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  • Writer's pictureCRAIKER

New State laws to Increase Housing or Neighbor Feuds?

The California State laws governing ADUs and JADUs are changing every year. ADUs, also known as granny flats, in-law units, guest or secondary units, are intended to create more homes to help ease our current housing shortage. Up until last year, the State allowed 1 main residence, 1 ADU accessory dwelling unit as well as 1 JADU, junior accessory dwelling unit, on any legal single family residential lot. A new state & policy” (meaning it’s not official law as of yet) will allow municipalities to administratively approve a building permit application with 1 ADU and 1 JADU and one additional detached newly constructed ADU, under certain circumstances and interpretations. Combining this law with other housing laws such as Senate bill SB9, one lot could yield up to 8 homes. Since little public noticing is required once a complete application is accepted by the local agencies, I see the neighborhood battles emerging on the horizon. Get out the torches, nooses, and pitchforks!

SB 897 came into effect to make it easier and more cost-effective to add ADUs to anyone’s properties. The property must be zoned for single-family residential use with a primary dwelling and a new ADUs can go up to 25 feet or the height of the main house, whichever is lower. Detached ADUs have a limit of 18 feet, which might accommodate two floors or a mezzanine. SB 897 relaxes setback requirements, especially for smaller ADUs. But 4 feet to a property line is really essential.

The bill also removes minimum lot sizes and lot coverage requirements, making ADU feasible on smaller lots.  Replacement parking is no longer mandatory when a garage is converted into an ADU. Additionally, the need for automatic fire sprinklers in ADUs has been modified, further simplifying the process. Always check with your local building and fire departments for specifics.

In addition, the State Housing Department “policy” is allowing communities to allow ADUs in sensitive habitat areas and high-fire hazard severity zoned areas. This also could mean allowing ADUs in hillside areas with narrow and steep roads. I’m less concerned about resident access but fire suppression and construction supplies will be a challenge. Again, check with your local building and fire departments for specifics.

Individual Accessory Dwelling Units are now sellable.

ADUs were originally intended to create more housing opportunities.  Not all ADUs are rented: often property owners use a newly constructed ADU as a pool, office or guest house. Assembly Bill 1033 will now allow ADUs to be separated and sold, which could in effect create two- or more condominiums on a residential lot. The Bill in 2024 will allow a city or county to opt-into a new program in order to allow homeowners to sell their ADUs separately from the main residence.

This will also require the creation of Covenants, Conditions & Restrictions, CC&Rs, to govern the use of any piece of real estate just like a homeowner’s association or maintenance organization for condominiums.

I don’t see this happening widely but a standard set of CC&Rs should be created by the State since any CC&R package would have to be certified by the DOH. I don’t think the lending industry was considered in this. Financing the construction of ADUs is still a challenge for many banks and financing separate condo ADUs on a property is unheard of, if not next to impossible. City governments may embrace the concept, but financing will be the real challenge.

Cities across California are getting creative in adding ADUs. San Diego city has created a “ADU Bonus Program” where an ADU that is built and dedicated to lower- income renters, then the city will allow the owner to build an additional ADU to rent at market rate. In so-called “transit priority areas,” there are technically no limits to the number of bonus ADUs someone can build.

If San Diego opts into AB 1033, thousands of newly eligible housing units could hit the market in the coming years thus creating more low income and first-time buyers to get in the housing market. Through October of 2023, a total of 124 ADUs were permitted as ADU bonuses and allowing the sale of ADUs would be a real game changer.

Are Municipal Impact Fees holding back ADU construction?

One major obstacle to ADU construction is local Municipal Impact Fees, MIFs, for an ADU. Basically, they include not only building permits expenses but additional costs to maintain existing services that haven’t been passed on to all existing residences. Typically, these fees apply to newly constructed condominiums or luxury homes, which is the current market. However, should these be passed on to new ADUs?

Finding the municipal fees requires Sherlock Holmes. The city fee schedule for an ADU under 749 SF is about $2000, depending on the Moon and the Stairs that night. ADUs above 750 SF are around $15,000, if you’re lucky. These are approximate since there is no way to know what the total fees are until an actual application goes through the whole process. Ask 5 city employees and you’ll get 10 different answers.

It’s arguable that individual homeowners building ADUs will help solve Napa’s required State mandate to creating more housing and therefore the city should eliminate or reduce MIFs for ADUs. But that falls on deaf ears.

In the meantime, keep your ADUs under 749SF.

Chris d Craiker AIA/ NCARB notes every city always looks for fees they can pass on to a builder.

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