grannyunit

California’s rollout of accessory dwelling units (ADUs) continues to evolve, with significant regulatory changes taking effect this year, marking a pivotal moment in the state’s response to the housing crisis. The program has experienced both remarkable progress and notable setbacks as policymakers work to streamline ADU development across the Golden State.

The most significant development is the permanent elimination of owner-occupancy requirements. After 2025, the owner-occupancy requirement for ADUs will be permanently removed, allowing property investors and landlords to build ADUs without living on-site. This change, implemented through AB 976, represents a fundamental shift that could dramatically increase ADU construction by opening opportunities for investment properties and rental portfolios.

Another significant advancement is AB 1033, which allows California cities and counties to adopt ordinances permitting homeowners to sell accessory dwelling units (ADUs) separately from the primary residence, treating them like condominiums. This condominium-style ownership model could create new pathways to affordable homeownership, though implementation remains optional at the local level.

However, financial support has faced challenges. As of January 2024, the $ 40,000 ADU Grant is no longer available, as high demand quickly exhausted the funding pool. While additional funding was approved in late 2023, the program’s future remains uncertain.

A critical development is AB 1332, which requires all California cities and municipalities to implement pre-approved Accessory Dwelling Unit (ADU) plan programs by January 1, 2025. These plans will be accessible on city websites, enabling homeowners and property developers to browse and select a plan that suits their needs quickly. The pre-approved plans system represents a fundamental shift from traditional case-by-case reviews to standardized, streamlined approval processes.

Under AB 1332, projects utilizing these plans will see their review time reduced to just 30 days, dramatically cutting the typical month-long approval timeline. Cities must either create online databases of pre-approved plans or provide PDFs of approved designs that meet local building codes and zoning requirements. This system eliminates the need for extensive plan reviews on previously vetted designs, removing a significant bottleneck in ADU development.

When to Seek Legal Consultation

Given the complexity and rapid evolution of ADU regulations, legal consultation is recommended in several key scenarios. Property owners should consider consulting an attorney when navigating local zoning restrictions that may conflict with state law, as municipalities sometimes maintain ordinances that haven’t been updated to reflect recent legislative changes. Legal advice becomes particularly valuable when dealing with HOA restrictions, covenant issues, or properties with existing deed restrictions that may limit ADU development.

Those considering the new condominium conversion options under AB 1033 should seek legal guidance to understand subdivision requirements, title complications, and potential financing implications. Additionally, rental property investors seeking to capitalize on the elimination of owner-occupancy requirements may benefit from consulting a lawyer regarding landlord-tenant law, local rent control ordinances, and property management compliance.

The current state reflects California’s ambitious but complex approach to addressing housing shortages through ADU expansion. While regulatory streamlining continues, funding challenges and local implementation variations remain significant hurdles in achieving widespread adoption of ADUs across the state.

Since it has been several months since I last wrote in this blog about my own ADU project, it seemed that people might be curious to know where things stand.  Also, reflecting general increased interest and activity in this type of housing stock, I have been seeing more ADU matters in my own law practice.  Given these developments, I thought it was time to revisit this topic.

When Lisa and I first began talking about the idea of an ADU, we sought a general idea of the cost from a general contractor who works with another professional we know, and it was clear that a “stick-built” ADU would be significantly more expensive than a Villa prefab unit.  As we proceed with planning for our home remodel project to follow after we complete our ADU, we continue to see support for that conclusion.

At present, Villa is seeking to resolve certain minor comments that the City of Los Altos made to the ADU plans they submitted in late June in order to obtain final approval.  We expect that will occur within the next few weeks.  At that point, we expect that the construction of our ADU at the factory and installation on our property will take approximately four to six months.

We might even be further along, however, had we gotten our own survey of our property before starting, as we spent more time than expected on the choice and location of our ADU model due to where I thought our property lines extended.  We made a preliminary decision on the model and placement of our ADU based on where I believed the lot lines of our corner parcel to be, but we learned from the survey Villa commissioned for our project that the actual lot lines were about 8’ further in from each street.  Since that meant that our ADU would be closer than we expected to the main house, we spent time reconsidering the model and intended placement of our ADU.  Had we gotten a survey first, we would have learned this fact sooner and might have made a quicker decision about the selection and placement of our ADU.

Be that as it may, we are still excited about this project and looking forward to being able to move forward with our ADU.  We also count ourselves as fortunate, because we find ourselves in a better situation than one that I encountered in my law practice recently.  In spite of California’s demonstrated need for housing and the state’s legislative efforts to promote housing construction, there remains substantial resistance to the state’s encouragement of such development (including ADUs) in some circles.

We’ve all heard stories about cities declaring themselves mountain lion habitats as they try to exclude themselves from these laws, and maybe even laughed about their absurdity.  Truth be told, however, this intransigence imposes real harm on real people seeking to pursue housing development projects, thus forcing them to take legal action.  I have previously noted in this blog how local jurisdictions have been severely punished for improperly placing obstacles in the way of housing development, and it seems this impulse continues unabated.

Recently, a client asked for my assistance in pursuing the approval of an ADU on his property in an unincorporated woodland area within the Coastal Zone here in the Bay Area.  Despite the fact that the property’s woodland zoning allowed residential use, and that the client had previously built an approved primary residence on the property, the local authority refused to allow an ADU on the property based on its restrictive Coastal Zone ADU ordinance, which allows ADUs only in areas zoned R1, R2 or R3, even if residential use is otherwise allowed, as with this property.  Unless my client wants to bring a lawsuit against that jurisdiction challenging its overrestrictive ordinance, however, he will be unable to add an ADU to his property, despite the broad language of state law allowing ADUs to be built wherever zoning allows residential use (not just R1, R2 or R3 zones).

As the state keeps trying to get more housing built in California, local governments keep pushing back against its efforts, and it is unclear to me whether the state’s current actions can overcome their opposition.  Even in the ADU arena, which ought to be relatively smooth sailing, getting past those barriers continues to be challenging.  While it may be a tough slog, however, it is important to keep up the efforts, as the rewards are substantial and the consequences of failure are stark.

Accessory dwelling units (“ADUs”) have become simpler to build and more popular in California as a result of legislative changes at the state level.  The intent of these changes has been to clarify those laws, as well as to remove red tape and regulatory barriers at the local level.  In particular, California laws passed in recent years have changed the rights and obligations of ADU builders with respect to parking.

For many years, until 2020, a number of cities put onerous parking requirements on new ADUs. This changed in January 2020.

First, a city can only require one parking space per ADU or per bedroom, whichever is less. The parking spaces may be tandem (one space in front of the other) on a driveway.

Second, if you are converting a garage or carport or other covered parking structure to an ADU (or demolishing it as part of an ADU installation), you do not have to replace that parking.

Third, a city cannot require you to add or change the parking on your property if any of the following apply:

• The ADU is within a half mile of public transportation.
• The ADU is in a district that has been deemed architecturally and historically significant.
• The ADU is part of the primary home or an accessory structure to the primary home.
• On-street parking permits are required but not issued to ADU occupants.

The California department of Housing and Community Development has issued a summary memo about these and other changes to California law concerning ADUs. You can view it here.

California law governing ADUs has been revised pursuant to two new “clean up measures”, SB 897 and AB 2221, which went into effect January 1, 2023. These new laws clarify and correct several different unforeseen barriers to the approval and construction of ADUs that had surfaced after the adoption of previous ADU legislation by the state.  These revisions will require local authorities to review and update their local ADU ordinances in order to conform to state law.

One important change provided under these new laws is the requirement that local standards imposed on ADUs be objective, in order to eliminate barriers that had arisen to the construction of ADUs.  The new law defines an “objective standard” as a standard that involves no personal or subjective judgment by a public official and that is uniformly verifiable.  In addition, these new laws allow detached ADUs to be constructed in a detached garage, and exempt ADUs from triggering fire sprinkler requirements in existing primary dwellings due to total increased dwelling square footage on the property.

Further, local agencies can no longer deny ADU applications based on existing nonconforming zoning conditions, building code violations, or other unpermitted structures located on the property that do not threaten public health and safety.  Minimum height limits have also been revised, and front setback requirements can no longer be used to prevent ADU construction.  Parking standards can no longer be imposed on ADUs included in applications to create new single-family or multifamily dwellings, and local agencies cannot require modifications to existing multifamily dwellings with setbacks of less than four feet.  Finally, local authorities are required to issue demolition permits to replace detached garages with ADUs, and they cannot deny building permits for unpermitted ADUs constructed before January 1, 2018, unless they are deemed substandard under California housing law.

These changes are expected to reduce the cost of some ADU projects, expedite their permitting, and generally make such projects more commercially viable. For example, these new regulations can change the sequence of construction of multiple new buildings on the same lot. Before these changes went into effect, builders who wished to build both a multifamily structure and an ADU on the same lot had to build them in series, adding cost and time to both projects. Now, if practical, both buildings can be planned, built and go on the market at the same time. It is expected that this will result in more affordable housing and more housing availability.

We will have to wait and see whether these new measures, together with those existing laws on the books, will continue to remove roadblocks to ADU construction in California.  The text of SB 897 can be found here, and the text of AB 2221 can be found here.