There are many Benefits to an ADU . The State of California have approved building ADU’s as part of their solution to help improve the housing shortage we have been experiencing for the last 10 years in the state. The price of rent has gone up as the housing shortage has increased. So with the approval of ADU’s in the state, The state hopes the housing shortage will decrease and rents may even out . With the addition of ADU's this will make our properties more valuable as they can earn additional rental income legally. For your kids or parents who need a place to rent you can now build a place that they can live in that will enable the family to be together and at the same time increase the value of your property. If you are retired and need some extra income an ADU can bring in an additional $1500 to $3,000 per month of rental income that will help defray the cost of your mortgage or supplement your cost of living. If you are an investor there is plenty of opportunity for additional income to your investment property by converting the existing garage to a junior ADU and adding an additional detached ADU to the property which could realistically convert it to a investment property that would be earning an equivalent of a triplex in rental income. There are many benefits to building an ADU on your property besides the income , the property value should increase by the additional income and square footage added to the the property . For cities additional housing will be added without having to add to additional infrastructure. Surrounding business will benefit with the additional population of the area .
Governor Newson signed into law a number of Bills that will make it easier to build ADU’s for most people .
AB-881, “Accessory dwelling units,” and AB-68, “Land use: accessory dwelling units,” will arguably have the most significant impact on the state’s housing market. These two bills will make California ADUs much simpler to build because it makes many of the current restrictions that cities place on ADUs obsolete. It also provides for a streamlined process for approvals.
These bills require permits for ADUs added to single-family and multi-family homes to be approved or denied faster. Current law permits these decisions to take 120 days, but this new law requires decisions within 60 days. These approvals or denials must be issued ministerially, so that way, there are fewer potential issues to encounter. Cities and counties may establish minimum and maximum ADU size requirements, but the maximum size cannot be less than 850 square feet for a one-bedroom ADU or 1,000 square feet for more than one bedroom.
Most importantly, these bills prohibit any lot coverage, minimum lot size, etc. requirements that municipalities have. Cities have enacted these laws to have the effect of making it impossible to build an ADU. Cities cannot require the correction of nonconforming zoning conditions as part of the approval process.
To summarize, municipalities won’t have the ability to block the construction of ADU places like they used to. These bills will make it significantly easier to build an ADU, no matter how your lot and home are situated.
SB-13, “Accessory dwelling units,” is similar to AB-881 and AB-68 with a couple of significant differences. Before this bill, local agencies could require that the person applying for the ADU occupy either the primary residence or the proposed new structure. This bill exempts from these requirements all proposed ADUs until Jan. 1, 2025. Additionally, this bill removes the impact fee for ADUs smaller than 750 square feet. Even for ADUs larger than that, the impact fees assessed must correlate with the square footage of the primary residence.
SB-13 makes building ADUs cheaper and also removes an essential regulation. Now, landlords who rent their properties out can apply for an ADU for their rental properties.
AB-670, “Common interest developments: accessory dwelling units,” makes it easier for people within HOA complexes to construct ADUs. Specifically, it prevents banning or unreasonably restricting on single-family lots on the construction of these units. Presently, many HOAs have CCRs (“conditions, covenants and restrictions”) that prevent people from building ADUs. HOAs may worry about the uniformity of the properties if one has an ADU on it, or they might be concerned that they don’t know who is and who isn’t renting from an ADU. Regardless, HOAs now need to have a way for people to construct ADUs if they so choose.
HOAs will likely challenge this bill, at least to some degree, in court, but for now, if you live in an HOA complex with single-family homes, you can construct an ADU.
AB-671, “Accessory dwelling units: incentives,” requires that general plans incentivize homeowners in some way to construct these ADUs and make them available for low-to-moderate-income households to rent. While it doesn’t specify what these incentives will be, it does require local agencies to think about financial incentives and construct a plan.
With the signing of these five bills, it’s pretty clear what Governor Newsom is trying to do. He’s encouraging homeowners in some of the most problematic areas of the state for housing (i.e., the Bay Area and Southern California) to build ADUs now that so much of the red tape no longer exists. The incentive plans the state will create will generate an interest in ADUs and prompt homeowners to rent them to the people who need them most — those in the lower or moderate-income brackets.
Whether this plan works remains to be seen. However, what is clear is that if you wanted to build one of these ADUs — no matter what the reason is — now is the time to do it!