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When Is It Worth It To Build A Finished Basement

Updated: Dec 19, 2019


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Q: I would like to purchase an older home in San Jose with a basement that needs replacing. I’d like to make the basement a finished living space. What are the potential issues I might face in doing this and what should I be aware of or concerned about?


A: Creating a full finished basement under an existing house is an expensive and timely process, but in certain areas can be well worth it. That’s especially true if you are already at the maximum floor area allowed for your city. In San Jose the maximum floor area ratio (FAR) for most single family homes (not requiring a special review) is .45 represented as 45% of the square footage of the lot. For example, a typical lot in San Jose is around 6000 square feet. With a FAR of .45, the maximum square foot for the house would be 2700 square feet. (note 1)


Adding a basement can sometimes give you extra space over the allowed FAR and San Jose is one of those cities. I’ve had some clients get an extra 1000 square feet to their house by adding a finished basement. Some cities do include basements in their FAR calculation, so check with the local planning department to confirm the city regulations regarding basements.


The new basement will have to comply with current building codes including ceiling heights, egress (exit) wells, stairs and possibly a sump pump/sewage ejector. You will also need to hire an architect and/or structural engineer to do calculations and design the concrete foundation structure.


The new basement, which will be the new foundation for the house, will need to have hold downs that anchor the wood structure of the home to the foundation. It is also likely that the original house will have to have shear walls added to it. Shear walls are walls that are anchored to the foundation with anchor bolts and have special plywood and nailing. The walls must be continuous from the foundation to the roof framing and should not have any openings cut through them. These wall help hold the house together during an earthquake or other ground movement.


While the foundation is being built, the house will be raised up and resting on a few steel beams. The house may be raised up in this precarious position for a few months and the house cannot be occupied during that time.


The price for such an endeavor is determined by how much work will need to be done to the existing house, the construction of the concrete walls and floor of the basement as well as architect, engineering, and city fees. A safe calculation for what it may cost is to take the typical cost per square foot for the wood framed portion of your home and add 20%-25%, for example.


For more detailed information on residential basements in San Jose please visit the Development Services website: http://www.sanjoseca.gov/index.aspx?NID=206


Click here and download the document titled, “Basement Policy.”


1. In San Jose you may be allowed a larger FAR if you apply and go through the review process called a “Single Family House Permit.” This special review will cost more in city fees as well as increase the time it takes to review the home with the Planning Department.


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