MJ Lee Research on Second Units – Jan-2013

ABSTRACT Dec-17-2012

A Comparison of Second Unit Strategies in Municipalities with Low Density Land Use


The Town of Portola Valley is located just west of Stanford University and is considering efforts to meet its affordable housing requirements. As a town of low density land use with largely one single family dwelling per acre, a current effort to convert a commercial property to housing of 8-12 units per acre has been controversial. Second units are a more palatable option for homeowners, but unlike some of its neighboring municipalities, Portola Valley may not be able to meet its California requirements by second units alone.


The purpose of this investigation was to survey the effectiveness of second unit programs in municipalities with similar land use densities. The study ended up being limited to suburban towns south of San Francisco in the counties of San Mateo and Santa Clara, commonly known as Silicon Valley.


I interviewed planners for the towns of Atherton, Hillsborough, Los Altos Hills, Monte Sereno, Portola Valley, and Woodside and studied their current and prior housing elements. Demographics, second unit policies, and past and current rates of production were collected and compared in a spreadsheet. Program effectiveness was analyzed via a calculation of annual second unit production per thousand single family residences. Four local realtors were also interviewed to understand the real estate market perspective on second units.


The towns of Atherton, Hillsborough, Los Altos Hills were found to have made ordinance and procedural changes that resulted in increased second unit production as compared to two towns that took no action. However, Portola Valley took no action but still had a good production rate in 2011 as compared to its neighbors. Due to the small number of towns surveyed, statistical significance of the findings cannot be calculated.

Conclusions and Recommendations:

Comparing second unit program effectiveness via annual second unit production per thousand single family residences appears to be a useful metric. In addition, the increases may indicate that California requirements, if followed, do create more affordable housing stock.

It appears that Portola Valley has created second units more as a reflection of the economy, and that the number of real estate buyers interested in second unit properties may be small. But from this study, it may be concluded that production could become more consistent, and Portola Valley could meet or exceed its affordable requirements if it followed the lead of three of its neighbors.

Specifically, it is recommended that Portola Valley increase the maximum second unit size from 750 to 1,200-1,500 square feet, implement a process of ministerial approval, and reduce or waive fees. In addition, there are minor recommendations for communications, an amnesty program, reduced parking requirements, and updating the Portola Valley Second Unit Manual.

Download the Jan-2013 Portola Valley Second Unit Slideset

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