SAN RAFAEL (KPIX 5) — There’s no doubt the Bay Area needs more housing and now a group of entrepreneurs with an unusual business model are pitching in to help.

The Arizmendi Bakeries in the Bay Area are not typical companies. They’re co-ops, which means the employees are also the owners. They’ve been very successful but the workers still face the same housing challenges as anyone else.

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“It’s hard for us to keep our people,” said Frank Mason, a worker/owner at the Arizmendi Bakery in San Rafael. “Right now, the cost of living in Marin means a lot of people have to commute to the bakery because they can’t afford to live here.”

But the co-op also sees that problem as an opportunity and has created a new venture called “Roots to Returns,” a construction firm specializing in backyard housing units. A change in state law now allows people to build auxiliary dwelling units, or ADU’s, on their property and the co-op plans to take full advantage of that.

“It’s kind of like dividing the wealth,” co-op developer Mahasin Munir said. “There’s already space and there’s people who don’t have enough space. So why don’t we just use the space we already have?”

Ruel Bernard is constructing a one-bedroom unit in a backyard in Oakland to be his retirement home. But as a founding builder for Roots to Returns, he will also help develop a design that can bring the price down to about $150,000.

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“There’s only so many ways in which to fit into a backyard,” Bernard said. “So, we’ll have two or three designs.”

The co-op wants to create affordable two-bedroom homes for workers in the service industries with a rent payment goal of $2,000 per month. Property owners agree to the deal and the co-op handles construction and financing. The co-op retains ownership of the building and leases the space from the landowner.

“So, all you have to do is just allow someone into the space and part of the rental income goes to you and part of it goes to creating more affordable housing,” explained Tim Huet, co-founder of Roots to Returns.

There is still a lot of work to do to get the project off the ground. But organizers at Roots to Returns say they hope to begin construction of their first ADU by the end of the year with an eventual goal of building eight homes per year.

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It’s not exactly a recipe for getting rich, but since its beginnings 22 years ago in that original bakery, the co-op has understood the value of cooking up a little good karma.