PERFECT climate! I used to live in the Bay Area. The only thing I miss is the weather.
Wait - I also miss that things are open late. Things close early where I live now. LOL
I used a plastic shed for a bit for 7 chickens - the gray one on the bottom left of @cavemanrich 's post. It worked fine. I cut big ol windows in it and secured them with hardware cloth. It was SUPER easy to modify. I imagine a play house would be, too.
I definitely suggest this route or...