Builders propose a community of micro-homes in Atascadero — and they’d start at $250,000

Will building smaller, “affordable by design” houses really make Central Coast homes cheaper? A San Luis Obispo County builder will test this theory with a new Atascadero project.

Cal Coastal Properties on Nov. 12 will present Grand Oaks Paseo, a 30-unit “micro-home” development, to the Atascadero City Council. The project will be made up of 500- to 900-square-foot houses and live-work spaces on a 1.7-acre El Camino Real property near the Kmart shopping center.

The development will include a mix of 26 one-, two- and three-bedroom homes, along with four units featuring office space on the ground floor and attached housing on the top floor.

The development also includes a community event center and outdoor gathering spaces and will have 80 on-site parking spaces.

Because the homes are smaller, developers project they will cost about $250,000 to $350,000, depending on the size, said Ted Lawton of Cal Coastal Properties.

The builders want the monthly mortgage payments to compete with market-rate rents — Lawton estimates they’ll run buyers $1,400 to $1,800.

Grand Oaks Paseo map.jpg
The Grand Oaks Paseo is proposed for a parcel on El Camino Real in Atascadero near the Kmart Shopping Center and the San Anselmo Road crossing over Highway 101. Cal Coastal Properties

What are micro-homes?

The homes aren’t tiny homes or manufactured houses — they’re just smaller than most newly built housing, Lawton said. Buyers will be eligible for traditional lending options, including U.S. Department of Agriculture-backed loans, he said.

Homebuyers will own the land under their houses in addition to the structures, said Jack Phelan, one of the partners building the development.

There may be some kind of homeowners’ association, but it will be “minimal and based on the affordability equation,” Phelan said.

“We really feel that affordable housing on the Central Coast needs to be ownership-based, rather than rental-based,” Lawton said.

A median-priced San Luis Obispo County home — meaning half are more expensive and half are cheaper — costs about $640,000, according to an August report from the California Association of Realtors (CAR). Only about a quarter of residents can afford a home at that price, according to CAR’s housing affordability index.

Grand Oaks paso bbq.jpg
Thirty 500- to 900-square-foot micro-homes are planned for a 1.7-acre site on El Camino Real in Atascadero, a style similar to this community used as inspiration in the planning documents. Cal Coastal Properties

City staff appreciate the quality of the planned homes and see this type of development as a new option for housing in Atascadero, said Phil Dunsmore, Community Development director.

“We think it’s an excellent new concept for the city,” he said.

Atascadero would welcome additional small home developments, provided they fit into the surrounding neighborhoods, Dunsmore said.

“I think it’s truly what the state is wanting to promote,” he said.

Lawton, Phelan and Jeff Landon have spent the past three years developing plans for the community. Pending City Council approval, they hope to complete the project in 16 to 24 months, Lawton said.

“We see that there’s just such a need for this type of housing,” he said.

Correction: This story was updated to adjust the expected price range for the homes to $250,000 to $350,000.

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Lindsey Holden writes about housing, North County communities and everything in between for The Tribune in San Luis Obispo. She became a staff writer in 2016 after working for the Rockford Register Star in Illinois. Lindsey is a native Californian raised in the Midwest and earned degrees from DePaul and Northwestern universities.