New Construction in the South Bay: Buy New, Rebuild, or Create the Home You Want

Not many in the core Beach Cities. Most new detached homes in Manhattan Beach, Hermosa Beach and Redondo Beach are individual homes or small projects built on previously developed property rather than large subdivisions. Buyers looking specifically for a traditional new-home community may need to expand the search beyond the core South Bay.

Yes. Finished and nearly finished new homes do come to market, including builder spec homes. Inventory is much more limited than in newer suburban markets, so buyers may need to be patient or consider a home while it is still under construction.

A spec home is developed by a builder without a particular buyer commissioning it first. The builder acquires the property, chooses the design and begins construction for eventual sale. If you buy early enough, there may sometimes be opportunities to select remaining finishes or options, although that depends on the builder and how far construction has progressed.

New townhomes, condominiums and smaller multi-home projects are another source of new-construction inventory in the South Bay. Because the core Beach Cities are largely developed, new housing often comes from redevelopment of existing properties rather than large new subdivisions.

Then it may make sense to widen the geographic search. The core South Bay is largely developed, so the conventional tract-home experience is much more limited here than in newer suburban areas of Southern California.

You are buying more than new finishes. The builder has already acquired and carried the property, designed the home, worked through approvals, financed and managed construction and taken on much of the risk involved in turning the property into a finished home.

Not necessarily. The comparison should be between the price of the finished home and the complete cost of acquiring the property and creating the replacement home—not simply the builder's construction price.

The actual construction is only one part of the budget. Depending on the project, there may also be architectural and design fees, surveys, engineering and soils work, demolition, plan review and permits, utility or sewer work, development or impact fees where applicable, construction financing, insurance, carrying costs, temporary housing and a reasonable contingency for unexpected conditions.

These are often referred to as soft costs and preconstruction costs, as opposed to the labor and materials that physically go into building the house.

Not necessarily. You can commission a fully custom architectural design, use a design-build company, begin with a builder who assembles the design team, or in some cases start with one of a builder's existing plans and customize it for your property.

For buyers who do not need a completely custom architectural design, working from one of a builder's established home plans can be one of the more economical approaches. With some of my builder partners, buyers can select a plan, choose materials, finishes and available options, and have the builder handle much of the design adaptation, permitting and construction process.

It is probably the closest South Bay equivalent to buying from a tract builder, but with a home that can be substantially more customized and built for an individual property.

No. The plan still has to work with the property. Lot dimensions, setbacks, height restrictions, slope, soils, engineering, foundation requirements and local approval rules can require changes to the design.

If the purchase depends on remodeling, expanding or rebuilding, yes. I prefer getting the appropriate builder or design professional involved while the buyer is still investigating the property and has not yet given up the protections provided by the purchase contract.

The answer depends on the condition and layout of the existing structure, the lot, what you want the finished home to become, local rules and the economics of each approach.

Existing nonconforming conditions can also matter. In Manhattan Beach, for example, certain improvements to nonconforming structures are subject to a reconstruction-cost test that looks at proposed work together with certain prior permitted work over a specified period. If the applicable threshold is exceeded, additional conformity requirements can be triggered. Other South Bay jurisdictions have their own rules, so buyers should not assume that a single “50% rule” applies everywhere.

No. Total square footage is only part of the story. The dimensions and shape of the lot, setbacks, slope, access, existing improvements and local rules can be just as important. A somewhat smaller lot with a useful building area may work better than a larger property with significant limitations.

Potential issues include zoning, lot dimensions, setbacks, allowable height, easements, existing legal uses, slope, geology and soils, drainage, utilities, driveway and construction access, parking requirements and any special review that applies to the property.

It can. Coastal properties may be subject to additional rules or review depending on the location and scope of the project. That can affect design, timing and the approval process, so I would not assume that a project that works on an inland property will necessarily work the same way closer to the coast.

Potentially, and if an ADU is part of the long-term plan it can make sense to consider both from the beginning. The placement of the main house can affect access, privacy, parking, outdoor space and how much usable room remains for the ADU.

Some properties can. Depending on the parcel and the rules that apply, possibilities can include an ADU or JADU, two-on-a-lot arrangements, a duplex or other permitted multifamily use, and on qualifying single-family properties, development or an urban lot split under California SB 9.

SB 9 does not mean every single-family lot can automatically be divided or developed with four homes. Eligibility requirements, existing housing conditions, lot configuration, local objective standards and other restrictions still have to be reviewed for the particular property.