If you own a waterfront parcel in the County, or hope to purchase one, I have detailed below some items to take into consideration. Historically, waterfront parcels were the most coveted investment in the islands but, due to ever changing regulations, they are now the most confusing parcels to develop. For REALTORs they can be a challenge to sell due to our inability to give buyers concrete answers to their questions while on site.
Important Considerations
Timing
Once you purchase a waterfront lot it is prudent to move forward with your plans as soon as possible as the regulations in the future may change and what you had hoped to build at the time of acquisition may not be approved in the future. The County has said they will never render a parcel unbuildable, but regulations may restrict the size of residence and will dictate the location of where you can build on the lot.
Residential Pre Application (RPA)
This is a conceptual approval of the footprint for the residence under the rules that exist at the time of review. While the RPA report is non-binding on the County, constructive reliance can be used for planning your new home including the home site, setback, tree removal, the location for the driveway, well and septic, if applicable. This is a valuable tool to utilize upfront so that your design team and contractor have solid direction from the County early in the process.
Unfortunately, the RPA process is now taking up to 6-9 months to get approval from the County due to shortages and turnover of staff and lingering COVID issues. In the past, we were able to obtain an approval within our typical 30-45 day feasibility study as contained in the contract, now we can only get the buyer confidence but nothing in written form from the County.
Your designer or architect may process the RPA for you as part of their service. If not, you can hire a land use consultant. The cost to process the RPA with a land use consultant is around $2300-$5000 which includes County fees. It varies based on the complexity of the lot.
As an RPA is not binding, and in light of constant regulation changes, one should only be used for near term planning. To bind or vest your project under the current rules, a complete permit application must be submitted to the County. Once the application is deemed complete, that becomes the effective date prescribing which version of the regulations shall apply.
Shoreline Setbacks
This is a difficult topic to address. The Critical Areas Ordinance (CAO) was approved in 2013 and significantly altered the setback regulations by placing the majority of the shorelines in the County into a Critical Areas designation. Basically, a very simple definition of the current setback regulation impact includes there being a “no touch zone” in the first 35 feet from the shoreline, although a 5-foot trail to the beach is permitted. Only dead, dying, and dangerous trees may be removed in the area located behind the first 35 feet to a total of 110 feet from the shoreline. It is possible to clear some of the brush for view and fire protection in the 110 foot zone with an arborist report. You should count on around 100-110 feet back for a water quality buffer on a lot that is under 1 acre. If the lot has slope, you may be closer to 150 feet back.
In addition to the CAO regulations impacting shoreline properties, the Shoreline Master Program was updated in 2018. The Shoreline Master Program dictates land use within 200 feet of the shoreline.
However, if the vacant lot has homes on both sides, the County will consider averaging the setback between the other two neighboring homes.
Having shoreline screening on the lot is also taken into consideration when the County determines the set back.
Due to the individual geometry of each lot, the geological conditions at the water’s edge, the adjacent property home sites, and the amount of vegetation available for consideration as screening, each setback can vary. One size does not fit all; and given the complex and somewhat subjective nature of shoreline setbacks, we recommend obtaining professional advice to assist in planning your project.
Additional rules regarding house location include the possibility of an unstable bank, which requires a site visit by a coastal geologist or engineer; and the fact that all the salt water is protected "fish habitat", which requires a proposed development impact analysis prepared by a marine biologist. Shoreline wetlands may also play a role in the setback.
The “no net loss” report will be approximately $4,000. The geologist soil stability report will also be around $4,000.
Property Survey
It is always prudent to have the corner monuments properly identified for any construction project, but it is most important on the waterfront. If you don’t know the lot line measurements, you may design a 65 foot-wide home then find out you may only build a 50 foot wide home if the shoreline is only 100 feet wide (you are limited to a 50% lot width coverage). Having a survey will also confirm any encroachments and other issues that you may need to address.
The surveyor will be around $2500-$5000, they are required to determine the top of bank location, topography, impact to the lot due to amount of slope, and the corner locations.
Tree Removal
A tree removal permit is required for any tree removal work done in the shoreline (200 feet from the water’s edge) When tree removal is a necessary part of construction, trees to be removed must be clearly noted in your plans submitted for your building permit. Your plat Covenants, Conditions and Restrictions (CC&Rs) may also have an impact on your tree removal plan. If the plat CC&Rs are more restrictive than the County, they override the County regulations and guide the process.
For shoreline properties with existing development, tree removal may only be done with a stand-alone tree removal permit. Consultation with a certified arborist is recommended to discuss the condition of your trees and how the shoreline regulations would apply.
A tree removal plan will catalog and locate all trees on the lot and identify those designated for removal. Basically, to retain views, the County does allow 4% trimming per year or 40% over a ten-year period. Good luck with figuring out the calculation, you may want to consider hiring an arborist to calculate the 4%.
Building Plans
Having a clear, complete plan set is an essential early step in the process of building your new home. You may select an architect or designer to work with or engage one of the several general contractors on the island who provides design services. The design process should include working with an engineer for the structural elements of the design.
The plan creation process is typically 6-8 weeks or more. The fee range is too wide to quote as it depends on the complexity of the design and whether the design/architect service provider stays involved and conducts the inspections during the course of construction.
Builder
It is prudent to interview several general contractors and find one who is compatible with you and your goals. A new build or significant remodel can be a lengthy process and it is not always about the pricing, it is important to find a general contractor that you communicate well with. Your REALTOR, architect or designer will have suggestions as to which builder to use. Obtaining bids may take another 120-180 days as the contractor will bid out the major components with their subcontractors. On certain types of jobs, contractors will only work for time and materials as the homes are just too complex. At this time, many of the contractors have 1-3 year wait lists.
Permits
The architect, designer, land use consultant or your contractor can submit to the County for permits. You may submit your plans directly as well. The permit process is quoted by the County at 10-12 weeks, but additional time may be needed depending on the complexity of your home design and completeness of your package.
Many factors come into play at the San Juan County building department. The County provides a detailed checklist for each type of permit. While comprehensive, the volume of paperwork and order of operations may be overwhelming to someone unfamiliar with the County’s process. Your file travels through several departments with each reviewing their component and hopefully issuing approvals. The components include, but are not limited to, water source and testing, septic permit, storm water management plan, energy study, engineering, lot lines and corner stake confirmation and possibly an archaeological, no net loss, wetlands or geological study.
Archaeological Sensitive Areas
Cultural resources are evidence of past human activities. It is not uncommon for waterfront lots to have items of cultural significance or located in the buffer zone of an existing identified site (Within 500 feet). To confirm whether the lot you own or are considering purchasing has archaeologic sensitive areas, a property owner must contact San Juan County. Due to preservation and protection of the sites, the maps are not of public record.
If the land is included in a buffer area or is noted as containing sensitive materials, an Archaeological Report must be obtained. These reports are in the range of $4,000-$5,000 depending on the size of your site. You do not want to build in the area containing sensitive materials as it will add tens of thousands of dollars to the cost of your home. The archaeologist must sift through the material while any excavation is in process.
Flood Insurance
As you may be aware, the majority of our waterfront properties are designated as being in the flood plain as determined by the current Federal Emergency Management Act (FEMA) maps. What you may not realize is that almost 90% of the homes and other structures, when further analysis is done, do not actually require flood insurance. Contacting a surveyor to process a Base Flood Elevation (BFE) for your property should be on your checklist. The surveyor’s fee for the elevation certificate is around $2300-$2500. The certificate is needed to obtain flood insurance or to obtain a Letter of Map Amendment (LOMA) which is required to waive flood insurance. Processing a LOMA will be in the range of $500-1000 over the cost of the Base Flood elevation. Bottomline; elevate the home above the flood plane to avoid flood insurance.
Budget
Again, this topic is very custom and will depend on the type of home you plan to build and your building site. I know of some contractors on the island that can build for $650 per foot but that would be for middle level construction quality. I know of many homes that have been built on the island for $1,000 and more per foot. Your budget needs to be established then monitored with every change order processed. With today’s cost of labor and materials, you should budget $650-$750 per foot.
Site Development Costs
You should budget around $65,000 for a septic system installation and $35,000 for well drilling and associated plumbing with a bit more if you plan on a water storage tank and a well house for the equipment.
Utility line trenching will vary due to length and terrain, but typically the excavation costs run $30 per foot unless you hit rock then it can be as high as $50 per foot. Do not forget to drop fiber in the trench for future use.
For your power, you can contact OPALCO and have them locate the closest transformer to the building site, then provide you the distance that the trench will need to run. This allows you to bid out the secondary power line installation with the local excavators.
Of course, it is easier to have your general contractor include the site development costs in their bid or estimate.
Certificate of Water Availability
If the well is located within 1000 feet of the shoreline, you must hire a hydrologist to work with the local well service provides to draw down the well and prove to the County the volume it produces. Per County regulations, this process must be done during July-October of the year. If the well had been subject to salt-water intrusion in the past, this draw down may very well increase the amount of intrusion as it is very taxing on the well. The cost for the hydrologist is $10,000-$15,000. The local well service provider will charge under $5000 for their time on site. They must also monitor any nearby wells during the draw down process on the subject well. It can be a scary process.
Water Catchment Systems
An alternative to drilling a well or using an existing well on the shoreline is a roof catchment system and holding tanks. These systems can be designed by our local well service providers. They are a good option as they qualify for a water source with the County for a building permit. However, most institutional lenders do not favor the systems so you may be required to use a portfolio lender. Your rates and terms will be affected as the loan will not be sold into the secondary market.
Stairs to the Beach
If you desire stairs to the beach, the process is straight forward if the height is under 15 feet. That application will be a standard permit which requires plans, engineering and a no net loss study along with the Geologic Hazard Assessment and Evaluation (soil/bank) stability report, archaeological and wetlands might be applicable as well. If the stairs require more than 15 feet, then you must apply for a Shoreline Substantial Development Permit which requires a public hearing, and the decision is made by the hearing examiner versus staff.
Mooring Buoys
Mooring buoys were in high favor with our County and the various governmental agencies involved in the permitting process as they were less invasive on the eel grass than anchorage. That has all changed, now the Tribes are objecting to the buoys so applications in process for the last 2 years are on hold. Until this is worked out, don’t count on obtaining a new mooring buoy. If you are buying a lot or home with an existing registered buoy, be sure to transfer the buoy to your name at closing by using the proper 16 page form from DNR.
Docks
If you want a dock, you should buy a parcel with an existing dock or community marina. It is very difficult to obtain a new dock permit in our County. A new dock will cost in the range of $400,000-$600,000 or more depending on size and take 24-30 months of stress and a good attorney. No matter what, it will be a shared dock.
Professionals
I highly recommend hiring professionals at the start of your project, not that our County employees aren’t pleasant to work with and always helpful, but they are often busy or unavailable. Further, the regulations can be confusing, and the consultants work with the County on a regular basis and are more familiar with the procedures. Permit consultants in particular monitor the entire process leading up to a building permit application and can also assemble a team of specialists to provide the numerous site-specific reports.
Each professional that is hired to evaluate the site should be interviewed, and you should obtain references from their past clients. The reports are based on science; wetlands are wetlands but their opinions at the conclusion of the study carry the weight. Some issues are arbitrary and can be interpreted either way.
Construction Loans
You can obtain a land loan to acquire the lot then once you have your plans, builder, costs and permits, you can apply for a construction loan. It is convenient if the seller will provide financing for you for a short term such as 1-3 years. Seller provided financing can be less expensive than a land loan at a lending institution as the rates are closer to 5-8% and there are no loan or junk fees. Banks historically, have higher levels of defaults in their land loan portfolio so they currently charge a premium to fund land loans.
The construction loan can be a combination of construction term that will roll over into a permanent loan. You can set the construction period at 6-12 months with the remaining 29 years being the permanent loan portion. During the construction period of the loan, the bank will make regular inspections and disburse your funds based on a percentage of completion. Once the home is complete and loan fully disbursed, they roll it into the permanent loan terms.
Builder’s Warranty
Many property owners believe that Washington State requires a one-year builder’s warranty on new construction, this is not correct. However, most builders will stand behind their product to maintain a good relationship with their client and future referrals.
Conclusion
Other than dealing with the shoreline regulations that require numerous reports to address tree removal, possible wetlands, water quality, setbacks and a higher likelihood of having an archaeologic area, there is no difference in the process as compared to building on an interior lot. Both are about 24-30 months until you walk across the threshold of your new home. This assumes your contractor doesn’t have a wait list and can start immediately after the permit is issued.
As the existing home inventory on San Juan is being absorbed, buyers are now determining that building a custom home may be their best option. The ending product will be exactly what the buyer wants. We still have some lot inventory, but the waterfront lot inventory is very low. To buy a nice level, easy to build on waterfront lot, you need to be over $1,000,000. The lots listed below that price, typically have some challenges such as topography, wetlands, archaeology, long access roads or only offer filtered views.
Written by:
Merri Ann Simonson
simonson@sanjuanislands.com
360-317-8668
8-18-2022