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Rent the Backyard (YC S19) wants to build a studio apartment in your yard

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Re: Rent the Backyard (YC S19) wants to build a studio apartment in your yard

#51

Post by DoreenMichele »

I approve this startup.

This is in line with the idea of Missing Middle housing. We used to have more rooms for rent, SROs, small houses etc. Then we largely zoned and regulated them out of existence. The ones we still have are often very old and grandfathered in.

We desperately need to solve the housing supply problem. Government not only can't solve it, it really shouldn't try. It should be looking to deregulate some and get out of the way.

I've studied this problem space for a lot of years. Government interference is part of the problem.

I don't want a nanny state that tries to provide for all your needs. I would like to see single payer healthcare, but for the housing sector, I would like to see government work on being less controlling and less interfering and let the private sector have maneuvering room to handle this.

I wish this company all the best and much success.

Re: Rent the Backyard (YC S19) wants to build a studio apartment in your yard

#52

Post by rorykoehler »

Causality1 wrote: post #48

>builds studio apartments in homeowners’ backyards, which are then rented out That might be one of the most dystopian things I've ever seen on HN.

And it's funded by YC too. I wonder how they think funding startups like this impacts their brand?

Re: Rent the Backyard (YC S19) wants to build a studio apartment in your yard

#53

Post by briandear »

Ibethewalrus wrote: post #8
dpflan wrote: post #4

Can someone more familiar with the Bay Area housing issues and this company’s approach to increasing housing explain or analyze this for a non-Bay Area audience? I ask because this currently is Bay Area only.

Lack of space (SF is quite small) + Tech boon = most expensive city in the world

[flagged]

Re: Rent the Backyard (YC S19) wants to build a studio apartment in your yard

#54

Post by sburl »

blunte wrote: post #29

People who can afford their home will not like watching their property values and quality of life decline because a neighbor “rented” its back yard. Taking the Uber approach - ignoring laws - won’t work here, so this business is entirely at the mercy of permit laws. I find it astounding that some ideas get prominent backing. Furthermore, home owners will discover that having people travel alongside their homes to rea…

Hi there - my name is Spencer and I'm one of the co-founders of Rent the Backyard.

We're very much focused not taking the Uber approach. We're working within the context of a set of laws California has passed over the last several years that establish and regulate what the state calls "accessory dwelling units" aka ADU. We're initially focused on building in cities like San Jose that have factored the sustainable and conscious development of ADU into their thoughts on how to combat the housing crisis they face.

4300 ADU were permitted and built last year in California with hundreds of these units being built in the Bay Area (https://www.sfchronicle.com/bayarea/article/Are-accessory-dw...).

We're really conscious of the impact we'll have on the neighborhoods we operate in and are committed to working with everyone involved to make the process of installation and ongoing housing have a minimal impact. Our studio apartments are almost completely built when they arrive in your backyard and require very minimal (a few weeks if not days) to bolt together and be ready to go. We're excited to see California have strong laws to protect neighbor's privacy and rights as well and will go beyond what is required by those laws when it's the right thing to do.

Re: Rent the Backyard (YC S19) wants to build a studio apartment in your yard

#55

Post by sjg007 »

blunte wrote: post #29

People who can afford their home will not like watching their property values and quality of life decline because a neighbor “rented” its back yard. Taking the Uber approach - ignoring laws - won’t work here, so this business is entirely at the mercy of permit laws. I find it astounding that some ideas get prominent backing. Furthermore, home owners will discover that having people travel alongside their homes to rea…

Accessory dwelling units are the thing that most municipalities are into now in order to meet affordable housing mandates. I guess this is a way to finance the construction and try to be the next airBnB. I wonder how it will work legally? I get the financing angle... but you’d have to attach to the primary mortgage (or a second one) I assume. Once the unit is built what’s to prevent the homeowner from reneging on the deal? How would it work if the homeowner wants to sell? Is the deal similar to how a solar lease works? An ADU will cost $150k basically and financing it shouldn’t be difficult but I can see the appeal for and end to end. I assume the homeowner is effectively on the hook for the financing and some minimum 50% term reduces the capital cost.

Re: Rent the Backyard (YC S19) wants to build a studio apartment in your yard

#56

Post by sburl »

kyrieeschaton wrote: post #37
Mizza wrote: post #18

I love anything that creates more housing in the bay, but these are 30-year contracts! I can't even imagine getting into a 30 year contract with a company that might not exist in 30 months. What happens when the start-up goes under, or gets acquired, etc? Is the loan made directly to a third party bank?

The contract then binds the acquirer. The more problematic aspect is committing them to buy out the rental on sale of their house.

Hi there - my name is Spencer and I'm one of the co-founders of Rent the Backyard.

It's worth noting that this is actually something the article wasn't great on. If your buyer is excited about continuing this agreement, we're happy to sign the unit over and even take a second position to a new mortgage so you don't ever need to pay anything.

The great thing about a backyard apartment is that it is a permanent improvement to your property and increases the value of the home but you have a great point. We aren't the best short term partner. If you don't plan on staying in your home for a long time, making substantial improvements to your property doesn't make sense. We're focused on helping homeowners be able to stay in their home as the cost of living rises. We're committed to doing the right thing and turning away prospective customers who don't fit this profile.

Re: Rent the Backyard (YC S19) wants to build a studio apartment in your yard

#57

Post by sjg007 »

JMTQp8lwXL wrote: post #17

I don't have a backyard, and nobody I know in my area that also makes six figures+ a year has one, either. This trend has been documented [0]. Granted, my cohort is all earlier in our careers. But with years of saving, much of it prioritized in 401k's, IRAs, and HSAs, I don't have enough left for a down payment on a single family residence. [0]: https://www.washingtonpost.com/business/2019/02/21/are-you-c...

I mean.. move and work from home? Or sacrifice some of the retirement savings to get a down payment? Or wait for the market to crash?

Re: Rent the Backyard (YC S19) wants to build a studio apartment in your yard

#58

Post by sjg007 »

walshemj wrote: post #14
Havoc wrote: post #3

>In places like the Bay Area haha was looking for that. My first thought on reading the headline was London. Shed renting is actually a thing there. Next though...SF But yeah - I totally think this has legs. I live in a smaller more modest space than I could afford. Works for me.

yes for slum landlords which is all very well until you get busted by the authorities.

I think England is notorious for slum lords and that tenants have very little legal protections.

Re: Rent the Backyard (YC S19) wants to build a studio apartment in your yard

#59

Post by sjg007 »

stcredzero wrote: post #32
simonebrunozzi wrote: post #7

Earlier quoted context omitted.

I will try. In the US, there is the concept of Accessory Dwelling Unit - essentially, you can build a small shed in your backyard with a much simpler process, including the paperwork, permit, etc. If you are a homeowner, you can do that yourself - it means taking care of the permits, finding a construction company, etc, and putting money down, probably in the ballpark of 100-150k to do a good job. After this, you can…

If you do this with "Rent the Backyard", or by yourself, it means your house can't be sold until you pay the loan. You probably thought of this already, but I have to ask: What if "Rent the Backyard" is the lender? Couldn't they have a provision in the loan contract allowing the homeowner to move out? What if Rent the Backyard forms an entity with the homeowner, and sells the lot to the entity?

I doubt the lot is subdivided. I’m guessing construction lien.

Re: Rent the Backyard (YC S19) wants to build a studio apartment in your yard

#60

Post by sburl »

AnimalMuppet wrote: post #46

I see a few issues. First, the local zoning commission may not allow such units. Second, my dog uses the backyard on my dog's schedule, not the renter's. And the renter may dislike walking through a minefield to come and go. Third, where's the renter going to park?

Hi there - my name is Spencer and I'm one of the co-founders of Rent the Backyard.

You're totally right about possible zoning restrictions in most places. The climate in California has really changed in the last two years to allow what the state calls "accessory dwelling units" or ADU (https://www.sfchronicle.com/bayarea/article/Are-accessory-dw...). These laws cover everything from parking, to setbacks, to privacy requirements. We'll go beyond what is required by those laws when it's the right thing to do.

These new laws have led to an explosion of building. 4300 of these units were permitted in California last year with 187 in the City of San Jose -- our main focus to start.

We love dogs too but this is definitely an issue. Ultimately, this is a product you'll have to decide works or doesn't work for you :)

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