
Hello, everyone, this is Greg Owens with the Watching Paint Dry podcast where we are continuing our interviewing of property managers, facility managers, business owners, and all the support services for this entire industry. This podcast like all of our podcasts are sponsored by my company McCarthy Painting. And McCarthy Painting has been in business here in Marinette County since 1969. actually started here in Mill Valley, California. And we do all types of projects, residential painting throughout the entire sort of marine County area, and then commercial painting throughout the San Francisco Bay Area. And in the commercial painting realm, we’ve done lots of projects for Chase Bank, Autodesk, h&m stores, we did spin and Zooks, which are new, like high-tech companies are super fun to be in their offices. Zooks is the autonomous car company and they are doing super cool, innovative things with a tonne of autonomous cars driving around San Francisco. And I’m really excited. We we’ve got somebody from San Anselmo, California, which is right here in Marin County, Rick Boyce, and Rick is what company are you with right now?
Rick Boyce 2:00
Yeah, companies called Villa Homes and we build accessory dwelling units.
Greg Owens 2:04
Yeah, Villa Homes, accessory dwelling units. We’re talking about this offline, which is our ad use. Those are the mini homes. And we’ll find out more about those and why they’re so popular right now. And that kind of thing. I also want to make sure I mentioned that. Katrina Stephenson is on the call to with us. And Katrina works from McCarthy Painting is sort of gobbling up and learning as much as she can about painting, podcasting and all kinds of things you might hear her check into at times. Rick, how are things going it’s raining here in Marin, I’m excited for the rain even though it affects our business greatly. Like we can’t do any exterior projects right now. But I’m so happy to see it raining it feels natural and good even though it’s early hour things for you.
Rick Boyce 2:50
Absolutely. I couldn’t couldn’t be happier. And you got to admit Greg, you had a good run there of sunny days so you know Oh yeah, sure it’s all working out but yeah, we’re happy to see the rain and and yeah, businesses businesses good you know Villa Homes where I’m working now we offer accessory dwelling units throughout much of California. We’ll talk a bit in a bit about the state laws that passed about a year and a half ago to make accessory dwelling units easier to add in the backyard of your of your home.
Greg Owens 3:21
Yeah, no this this is exciting because I definitely have been thinking about adding those course right because like what it’s it’s the rage right now. Right? And yeah, the laws have changed and that kind of thing. And, and in here in marinara, super, they’re become more and more popular and allowed to which is surprising from rain County.
Rick Boyce 3:41
Yeah, well, what happened? What really drove all this was the state and a number of new laws over five total, were signed by Governor Newsom in the fall of 2019. They went into effect January 120 20. And what the laws basically state is that any property owner in the state of California can add an accessory dwelling unit to their backyard. And the only the only restrictions on that are that the local jurisdictions must allow the adu to be built. If it’s can be as big as 800 square feet with local jurisdiction, having no say about it, and you can go bigger as well. And we’ll talk more about that. And then you need to meet the setbacks. setbacks for 80 years have been massively relaxed. So regardless of jurisdiction, the setback requirement on a rear and side yard is only four feet for the accessory dwelling unit. So
Greg Owens 4:34
wow, this is this is this is great for me to hear, because I did not know that to the extent that this because I knew it. I knew it got easier. Oh, we just lost the Trina. That’s okay. She’ll come back. So yeah, I knew it. I knew I hadn’t gotten easier. I didn’t know the exact laws because I knew I you know, I’m a general contractor and a painting contractor. And so I’m just familiar with some of the like how crazy hard it’s been to build and do that kind of stuff. But what you’re saying is it’s like, no, this is like state mandated. And you can have up to a four foot clearance, which in a lot of towns, it’s like 15 or 20 foot, which makes it possible to put any kind of structure on a lot, right?
Rick Boyce 5:14
That’s right. That’s right. Yeah. So yeah, front setbacks haven’t changed. So front setbacks remain the same regardless. And those can be 2025 to 40. It depends on the city or the county. But the the adjustments in the rear and the side yard make a huge difference. So parcels that could never dream of having a second unit in the backyard now really have a great shot at it. Because most backyards are large enough to to meet those setback requirements with an adu.
Greg Owens 5:43
And it makes total sense because I was I was going on a hike here in Mill Valley, and I saw a house that had their we’re building an adu that was like, on the hill over the hill, right, like, Damn tight to the back property line. Right. And I was like, That’s a beautiful way to build that. But wow, how did they ever get that passed? And now I know. Yeah.
Rick Boyce 6:05
California. Yeah. Yeah. State of California. You know, obviously, we all acknowledge we have an enormous housing crisis. And we’re short. In California, some estimate as many as 1.5 million housing units right now, to house our current population. And so the state of California think finally wanted to engineer a breakthrough and stop the nimbyism for lack of a better word. You know, everybody knows we need more housing. No one really wants it. So
Greg Owens 6:36
we got it. We got to back up. What is What was that word again? And how do you define
nimbyism?
nimbyism? nimbyism?
Rick Boyce 6:43
Not in my backyard? Oh, it’s an acronym. Right all. We all acknowledge that we need more housing in California, but no one really wants it, you know, next to them. And so the state of California with these new adu laws finally kind of stood up and said, you know, we’re gonna kind of force some of this in a way I think what at us are really doing is they’re backfilling the suburbs. In many ways, you know that the suburbs have led to, I think, some unfortunate outcomes for all being one, a lot of people are commuting hours, from their single family home in the valley to get the jobs in the Bay Area and things like that. And part of the reason for the sprawl is just the parcels tend to be large. And there’s a lot of unused land on a lot of parcels. So adu is really our I think I see part of it is really being just backfilling the suburbs, and just adding more density, in what historically have been fairly low density areas.
Greg Owens 7:41
Wow, that’s amazing. Um, and you guys are building on site or building off site or a combination of both? How what’s how’s that taking place?
Rick Boyce 7:49
Yeah, it’s a combination of both in our case, and of course, you can build them you know, any any number of ways. But in our instance, we build everything in factories, so prefab with the structure itself. And those ad structures arrive, complete. So from the factory, they have, you know, floor coverings, cabinets, appliances, all the plumbing is in place, even the window blinds, like the towel racks in the bathroom, like these things are, you know, ready to move into when they arrive. And parallel pathing with the work that’s happening in the factory is we’ll be pouring a foundation and creating utility connections, or at least trenching for future utility connections in when the unit arrives. So once it’s once it’s on site, once the unit is on site, it’s literally 30 to 60 days to finish off the job.
Greg Owens 8:38
Oh, man, that’s great. And you know, super fast. Yeah. And you know, they they’ve been pushing for factory building of houses since I was very young. And it never really took off in this country and other countries definitely more popular, but I can see it perfect for this. It never really I mean, it’s it’s works. It’s here, but not as much as like building on site right still. And there’s so many good things about building inside a factory because you can control everything, including you can control the weather, right? Like you can, you can really make sure and you can control. Like there’s no beer cans in the walls kind of thing. We actually just discovered this in a skyscraper in San Francisco, finding a bunch of beer cans inside a wall that we had to open up right there like this is probably the last guys put this together.
Rick Boyce 9:30
Yeah, it’s like a time capsule.
Greg Owens 9:32
Right? What’s like Katrina? Some reason your sound isn’t isn’t good again. Oh, no sign language Katrina. Where we have audio with Katrina here, but that’s okay. I think she was asking. I don’t know what she was asking. So
Rick Boyce 9:48
we argued a little bit about the construction techniques. So yeah, you know, we’re prefab and our ad use range from 450 square feet to 1200. The state of California does allow up to 1200 And I had mentioned earlier that jurisdictions must approve an adu project if it’s at 800 square feet or below. And so I just wanted to just kind of paint a little broader picture around that. Basically, in many cities, you can go up to 1200. But once you go above 800, the local jurisdiction definitely has more say, in the matter in terms of what you can do, and, and otherwise, but it’s at 800 or below where it’s pretty smooth sailing, you know, all the way through because of the state the state laws and how that’s set up.
Greg Owens 10:33
So you still get a permit in the city at 800. And you come with your plans, and you say, here’s the setbacks. Here’s what I’m putting together. What it sounds like, you’re saying it doesn’t have to go to Design Review, and they don’t have as much say, in what what can happen to it correct, including probably like colours, siding type, you know, roofing type, which they get involved in massively if it’s a bigger structure. So then if it goes to that next level up to 1200 square feet, it might trigger design review, correct? It couldn’t possibly, yeah, like here in Noe Valley, for sure. If you go to 1200 square feet, I would think
Rick Boyce 11:11
at 800 or below the the language that the state of California uses is ministerial review, and so and approval so basically, it just becomes administrative as long as the the submission in the plan set meet with the state guidelines at 800 square feet or below. It’s literally almost a no comment, and you know, stamped and approved and it goes through the process that way. Pretty amazing.
Greg Owens 11:35
Yeah. What and what about like on hillsides and things like that, as far as foundation, that kind of stuff? How do they because you know, like I’m on a slope, what are they kind of, they take into the count that kind of thing.
Rick Boyce 11:48
Yeah, that gets much trickier and we are you know, obviously we really look for you know, flatter lots if not flat, I mean, it’s just so much easier to execute and also just much more affordable, you know, building anything on the hillside at so much the cost, but yeah, with with complex foundations if we have to. So in our case, our plans are all pre engineered, pre designed by an architect, so a lot of those soft costs are already behind us. And those are included in the overall cost of the project. So that keeps it you know, less expensive, and it helps it go faster. However, if there’s a steep parcel and we’re going to need a you know, a soils and a structural engineer designed the foundation, that’s going to add back in some of those soft costs that we would avoid on a flat lot. And obviously can add time to the process as well. But we’ve done foundations on steep lots that require you know, drilled piers you know, 12 feet deep and the whole thing so, you know, anything’s possible and building as we know,
Greg Owens 12:46
but this the city get involved when you’re drilling piers that they are they going to want to all interconnected, and all of that kind of thing as if you were building a deck, I would think, right, like, you know, how like these days used to be you could put a pier straight down, you know, hit bedrock pour pier, but now they want to, they want to connect it to the House Foundation in so many ways, right? all interconnected. Yeah.
Rick Boyce 13:07
So I think with that kind of complexity, they’re definitely going to be a lot more involved in in that for sure.
Greg Owens 13:11
This is This is so great to hear, like this is this is wonderful. I don’t pay attention to news or politics very much. But this kind of thing is perfect, because I’m getting it from you that’s building these things. It’s
Rick Boyce 13:22
huge. It’s huge news. And by far, you know, people build them for many, many different reasons, but far and away the number one reason is to take care of their parents. And so we I would say, our most common customer profile would be, you know, a family that’s maybe you know, in their 40s or 50s. They’ve owned the home for a while they’re looking for a place for mom and dad were maybe in their 80s and an adu just is just ideal. I could just solve so many problems and you know, we’ve we have cases where we have grandparents, let’s say we’re moving from another part of the country, they’ve sold their house there, they want to be closer to their grandkids they want to be closer to their own children. And they don’t want to buy a house. They don’t want to buy a million-dollar house or 1,000,005 house in Marin County, you know, or wherever Northern California. Yeah. And so the adu becomes a very affordable way for them to relocate, get closer, and have a really nice and comfortable place to live. And, and, you know, people also are, I think, increasingly attracted to the idea of a multi-generational household and having family close, but not in the same dwelling so close enough to have dinner together a couple times a week, but not literally, you know, sharing the kitchen type of thing.
Greg Owens 14:35
Yeah, does it sounds perfect. My mom lives in North Carolina, and but she’s so entrenched with her family, her friends there that I can’t ever see her leaving, but there might be a time where she’s gonna need, you know, an extra space I’d definitely be thinking about that more and improves the property value and the use of the property.
Katrina Stephenson 14:56
Alright, have a quick question around the difference between What what you do? And like a pre manufactured home? Like, like a double wide or?
Rick Boyce 15:07
Yeah, that’s a really good question. So by definition, the structures that we build, at least now, and we’ll talk more about what we’ll be doing in the future, but the structures we build now are, by definition, manufactured homes. And so they fall within that classification. And the factories where these are built, build, pre, they build manufactured homes for lots of different use cases, certainly, they build for ad use, they also build for manufactured home parks, etc. So these, these units, any manufactured home, and this is part of the design is designed such that it can be set either on a permanent foundation, which is what we do and perimeter foundation with poured concrete, or they can be set on a temporary foundation of piers and blocks. And that would be more like a manufactured home community type of installation. And from a legal perspective, as soon as you attach a manufactured home to a foundation, it becomes real estate. So at that point, it magically becomes a piece of real estate and a part of the property. When you set them on temporary foundations, they will continue to be personal property, and not officially real estate. So that’s one of the kind of the biggest distinction, if you will, really has to do with the type of foundation that these are placed on. And that’s part of what I think part of what is at the core of your question. In terms of the the construction itself, it’s literally the same materials to the same techniques used in the construction that Greg or any general contractor would use on their own projects. You know, wood framing, you know, sheetrock, literally as much insulation as we can get into the walls, double pane, windows, etc. So there’s nothing about the construction technique itself, that’s any different. These are designed to be transported down the freeway, which is kind of amazing. If you think about how sturdy a house must be to be able to travel down the freeway. And these don’t sit on trailers, either that unit itself actually is what gets pulled behind the tractor trailer. And so we put axles and wheels literally, underneath the unit. So that just demonstrates how strong these things are. And they’re designed to withstand that kind of that kind of travel.
Greg Owens 17:25
Oh, and so with these kinds of units, you’re actually building the whole unit complete. And because sometimes they would build a modular home, and then they would and then and then glue the pieces together on site, you know, one piece comes in another piece comes in another piece comes in, and then they put them up in a way right and connect all those pieces, but yours are being built, for the most part sounds like at the factory put onto a trailer with the roof and everything on it. Yeah,
Rick Boyce 17:53
the roofs on them. So they arrive in either one or two pieces, depending on how large they are. And, and so the smaller ones tend to be, you know, kind of a single piece and the larger ones to pieces. And when we bring them as two pieces. Of course, we you know, they call it stitch and scene where we kind of pull the pieces together and make the scene disappear with with sheetrock mud and so forth.
Greg Owens 18:21
And I think Katrina is thinking of like the double wides of like the 1980s and 90s where it was definitely like two trailers put together and you can see the scene movies you did or when they’re done you cannot see the seam and the materials are of a higher quality very much house like compared to back then when they were using a lot of like like just like two inch, two inch boards for an in very little insulation and very these are these are actually built to home specs.
Rick Boyce 18:53
Yeah, definitely the the exterior walls are all two by six and that’s to allow, you know, our 19 insulation. The exterior siding is all Hardy board. You know, cement lap siding. So yeah, definitely built built the last and with high quality materials
Greg Owens 19:10
and high quality windows, the vinyl windows and that kind of thing. These vinyl windows for sure. Yeah. Yeah. Go ahead, Katrina.
Katrina Stephenson 19:18
That’s great. I totally answer my question. I’m sure other you know, if you’re thinking that too now we know Yes.
Rick Boyce 19:25
And we’ll be looking at you know, in in the future, additional types of construction. So these manufactured homes, we contract with factories to build these on our behalf and this is the construction technique that those factories happen to use this manufactured housing. We’re also looking at factories in the future that use different techniques more modular modular housing is also prefab but it’s just built to a different construction spec. The this might be getting a little bit too much in the weeds but the manufactured homes which are Built to a federal building code that lives within the the HUD jurisdiction. And so the manufactured homes, one of the benefits is that they don’t need to meet all of the California Building Code mandates. So for example, these ad use that are manufactured homes are designed to accommodate solar panels, but it’s not a requirement. So you can install one of our at us and not be required to install solar. In order to get your CFO you can add it if you like, or you can add it later at it when you’re ready to add it. But it’s not part of the permitting and ultimately, the approval process, which
Greg Owens 20:37
I think is the case when it comes to building a house now. Yeah, yes. Sort of solar. Solar has to be built into it. Yeah.
Rick Boyce 20:44
It’s a mandate for sure. Yeah, that’s part of the the new California Building Code. So the the mod units will be building in the future will be subject to that building code. So it’s just a slightly different construction techniques.
Greg Owens 20:57
So is that because they’re going to be bigger, or because the construction technique change,
Rick Boyce 21:02
the technique will change and they won’t be, they won’t be built to a manufactured home spec that will be built to a modular spec. And that’s governed by California Building Code and title 24. So what what you start to learn is that all all manufactured homes are prefab, but not all prefab are manufactured homes, if you will. So, there’s a lot of different flavours of housing that’s getting built in factories. Which, which is great, because I mean, if you think about it, there, there’s just so many advantages, you talked about climate controlled environment is one, a really, really big one is minimizes waste, because everything that they’re building is to very specific standards. And against very specific for plans. These homes are literally designed to make use of eight foot material, for example, without creating lots of waste. So you’re just not going to have the mountains of waste at a factory the way you do want to on a typical job site, which is huge. So it’s a really green way to build and then
Greg Owens 22:03
and it’s a and it saves the manufacturer too, because materials have skyrocketed in the last few years, you know, and it’s it’s definitely become short supply and the supply chain and all that. So that’s all good news.
Rick Boyce 22:15
Yeah, absolutely. And, and in a way too, it’s a bit of a, it’s a bit of an arbitrage on pricing, too. Oftentimes, things are built in places where labor is a lot less expensive. And also the the labor behind these units is less specialized, I would say as well. You know, the electricians and the plumbers and so forth. Of course, they’re their license. But they’re simply you know, repeating the exact same process every day, day in day out.
Greg Owens 22:43
Also the learning the learning curve to teach them how to do plumbing in one of these homes is way different than learning code to come learning curve to come to my house here. In Noe Valley. It’s like a 1960s house that has like weird plumbing, or hey, like, not weird, but it’s just old. And it’s and it’s not built to today’s code and tonnes of problem solving. They don’t have to learn all that they could just learn how to like run pipe run things, it’s probably pecs or something like that. And they’re just running it and getting it up. And it’s all exactly the same way every time. Yeah.
Rick Boyce 23:16
So there’s huge advantages. So the cost, the cost of labor, the amount of labor, you know, the last amount of labor hours if you will,
Greg Owens 23:24
yeah, no, that is so good. It’s just so good to hear. What How did how did what how does the parking situation come in? Because I know, that’s like a big that became a big deal. In these arguments, right, especially here in Mill Valley. I heard on sort of on next door people flipping out over parking situation in my neighborhood is no different. It’s a bit challenging at times. Right. What how is that being addressed? Or does it need to be addressed at all?
Rick Boyce 23:52
Yeah, here’s what the state of California said as part of their ad regulations is that if the if the address where the adu is going to be located is within a half mile of a public transit stop. So a bus stop light rail, whatever, you do not need to add parking for the adu. Half Mile. Yeah, one half, half a mile, half mile walk, walk, okay. So not as the crow flies, but
Greg Owens 24:17
so that’s, that’s interesting, because that’s gonna roll out a lot of homes here in Noe Valley, that are up on the hills in the back hills, but my home is like closer to like Whole Foods and that kind of thing and downtown, so then
Rick Boyce 24:28
I’d have to check. Probably yeah, you probably would be would be close.
Greg Owens 24:32
And you said not as the crow flies as you walk,
Rick Boyce 24:35
walk. And Google Google Maps allows you to plot the walking distance from any house to the nearest transit stop. So you can kind of measure that out pretty quickly. But for most houses, that helps him get around the parking requirements as long as you are walking distance to transit. And there’s some other interesting parts of a lot too as it relates to parking. One is that if you If you remove off street parking to create an adu so let’s say you convert a garage to an adu or you demolish a garage and put a brand new adu in its place where it was. If you remove off street parking to create the ad, you do not need to replace that parking.