In 1989, my parents bought an empty lot in a neighborhood with good public schools. They had a local architect design their home, hired subcontractors to build the bones, and over the next decade chipped away at the finishes. I remember being allowed to draw with chalk on the concrete floors before my dad had installed the wood flooring. My parents built a 600 sq. ft. in-law unit (or an Accessory Dwelling Unit, as they’re now called) with its own access, kitchen and bathroom, and they rented it out to artists and young professionals. At the time, the $600/month rent covered a good chunk of their mortgage.
Since then, in a familiar Bay Area rite of passage, we’ve watched family and friends move away as housing costs skyrocketed. My family decided to build another ADU, which would allow them to age-in-place, while providing a naturally affordable home in our community.
We visited the city planning office, sketched out designs with architects and interviewed contractors. Each time we built momentum, we’d get held up by the complex process and difficulty of nailing down a budget. It felt like a choice between a slow and expensive traditional design-bid-build process and buying one of the many prefabs of variable quality and no ability to customize.
We spent time with local architects and builders to understand their perspective on what’s not working. They felt the need to pad their bids to account for wasted time selling, uncertain project volume, and the inherent variability of site conditions. We learned that building could be more affordable with steady work, pre-vetted and clearly-scoped projects and the right alignment of incentives.
$3.5m in funding for an modern design-build platform
We built Cottage to create the modern design-build experience we wanted as homeowners. Cottage is a one-stop-shop for your custom ADU -- we handle feasibility, design, permitting and construction so you don’t have to. Our design platform gives you transparency on scope and costs, and lets you enjoy the fun parts of design without any of the hassle. We’ve teamed up with the Bay Area’s best general contractors to unlock scaled pricing and skip the wait lists.
With our first ADU completed and dozens in design and permitting, we’re excited to announce our $3.5m seed round of funding, co-led by Susa Ventures and Base10 Partners.
Building ADUs the smart way
There’s a misconception that ‘dropping’ prefabricated homes into backyards will be the solution to the housing crisis. We found that in practice, you don’t save any money or much time compared to the right builder, while sacrificing a lot in quality and the ability to customize. Prefab still requires the same permitting, site prep, foundation and utility tie-ins as site-built construction -- these are the hard and variable parts of building an ADU, not the framing and finishing. The savings of building off-site are more than offset by the cost of trucking and crane rental. That’s not to mention that prefabs can’t be craned in on lots with trees and power lines.
Cottage’s custom-designed and site-built ADUs in the Bay Area start at around $100,000 for a garage conversion, $150,000 for a one-bedroom, and $175,000 for a two-bedroom. That means tens of thousands in savings for homeowners compared to the prefab ADU route, on a comparable end-to-end timeline.
Keeping families close during the pandemic
COVID-19 and the resulting shelter-in-place have reversed a century-long trend of shrinking household sizes. We’ve spoken with hundreds of homeowners who are fast-tracking their plans to create flexible space on their properties. Families are welcoming their adult children back into the nest, pulling elderly parents out of senior living centers, and looking for a quiet room to take a work call or serve as a virtual classroom. My parents are finally getting their ADU now, as are two other neighbors on our block.
In the last nine months, we’ve taken on projects in 20 municipalities across the Bay Area. With our new round of funding, we’ll continue to invest in our proprietary design technology, network of contractor partners and expand our service within and beyond California. We’re building the foundation of something special, and we hope to play a role in making housing more affordable in as many places as possible.