I first started covering ADU’s in 2018 at our Meetup after a new state legislation in 2017. Recently a series of new bills were signed into law to further lower the hurdles to create ADU’s. I don’t imagine every house is going to take advantage of this. Most people will still prefer to have a backyard. I have heard anecdotally ADU is projected to have only about 2 – 3 percent penetration in California.
This is a statewide bill and every city has to comply by Jan 1, 2020. If the local ordinance is not created by then it will default to the state law. Instead of reading the boring ol’ bill yourself, I summarized them here for you in plain English what they mean in the order of impact I think they’ll make:
Every House Can Now Be a Triplex (AB 68 & AB 881)
Single family zoned properties are now allowed one Junior Accessory Dwelling Unit (JADU) along with one full ADU. A JADU is a part of the main house, such as a spare bedroom or attached garage, converted into a living quarter that is less than 500 sqft. If you are looking to house hack or say multi-generations staying together this provides a lot of flexibility.
Multifamily Can Join the Fun, Too (AB 68 & AB 881)
Why should SFH’s have all the fun. Up to 25% of the main structure for multifamily properties with extra space such as garages, carports, laundry rooms, mechanical rooms, storage rooms, attics/basements can now be converted into living spaces. Separately, you can also build up to two ground-up detached ADU’s if you have extra land left over to comply with the 16′ height and 4′ rear and side yard setback.
For example, if you have a duplex this mean you could potentially turn this into 5 units: 2 existing, 1 attached, and 2 detached. That’s pretty amazing!
Get Your Approvals Quicker (AB 68 & AB 881)
Instead of the previous 120 days, cities must provide ministerial approval within 60 days. Ministerial means staff review, no public hearing is required. As someone who’s spent years in getting entitlements and all the bureaucratic hell that comes with it for other bigger projects this is like an angel sent from heaven above.
Parking Reductions (AB 68 & AB 881)
It used to be you have to provide one parking space per unit or bedroom, whichever is greater with some exemptions. With the new bill ADU’s are not required to have parking if they are created within an existing space or accessory structure like JADU and garage conversion. You also are not required to provide replacement parking for the main residence when the garage is demolished or converted to an ADU as long as you match the previous footprint. This is especially helpful in cases where it’s more costly to repair the old structure than to replace it.
Note: If you are building a brand new ground-up detached ADU you will still have to follow the parking requirements unless you’re within 1/2 mile from public transit, within a historic district, or one block from car sharing.
Baby Got (Set)backs Reduction (AB 68 & AB 881)
Rear and side setback requirements have been reduced to only 4′.
Other Restrictions Eliminated (AB 68 & AB 881)
No more minimum lot size and lot coverage restrictions. As long as the detached ADU is no more than 800 sqft and 16′ tall you should be good to go.
Governor Newsom signs Assembly Bill 68
HOA Can’t Touch This (AB 670)
Home Owner Associations and CC&R’s can no longer prohibit the development of an ADU or JADU
No Need to Be Owner Occupied (SB 13)
Previously many cities will allow permit ADU’s if the primary dwelling is owner occupied. SB 13 put a five year moratorium on this to incentivize investors to create more housing supply. I foresee most cities will tack on short term rental rules on this to only allow 30+ day rentals.
Unpermitted ADU Amnesty (SB 13)
Instead of telling you to demo the unpermitted work cities will allow you to bring it up to code within 5 years.
No Impact Fees (SB 13)
No impact fees for ADU’s under 750 sqft. For ADU’s bigger than 750 sqft the fees shall be proportional to the size of the primary dwelling.
Can be Sold Separately (AB 587)
If desired, the new ADU can be sold off separately from the main house now. This is totally new and it will be interesting to see what kind of market is there for something like this since there is zero comparable sales. Likely you will have to do this through a tenancy-in-common (TIC) or maybe overlay the parcel with a condo map. Most of the people I talk to about ADU this is not their primary motivation so I put this last. Not to say it won’t be though.
ADU is a no brainer right now. It is a lifestyle choice right now for homeowners. There are still some hurdles on the financing and appraisal side. Not too many lenders are willing to lend on this because they are not sure what the appraised value will bee with the lack of comparables. Property owners will have to either get a construction loan or do a HELOC or refinance on your main house. If you don’t have the equity it will be challenging.
Still got the ADU blues and don’t know what to do? Contact me today and I’ll take a look for you or put you in touch with a trusted architect I have worked with in both NorCal and SoCal.
