Beginnings of Walker-Ramos back unit. The concrete foundation has been poured and there are some steel beams in place.

North Park residential housing lots often feature a diverse array of habitats crammed into a space intended for a single home. An old, craftsman house may be complimented by a granny flat behind it or (another popular option) a two-story structure with a pair of apartments above street-level garages. If you drive down random alleys in the neighborhood you can find numerous examples of the latter. Over the years, many locals have found a way to get the most bang for their buck by building extra rental units on their properties.

Times seem to be changing, though. Because building costs are skyrocketing and parking requirements are falling off the map a new trend is developing — the bulldozed lot. The old houses, granny flats and two-level apartment units are being replaced by larger, single-structure, multi-unit complexes that take advantage of the entire lot. Larger developers are spearheading these projects, and, when completed, most of their units hit the market with high rental rates.

They are building a stand-alone three-story, 1490-square-foot, two-bedroom/two-bath structure in the middle of their backyard. (Artist's rendering of completed project).

William Walker and his wife, Olga Maria Ramos, could have sold their two adjacent lots on Ohio Street to a developer that would have demolished their 1925 home and one-bedroom, alley access rental unit to pave the way for a project such as this. Instead, they chose an old-school route. They are building a stand-alone three-story, 1490-square-foot, two-bedroom/two-bath structure in the middle of their backyard.

The project has been taking shape for the past five or six years. Their original vision was a larger structure with four units. This concept was discarded when they realized it wasn’t financially feasible. They then considered an accessory dwelling unit (aka a “granny flat”) to take advantage of the city’s recent program that offers homeowners breaks for building these structures. This idea received the kibosh when they discovered that their neighborhood did not qualify for the program’s benefits.

“We can’t really start framing until this powerline is out of the way.”

“The reason why we didn’t do that is because we are multi-family zoning and that is allowed only in single-family zone areas,” Olga Maria explained. “I guess the theory was to protect lots that could be developed with more units. They don’t let you have a granny flat because this plan is cheap and very easy if you have a lot where you can build more units because they want to exploit that possibility. Unfortunately, only investors with a lot of money can do that. No homeowners…unless you’re rich.”

So, after considering other options, they settled on the two-bedroom/two-bath concept. The first step was getting their building plans approved and weathering the wave of “soft-costs” — expenses that aren’t connected to the physical construction of the structure. After shelling out roughly $35,000 of their own money to cover various fees they were in business. Their plans were approved.

As the time to build approached, they lucked out at a friend’s party when they met their future contractor. He agreed to take on the project for cheaper rate than a traditional architect would have run.

“The architect will charge you up to 20 percent of the construction costs if it’s just a cookie-cutter. If it’s going to be more trips to the city to fight exceptions and the city’s rules, they are going to charge more,” Olga Maria said. “It probably would have cost us $75,000-85,000 in architect fees had we utilized an architect rather than doing it ourselves.”

Now the time had come to go to the bank. As William explains it, “it was initially a bit of a game to see how we could keep the design, and the design elements that we wanted, but still meet these numbers that the bank was looking for.” They were eventually approved for a $350,000 loan. The loan included $30,000 for additional city permits which, when combined with the $35,000 they had already paid out of pocket, add up $75,000. 19 percent of the project’s budget would go towards paying soft-costs.

“The bank matches the funds because it’s a construction loan,” Olga Maria explained. “They approve you as long as you can prove that you can finish with that amount. Yet, they understand that you can go over or it can be a little less. They will at least approve you for what they think will be necessary when they see the plan, and if there’s a commitment from a contractor. It could be less, but if it’s more you have to come up with the money out of pocket. The bank believes that it’s going to be done with $320,000 and we hope it will be built for no more than $320,000.”

At this point, the construction progress is minimal. The concrete foundation has been poured and there are some steel beams in place. It may remain this way for a spell as they have run into their first mid-construction headache. A powerline that runs from a streetlamp through their neighbor’s property is apparently too close to the new structure, and it can’t be re-routed. The options are either new building plans, or a creative fix. William and Olga Maria chose the latter.

“The compromise was our idea,” William explained. “What if we converted this streetlight to a solar-powered light? I don’t know if you’ve noticed in North Park that there are a handful of solar-powered streetlights. That was an uphill battle. Nobody knew anything about the program for it. We couldn’t get in touch with the right person.”

He continued, “It could be as much as $8,000. The city is going to try to see what they can do about it. We have to find a contractor that’s willing to install it, hook it up and then, because it’s out by the street, we have to have a special permit to do that. It’s a ‘right of way’ permit, and that’s several thousand dollars because that’s the city’s property.”

William and Olga Maria are cautiously optimistic that the streetlight issue will be resolved soon. In the meantime, they are about $120,000 into the project as they await word that it can be continued on its current course.

“We can’t really start framing until this powerline is out of the way,” Walker said. “We’re in a holding pattern until we get this fixed.”

Since the mortgage on their front house is now combined with the loan for their construction project, William and Olga Maria are nervous when it comes to roadblocks and delays.

“If the project doesn’t complete on time, the bank treats that as being in default and they could start a process of trying to foreclose,” William added.

It has been a tough slog so far, but Olga Maria still feels that it’s worth it, and that other homeowners, if motivated, should go for it.

“If you have the strength, drive, conviction and desire and it’s a dream that you have, I would say pursue it. But, be aware that the path is a difficult one full of unexpected circumstances."