To address the housing shortage in California, bills A.B. 2299 and S.B. 1069 were passed in 2016, requiring cities and counties to allow property owners to build Accessory Dwelling Units (ADUs) in most backyards. However, these bills were temporary, set to expire in 2025, and faced some resistance, with certain municipalities imposing restrictions on ADU construction through parking requirements and HOA regulations. Subsequently, the legislature passed additional bills to eliminate these hurdles, resulting in the permanent establishment of ADU-friendly regulations with the passage of AB976 in 2020. Despite these legislative changes, the primary purposes for having an ADU remain unchanged: either to rent it out, accommodate relatives, or use it as an office or additional living space.
New Laws on ADUs
These new laws require cities to permit the construction of at least an 850 square-foot ADU for one-bedroom units and 1,000 square feet for two-bedroom or larger units. Cities are allowed to cap detached ADUs at 1,200 square feet or at 50% of the size of the primary residence.
In 2021, SB 9 was introduced, enabling property owners to subdivide their lots into two parcels and build two housing units on each parcel. This subdivision allows for independent ownership of the newly created parcels. Consequently, an ADU can be sold if the lot is subdivided, with each owner having their own lot.
Selling ADUs
A new twist in this scenario is AB 1033, which passed in October 2023. This law allows property owners to sell the ADU without needing to subdivide the lot. The structures on the property can essentially be converted into condominiums on a mutually owned lot, potentially offering different rights for each owner.
While AB 1033 simplifies the ability to sell an ADU, it also introduces a new set of challenges, as creating a homeowners association (HOA) necessitates the establishment of bylaws, covenants, conditions, and restrictions (CC&Rs), along with shared maintenance expenses.
San Jose was the first city to adopt AB 1033, and participation from other cities is currently voluntary, so it’s essential to check with your local development department regarding their status. The exciting news is that this means you can remain in your spacious detached ranch home and tell your friends that you now live in a condo!
Sample ADU Unit by RWB Construction – one bedroom, one bathroom, a kitchen with an island/dining table together with a living room all in one space.
Resources
Photos are previous ADU projects of Red, White, and Blue Construction (RWB Construction)
About RWB Construction
Selling or buying a home in San Mateo or Santa Clara?
Seek people who will put their full effort into representing your interests, treat you like a person and not a transaction, and experts who are well-respected in their profession. With over 30 years of combined experience and 95% of their clients coming from referrals, we take great pride and joy in exceeding your expectations.