The home at 1516 #A Blake Street is somewhat of an anomaly in Berkeley, California — and it’s not just because it’s a brand new, energy efficient residence.
From up close, the two-bedroom, two-bathroom structure is a modern-looking accessory dwelling unit. But zoom out, and there are two other homes nestled onto the ADUs lot.
The setup is known as tenancy-in-common, or TIC, a form of co-ownership in which homeowners co-own a larger property with others. In this case, the plot of land is divided among three owners: the owners of the three-bedroom, two-bathroom main house; the owners of the studio; and the future owners of the ADU.
It's different from selling an ADU as a condo — a practice that's entered the conversation in some cities looking for creative solutions to creating more affordable housing. In those instances, the ADU has its own parcel number; in other words, the homeowner owns both the home and the land on which it's situated. In a TIC agreement, though, the ADU does not have its own parcel identification.
Instead, it's a fractional ownership model, so each resident owns a share of the overall property.
The newly built 1,150-square-foot residence hit the market last week with a $995,000 price tag, according to a listing on Homes.com.
“A lot of people are priced out of the Berkeley market, but this is a way to be able to afford something that kind of looks and feels like a single-family home, and then to just share the lot,” Jodi Nishimura, the listing agent, told Homes.com in an interview.
An energy-efficient home on a shared lot
Nishimura, an agent with Kai Real Estate, said she expects the biggest challenge in selling the home will be “the education piece.”
“Not only to the public, but with colleagues and helping them understand the current nature of tenancy in common,” she explained.
TIC properties are similar to condominiums in that homeowners own their individual units. But a TIC extends beyond that, with homeowners owning a percentage of the overall property. Residents must sign a pre-established agreement outlining their individual responsibilities.
At the Blake Street property, “there is an HOA and there is a shared liability insurance policy,” Nishimura said. “Other than that, your home is your home, and you maintain it on your own and all of that.”
The biggest draw, Nishimura argues, is that “you’re purchasing a great home at a price point that is affordable.”
The home is priced at $862 per square foot. That’s roughly in line with the value of homes in the Berkeley area, which on average are priced at $860, according to Homes.com.
In addition to its shared lot, the ADU also touts brand-new, energy-efficient features, including an updated foundation.
“A lot of these homes in our community are 100-year-old bungalows on old foundations, and they’ve got old wiring and plumbing and all of that,” Nishimura said. “Everything here is brand new ... That is really hard to find in our market.”
More on this topic: How tenancy-in-common properties can be a way into homeownership