Courtesy of Barbara Clark
- A mother-daughter duo split the cost of a $1.4 million home and a $325,000 accessory dwelling unit.
- It's let Barbara Clark keep costs down in retirement and helped her daughter live in the Bay Area.
- Katie Sandoval Clark said the arrangement has helped her family "pursue what we really want to do."
When Katie Sandoval Clark, a nonprofit executive, was pregnant with her first child in the summer of 2019, she faced a vexing choice.
The Bay Area native, now 37, could continue to work a not-so-lucrative job she loved: using her law degree to lead development at an organization called Fresh Lifelines for Youth that supports local kids affected by the criminal-justice system. Or she could raise her children near her parents and three brothers in San Jose, a city 50 miles southeast of San Francisco where the typical home sold for $1.18 million in December.
Meanwhile, her mother, Barbara Clark, now 67, was facing her own housing dilemma: She was nearing retirement and looking for a house with a payment within the budget of her fixed income.
So Sandoval Clark came up with a plan. With the equity from her mother's existing home — which eventually sold for $1.3 million — they'd have a down payment for another house. Sandoval Clark and her husband, Marshall, who had earning potential that a retiree didn't, could cover the mortgage payments.
"I thought, what if we worked with them to find a property where we could build a second home, a small unit in the backyard, for us?" Sandoval Clark told Insider. "Then we could have our own space, but we could share the cost."
The mother-daughter duo found the ideal property for Clark and her husband, Chris, blocks away from one of Sandoval Clark's brothers in San Jose. It already had a 1,600-square-foot four-bedroom home on it. Then they built a 1,200-square-foot two-bedroom house in the property's backyard for Sandoval Clark, her husband, and their growing family using Villa, a developer that constructs prefabricated accessory dwelling units, or ADUs.
Courtesy of Barbara Clark
The family said that now Clark can help her daughter and her son-in-law with childcare and watch her granddaughters, Sylvie, 2 1/2, and Lila, 11 weeks, grow up.
Building a modern home at a fraction of the cost
Barbara and Chris Clark, 68, bought the main house for $1.4 million, then paid another $325,000 for the Villa home.
On top of the down payment and the ADU costs, the elder couple pays $1,200 in monthly property taxes. Sandoval Clark and her husband pay $3,100 each month, which covers the mortgage.
"We're buying into a stake in the property over time," Sandoval Clark said. "It's something that helps us feel like we actually are gaining some kind of ownership."
Courtesy of Barbara Clark
The cost to build the ADU was less than the median cost of buying a home in the US in the fourth quarter of 2022, which was $467,700.
Clark and Sandoval Clark said that in a few years they're likely to switch houses: The retirees could downsize, while the young family could graduate to the main house.
The cost of Bay Area housing often pushes natives out
The family members aren't the only ones facing these issues. Many adults who grew up in the Bay Area simply can't afford to stay there.
According to Insider's mortgage calculator, if a homebuyer were to put 5% down on a typical $1.18 million home in San Jose with the 30-year fixed mortgage rate for February 2, their estimated monthly mortgage payment would be $6,786. If the homebuyer followed the conventional thinking that a person shouldn't spend more than 30% of their income on shelter costs, they'd have to make about $272,597 a year in order to afford that.
Candy Cheng/Insider
That'd be a stretch even for workers in the tech industry that gives this area of California the nickname Silicon Valley.
For Sandoval Clark, the ADU meant she and her husband didn't have to choose between their careers and raising their kids near family members.
"We'd probably be renting something if it wasn't for this. I would probably not still be in the nonprofit sector. I'd probably be working in a different job," she said. "Our options would be totally different. This has allowed us to pursue what we really want to do."