How Will California’s New A.D.U. Laws Affect You in 2020?

With the purchase and ownership of real estate comes an inherent risk. These involve weather-related incidents, crime statistics, fluctuations in the local and national economy and in some cases, the passing of new laws. Such is the case concerning Accessory Dwelling Units or ADU’s in California, and it could be a very good thing for California investors and those with large lots.

The main reason for the passing of these bills stems from the need to help address California’s housing shortage issue and therefore, several laws have been passed that address the status of current and existing ADU’s. The current laws that took effect January 1st, 2020 look to ease up on the regulations that had been in place for years and will likely see a boon in construction and development as those with extra land look to build additional units and profit from these new changes.

Of the 4 bills that were passed, Assembly Bill (AB 881), Assembly Bill (AB 670), Senate Bill 13 (SB 13), and Assembly Bill 68 (AB 68), here are some of the most significant points that will have huge impacts regarding California lot owners and ADU’s:

• Setback limitation decreased – In the past, restrictions on ADU’s included that large setbacks from the lot property line must be met that made the construction of many ADU’s impossible. New setback distances are set at just 4 feet, greatly increasing the possibility for may lot owners to construct one or multiple ADU’s.

• No need for replacement of parking spaces in some situations – Past laws stated that if an ADU was created in an existing space (for instance a garage) then additional parking spaces must be created. This is no longer the case and now, the parking spaces that exist on the lot will be deemed sufficient. This will be a welcome law for those whose lots are too small to accommodate additional parking. 

• No need for ADU’s size to be relegated to the size of the existing residence – Past laws restricted the size of an ADU based on the size of the existing residence on the lot. This rule has been done away with and as of now, if all other requirements of the new laws are met, the newly constructed ADU size will not be restricted based on the size of the existing residence. 

• Permits filed for ADU’s must be acted on by the relevant agency much more quickly – In an effort to speed construction of new ADU’s, the time the local permit agency must act on a newly filed ADU permit will be 60 days. In the past, this time limit was 120 days. 

• The owner of the ADU does not have to reside on the property – Another exciting aspect of these new ADU laws is the striking down of the RESIDENT OWNER statute. This rule said that in order to have an ADU on a lot, the owner must reside on that lot as well. This means that an investor who has a large lot could move away, make their existing residence an ADU AND construct additional units as well (size permitting of course.) In addition, investors can choose to purchase large lots solely for the purpose of constructing multiple ADU’s. This is an exciting development and this rule combined with the shortened permit times will likely see a boon in construction in many areas. 

• Past ADU restricting covenants are considered null and void pertaining to single-family lots – As part of these new laws, all past ADU restrictions pertaining to single-family lots are now considered null and void. While they must be reapproved based on the new laws, because of the multitude of restrictions that have been removed, this will result in many once “dead” ADU permits being approved. As part of this law, HOA’s and neighborhood groups will have no power to refuse your ability to construct an ADU on a single-family lot. 

•  Up to 3 ADU’s will be allowed on a single lot – The The bottom line here is, investors can now construct up to 3 ADU’s on a single lot, including the existing residence. This law will likely result in some serious construction as well as investors seek to maximize property value and rental income by “maxing out” the number of ADU’s they can have on any existing property. 

The passing of these laws is exciting for many investors but will certainly come with some strife as local HOA’s and neighborhood organizations will likely try to push back. The laws are very clear, however, and the flexibility they afford will likely result in a tremendous number of ADU’s added to the California housing marketing in 2020. Those with large lots or who look to purchase them will have the best opportunity to increase income and maximize property value utilizing these new ADU laws.