Accessory dwelling units, or ADUs, have been on the lips of homeowners for years. On the surface, they look to be an answer to California’s growing housing shortage, but legislation so far has prevented homeowners from taking advantage of them — until recently.
Earlier this year, the state of California passed new laws surrounding ADUs to ease development hurdles and promote a housing solution. The move opens up a wealth of opportunities for homeowners, investors, and developers alike, particularly in a time where investing in real estate as a side gig is a growing interest.
After reviewing the set of new laws, here are some of our top takeaways that make a strong case for ADU development.
What are ADUs?
Accessory Dwelling Units are small structures built that share a property but are not part of the main home. They’re typically under 1,000 square feet and contain everything a typical home would have: plumbing, electricity, a small kitchen, bathroom, and living and sleeping areas.
Junior Accessory Dwelling Units, or JADUs, are similar to ADUs but are part of the main home structure rather than a stand-alone building. They’re usually no more than 500 square feet in size and they share the same central HVAC and plumbing systems.
Many people use ADUs and JADUs for grown children or aging parents, but they’re gaining particular scrutiny in California to provide alternative housing solutions.
ASSEMBLY BILL NO. 68
This bill would allow for ADUs and Junior ADUs on the same lot, provided certain access, setback, and other criteria are satisfied. In essence, there could be up to three ADU units on property originally zoned as a single-family lot.
You can review the bill in full here.
ASSEMBLY BILL NO. 881
Assembly Bill 881 defines specific parameters for ADUs, such as setback and size requirements. Here are some of the top takeaways:
Existing structures, such as garages, that are converted into ADUs are not required to provide parking if the ADU is replacing existing parking space.
ADU sizes are no longer contingent based on the size of the primary residence.
Local permitting agencies must act on the request of application for an ADU within 60 days.
Maximum setback for an ADU is four feet; local authorities can no longer enforce large setbacks.
Property owners no longer have to live in the main residence in order to rent out ADUs.
You can review the bill in full here.
ASSEMBLY BILL NO. 670
Many of Southern California’s coastal communities have historically strict covenants and HOAs that have previously made ADU inclusion impossible. Assembly Bill 670 is poised to remove many of these restrictions to allow a smoother path for ADU development. Here are the top takeaways from the bill:
Any covenant restricting ADU development on a single-family lot is now null and void.
HOAs and other neighborhood groups can no longer prevent you from building an ADU on your single-family lot.
You can review the bill in full here.
SENATE BILL NO. 13
Last but not least, Senate Bill 13 adds further clarification of ADU allowances in favor of homeowners:
Agencies are not permitted to impose impact fees on ADUs that are 750 square feet or under.
The person on the application to build an ADU does not have to be an “owner-occupant” of the primary residence or the ADU.
Owners will not have to provide spaces for ADUs that are within one-half mile of public transportation.
You can review the bill in full here.
Our Predictions for the ADU Building Boom
The new set of laws surrounding ADUs lean heavily in favor of homeowners, developers, and real estate investors, offering far fewer hurdles to clear to install an ADU or two on your property. With less involvement and requirements from local authorities, the potential for property owners is seemingly infinite.
This legislation didn’t just appear out of thin air — it’s a change that homeowners in California have been hoping for. And now that they have the green light with fewer speed traps along the way, we anticipate a quasi-housing boom, unlike anything California has ever seen.
Fewer restrictions and relaxed codes will likely encourage homeowners to invest in ADUs to earn side income, increase property values, or even provide an optimal solution for their own family (e.g. aging parents, independent adult kids, etc). It won’t be surprising if investors decide to separate single-family properties into clusters of rental properties to maximize their investment!
At E3 Design, we’re here to help you take advantage of the new legislation and add an ADU to your property. Contact our team today for more information!