Buying a home in Los Osos

Approvals before a new home

The County requires a growth rate allocation for each new home inside the urban reserve line, and in the sewer service area its waiting list of undeveloped lots comes first. Where the habitat plan applies, which takes in much of the urban area, a project needs habitat credits reserved and the plan's fees paid before the building permit, and the County issues the Certificate of Inclusion with the permit. New building on basin water also needs a water offset: older fixtures elsewhere in the same water provider's area are retrofitted to save more water than the new home is expected to use. The County notes that other site requirements can apply, such as State rules where Morro manzanita grows.

Sources:San Luis Obispo County, Los Osos residential growth rate allocationSan Luis Obispo County, Los Osos Habitat Conservation PlanSan Luis Obispo County, retrofit-to-build requirementSan Luis Obispo County, Los Osos Habitat Conservation Plan and Morro manzanita

The plumbing retrofit at sale

A home that uses Los Osos Groundwater Basin water has to have older toilets, showerheads and faucet aerators replaced with water-efficient ones when it sells, and the retrofit verification form goes to the County before title transfers. It is one more item for the escrow timeline.

Sources:San Luis Obispo County, Los Osos retrofit-on-sale form

No ADUs, and a capped number of vacation rentals

The County says accessory dwelling units are not allowed inside the Los Osos urban reserve line at this time. A vacation rental needs a Minor Use Permit under a town-wide cap and a spacing rule, and is allowed only in an existing single family home, not in an ADU, a multifamily building or a mobile home park.

Sources:San Luis Obispo County, ADU pre-screening checklistCalifornia Coastal Commission, Los Osos vacation rental amendment report

The sewer and new building

The County's plan says major development stalled under the regional water board's order on septic discharges and a sewer permit condition that limited service to undeveloped lots until the community plan and the habitat plan were adopted. A new home now goes through the allocation, habitat and water rules above.

Sources:San Luis Obispo County, Los Osos Community Plan

Pre-qualification letter in Los Osos

In Los Osos, the listing agent reads your pre-qualification letter beside an escrow with a step of its own. The seller of a home on Los Osos Groundwater Basin water has older toilets, showerheads and faucet aerators replaced and sends the County's retrofit verification form before title transfers. Your closing date has to hold that. Virtually all of the community lies in the Coastal Zone under the County's permits. If you plan to build new inside the urban reserve line, you face a growth allocation, a water offset and, where the habitat plan applies, habitat credits and fees. A letter on an existing home does not touch those, but a construction plan does. FEMA's maps show flood zones along the bay shoreline and Los Osos Creek. The fire map splits the community between the State's responsibility area and the local one, with Very High, High and Moderate zones in each. So the insurance premium a lender counts in your payment depends on the parcel. For a home above the county's conforming limit, your letter names a jumbo loan rather than a conventional one. The letter we write names the program and the amount your file supports, and states plainly that it is not a commitment to lend.

Sources:FHFA conforming loan limits by countySan Luis Obispo County, Los Osos retrofit-on-sale formSan Luis Obispo County, Los Osos residential growth rate allocationFEMA Flood Map Service Center, Los OsosState Fire Marshal, fire hazard severity zone map

More about pre-qualification letter

Investment property in Los Osos

In Los Osos, a vacation rental needs a Minor Use Permit under a town-wide cap and a spacing rule, which sets the rent a DSCR lender can count here. It is allowed only in an existing single family home, not in a multifamily building or a mobile home park. If you have not been issued that permit, you plan on long-term rent, which is the rent a DSCR lender reads on the appraiser's schedule. The County also says accessory dwelling units are not allowed inside the Los Osos urban reserve line at this time. So a plan to add an ADU and finance it to rent is not open to you here until that changes. Until the County changes either rule, what you buy in Los Osos as an investor is an existing single family home with a tenant in mind.

Sources:California Coastal Commission, Los Osos vacation rental amendment reportSan Luis Obispo County, ADU pre-screening checklist

More about investment property