Ask an Expert (Alexander Clark), better to have SFR or 2 Units in Cow Hollow

“Hi there:
I own a two-unit, two-story building on a lot that is 45 feet deep in Cow Hollow, in an area bounded by Union, Pierce, Chestnut and Buchanan Streets. I am trying to decide whether or not to try to merge the units legally into a single dwelling unit. It is clear that the process is complicated and not a slam dunk (in fact, the City is currently considering making it even harder to merge units) but it is still pretty tempting to try. What I would like to know is, is the building overall worth more as a two-dwelling-unit building, or would it be worth more as a single-family home? Is the answer to this question likely to change over time? Please assume that I have no tenants in either unit for the purposes of this question.
A short description: each unit is approximately 850 square feet. There are three small-ish rooms in each unit, plus a single unrenovated bathroom and a kitchen. The house was built in the early 1900s. There is a full basement under the structure.
Two things I forgot to add in my original letter are (i) that the house is located on an “alley,” and (ii) that there is no garage. Don’t know if that matters or not.
Thank you for your help!-DK”
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As answered by Alexander Clark, sfnewsletter

DK,
It sounds like you have the location nailed, but not if you are on one of the “less desirable” alleys. That could play heavily as to whether you keep two units or go SFR. I would have to say, given the limited information you present, either keep it as two units, remodel and sell as TICs, or remodel as SFR, keeping a unit below (basement) as a technicality. That would avoid any conversion headaches you will undoubtedly encounter. Make sure to read: Our post on McGoldrick’s proposal, and don’t hesitate to contact us if you have any more questions.

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