Why Should You Build an Accessory Dwelling Unit?
The future of Silicon Valley‘s economy depends partially on giving people more options for living near their workplaces at an affordable price. ADUs AKA granny flats, in-law apartments, casitas might be one of the solutions toward closing the housing gap in our area for a simple reason: ADUs are smaller and more affordable than traditional housing options and would help low- and moderate-income renters weather the skyrocketing housing costs.
The benefits for both homeowners and renters are easy to see: renters are searching for relief from high housing costs and ADUs can be an excellent investment for homeowners. It’s a win-win situation requiring minimal compromise.
1. Why Investing in an ADU?
An accessory dwelling unit (ADU) is a secondary housing unit on a single family residential lot. It can be attached to the primary house like a converted garage, or unattached like a freestanding cottage. Homeowners can create ADUs from new or existing structures.
1. ADUs offer a stable rental income for homeowners who choose to rent their unit. Homeowners looking to build or repurpose a structure in their backyard, garage, home or basement will have little trouble finding competitive renters.
2. Homeowners will also find that adding an ADU is oftentimes an affordable investment. For instance, repurposing an existing structure like a garage or basement is cheaper than buying an investment property since most homeowners already own the land on which they might build or repurpose their ADU, they won’t have to clear this extra financial hurdle.
3. One study found that ADUs contributed between 25% and 34% of each property’s assessed value, according to the Appraisal Journal (https://bit.ly/1H1bSHc). Nevertheless, bear in mind that this figure may vary depending on where the ADU is located. Therefore, only a local real estate agent may be able to help you evaluate the added value to a home when building an ADU.
2. How Difficult Is It To Create An ADU?
Since 2016, we saw a real shift regarding the legislation pertaining to the construction of AUDs. California lawmakers now recognize ADUs’ potential to help alleviate the state’s housing crunch. Below is a recap of the key recently enacted, ADU-friendly laws include:
Senate Bill 1069, which prohibits parking requirements if the ADU is within a half mile from public transit;
Assembly Bill 2406, which authorizes local governments to allow for the construction of junior accessory dwelling units of no more than 500 square feet and fully contained within an SFR. It also prohibits local agencies from requiring additional parking requirements for junior ADUs, treating these tiny units as part of the same SFR unit when it comes to installing water, sewer and power so a separate connection fee cannot be required for the junior ADU.
Assembly Bill 2299, which loosens regulations around all types of ADU. The new law:
a/ Limits parking requirements for all types of attached or unattached ADUs to one parking space per unit or bedroom and provides maximum standards a local government is authorized to issue on ADUs (for example, an ADU may be built on the property even if it is zoned for SFR use only);
b/ Removes the setback requirement for ADUs built inside an existing garage;
c/ Limits the setback requirement to no more than five feet from the side and rear of the lot for an ADU built over a garage.
As the result of these "pro" ADUSs legislation, in the city of San Jose, for instance, ADUs are permitted where most single-family homes exist, if it meets the standards outlined in the Municipal Code and as applicable in planned development (PD) districts. More specifically, ADUs are allowed in residential R-1, R-2, and R-M zones, and in PD zones as allowed by the covenants of the PD zone.
Feel free to contact me to get your free handout of the city of San Jose ADUs, requirements and/ or any other city in Santa Clara County.
3. Overview of California Accessory Dwelling Unit (ADU) Law as
of January 1, 2020
Reduced Costs and Burdens for Developing ADUs
ADU applications must be approved within 60 days, without a
hearing or discretionary review;
For ADUs permitted by 2025, cities/counties cannot require
the owner to live at the property;
No impact fees are required for ADUs under 750sqft;
proportional fees apply to larger ADUs;
An ADU can be developed at the same time as a primary
dwelling, under most of the same rules;
A city/county must delay code enforcement on an unpermitted
ADU to allow it to be legalized;
Single-family HOAs must allow development of ADUs, subject
to reasonable standards;
Single-family homeowners can also develop JADUs—units under
500sqft within a residence.
ADUs Subject to Automatic Approval — No Local Limits
Cities/counties must permit certain categories of ADUs
without applying any local development standards, if proposed on a
single-family lot. ADUs eligible for this automatic approval include:
An ADU or JADU converted from existing space in the home or
another structure (e.g., a garage), so long as the ADU has exterior access and setbacks sufficient
for fire safety
A new detached ADU under 800sqft in size, 16 feet in
height, with 4-foot side/rear setbacks;
Both of the above options in combination, creating one
internal JADU and one detached ADU.
ADUs Subject to Ministerial Approval — Minimal Local
Cities/counties must generally approve an attached or
detached ADU under 1,200sqft unless it adopts local development standards. Local standards have the
No minimum lot size requirement;
No maximum unit size limit less than 1,000sqft for a
No required replacement parking when a parking garage is
converted into an ADU;
No required parking for an ADU created through the
conversion of existing space or located within a half mile walking distance of
a bus stop or other public transit;
No height limit under 16 feet or side/rear setbacks
requirements over 4 feet;
No setbacks requirements for conversions/replacements of
existing legal structures;
Design standards must be objective and are assessed by
staff, not elected officials;
Floor area ration (FAR) and similar restrictions must be
relaxed to allow development of an 800sqft ADU.
Adding Units to Multi-family Properties
The following types of residential units can be added to
multi-family buildings, with no local limits:
New units within the existing non-living space of a building
(storage rooms, basements, garages, etc.), with one new internal unit allowed for every four
Two new detached homes, with 4-foot side/rear setbacks, up
to 16 feet in height.
Association of REALTORS - Created in partnership with Californians for
4. AB 345 effective January 1, 2022
This bill requires each local agency to allow an accessory
dwelling unit to be sold or conveyed separately from the primary residence to a
qualified buyer if certain conditions are met.
5. Changes in the statewide accessory dwelling unit (“ADU”) legislation starting January 1st, 2023
The SB-897 and AB-2221 bills, make substantial revisions to state law and are likely to require local jurisdictions to review and readopt any local ordinances related to Accessory Dwelling Units (“ADUs”). The laws went into effect on January 1, 2023, and will collectively impose the following changes to the statewide ADU law:
1. That ADU ordinances can only impose objective standards on accessory dwelling units which can include, but are not limited to, parking, height, setback, landscape, architectural review, the maximum size of a unit, and any other standards that prevent adverse impacts on any real property that is listed in the California Register of Historical Resources. Such standards must be “standards that involve no personal or subjective judgment by a public official and are uniformly verifiable by reference to an external and uniform benchmark or criterion available and knowable by both the development applicant or proponent and the public official prior to submittal.”
2. An ADU that is detached from the proposed or existing primary dwelling unit may be constructed in a detached garage.
3. The construction of an ADU shall not constitute a Group R occupancy change under the local building code absent express written findings by the building official that the construction of the unit could have a specific, adverse impact on public health and safety. However, a public agency can still find a change in occupancy, for purposes of applying building code requirements, if the space was previously un-habitable or was only permitted for non-residential use and was converted.
For the record, The Group R residential occupancy applies to anyone that owns a single-family home, apartment, or motel. There are many sub-divisions of the Group R residential occupancy.
- In the R-1 subcategory, boarding houses, hotels, motels, and similar businesses qualify.
- In the R-2 subcategory, apartment buildings, dormitories, and multi-user residences qualify.
- The R-2.1 section is for multi-tenant healthcare and residential facilities.
- The Group R-4 [Residential] subcategory is for halfway houses and rehabilitation centers.
4. The construction of an ADU will not trigger requirements to add fire sprinklers in any existing primary dwelling.
5. Any denial of a junior ADU or ADU application requires the provision of a full set of comments to the applicant with a list of items that are defective or deficient and a description of how the application can be remedied by the applicant within the 60-day time-frame to act on a permit application.
6. A local jurisdiction must require a demolition permit to replace a detached garage with an ADU, and must issue the permit concurrently with the building permit for the ADU. An applicant cannot be required to provide written notice or post a placard for such demolitions unless they are in a historic district.
7. Revised minimum height limits, that must allow the following heights for ADUs:18 feet for a detached ADU on a lot within one-half mile walking distance of a major transit stop or high-quality transit corridor, with an allowance of an additional two feet to accommodate a roof pitch aligned with the primary dwelling unit.
8. 18 feet for a detached ADU on a lot with an existing or proposed multi-family, multi-story dwelling. 25 feet or the height limit under the local zoning ordinance, for an ADU, attached to a primary dwelling, although a local agency can ensure the ADU does not exceed two stories.
9. Front setback requirements cannot be used to prohibit the construction of an ADU, where there is no other alternative to allow for the construction of an 800-square-foot ADU that meets height limits and complies with four-foot side and rear setbacks.
10. Local agencies are prohibited from imposing any parking standards on an accessory dwelling unit that is included in an application to create a new single-family dwelling unit or a new multifamily dwelling on the same lot, provided that the ADU meets other specified requirements. Local agencies cannot require the modification of existing multi-family dwellings with side or rear setbacks of less than four feet as a condition of approving ADUs.
11. Local agencies are expressly prohibited from denying an application to create an accessory dwelling unit due to the correction of nonconforming zoning conditions, building code violations, or unpermitted structures that do not present a threat to public health and safety and are not affected by the construction of the accessory dwelling unit. This includes corrections to the primary dwelling unit unless the correction is necessary to protect health and safety.
12. Local agencies are prohibited from denying building permits for an unpermitted ADU constructed before January 1, 2018, due to violations of building standards or non-compliance with ADU laws, unless the agency finds that correction of a violation is specifically necessary to protect the health and safety of the occupants or public. However, this protection does not apply to buildings deemed substandard under the State Housing Law.
If you have any questions pertaining to the ADUs' state and local laws, ordinances, rules, and regulations in your neighborhood, contact your local Building and Safety Department. Also, bear in mind that any local ordinance will be null and void if it does not conform to AB 2221’s and SB 897’s changes to state ADU law.