January 1, 2020, will be a big year for ADUs in California. A series of laws will go into effect that revises and relax the laws governing ADUs. The new laws are intended to help address the housing shortage in California and make ADU development easier. For developers, investors, and homeowners these laws will open up a range of investment possibilities, and increase the potential to earn supplemental re-occurring income.
The four laws that have the most impact on ADU development are Assembly Bill (AB 881), Assembly Bill (AB 670), Senate Bill 13 (SB 13), and Assembly Bill 68 (AB 68). After studying each of these laws, we’ve extracted the key points to help summarize the new regulations. Below are our takeaways from each of the laws:
Assembly Bill No. 881, Bloom
The maximum setback for an ADU would be 4’-0”. Local authorities can no longer enforce large setbacks on ADUs.
If an ADU is created in an existing structure i.e. a garage of the same size, the local agency cannot require replacement parking to be provided if the ADU replaces the parking spaces. For example, if you build an ADU in an existing two-car garage, the two parking spaces do not need to be put somewhere else on the lot.
There is no maximum or minimum size for an ADU based on the percentage of the primary residence. In the past, local jurisdictions could limit the size of an ADU based on the percentage of the primary residents.
The local permitting agency must act on the submittal of an application for an ADU within 60 days on a ministerial CEQA-exempt basis. (Previously it was 120) Local authorities cannot impose owner-occupancy requirements on the construction of ADUs. In other words, the owner of the property does not have to live in the primary residence or the ADU on the lot. These can both be rental units and the owner of the property can live elsewhere.
Clarifies “public transit” to mean both bus stops and bus routes within a half-mile walking distance from the ADU.
Assembly Bill No. 670, Friedman
Any deed or covenant prohibiting ADUs is void and unenforceable on a single-family lot. An HOA, CC and R, or neighborhood group cannot prevent you from building an ADU on a single-family lot.
This bill is going to have a big impact on many of the coastal communities of Southern California. Most of these communities have strict HOAs or CC and Rs that restrict ADUs. Bill 670 will make these unenforceable.
Senate Bill No. 13, Wieckowski
Agencies cannot impose impact fees on ADUs under 750 SQFT.
The applicant on the application to build the ADU does not have to be an “owner-applicant” of either the primary residence or the ADU.
Assembly Bill No. 68, Ting
This law allows for ADUs as well as Junior ADUs on lots where certain access, setback, and other criteria are met. This means that there could be up to three units on a single property.
What will result from these new laws? We would expect more homeowners and investors to build ADUs on their properties. The reduced friction in the permitting process and relaxed code requirements mean the increased potential to earn supplemental income, increase your property value and explore new investment strategies. Don’t be surprised if you see investors and developers separating their properties into three rentals (Primary Residence, ADU, and Junior ADU) and collecting income on each of them individually.
If you are interested in exploring how you can add an ADU or convert your garage to an ADU, contact me and let me help you understand the value it will instantly add to your home or multi-unit.