Why you shouldn't build a Jr. ADU in California

General Landlording & Rental Properties
6yFollow

Why you shouldn't build a Jr. ADU in California

Benjamin Lenz
Realtor · Walnut Creek, CA · Member since 2017 · 39 posts · 18 votes

For those of you who live in California, you may think you can "Triplex" your home by tacking on an ADU and Jr. ADU to your existing dwelling. From what I've gathered (at least in my city), the truth is that you CAN do this, but the question is do you really want to?

To give you a quick rundown on my situation, I bought a house in July 2019 in Walnut Creek, CA. The home as an existing, permitted ADU above the garage which my fiance and I live in. It has a separate entrance and we rent out the 2/1 house. The garage/ADU combo was added on as an attached structure in 2014 and I figured why not sneak in a 3rd unit!? We can just triplex it and it will be all good right!? WRONG!

The conversation I'm not hearing when we're talking about ADUs is that Jr. ADUs have one major flaw that you just can't ignore, and that's the owner occupancy provision it has tied to it. Yes, if you want to build that 3rd unit and provide additional housing to a desperately unaffordable state (California) that severely lacks housing, you literally have to leave it vacant if you move out and keep your house as a rental because the laws state you have to live in one of the units in order to rent the Jr. ADU out. Alternatively you could live in the Jr. ADU to rent out the other two units. I didn't figure this out until I dug deep with our planning department while doing my due diligence before starting my venture. In addition to this seemingly pointless law, the Jr. ADU has to have a door leading to the interior main dwelling, effectively making the unit extremely less private and less insulated.

It's very interesting that our laws which now encourage ADU production as a means of supplying our communities with more affordable units include these provisions that discourage and dissuade investors from taking on this kind of Jr. ADU project that would provide just that. Unless your planning on doing to this in your forever home, it seems like a very risky play.

So yes, you CAN legally "Triplex" your house with three permitted units, but if you plan on building a Jr. ADU you better take these things into consideration. If you live in California and have found your experience to be similar or different from mine I would love to hear it! Best to you and please, proceed with caution...

6Reply
266 views

Most Popular Reply

Whitney Hill
Contractor · San Diego, CA · Member since 2016 · 88 posts · 100 votes
6y

Small note on the JADU requirements... the interior access requirement was recently dropped. Page 2 summary mentions this change, full info here:  https://hcd.ca.gov/community-development/housing-element/docs/ADU_TA_Memo_Final_01-10-20.pdf

8Reply
See this reply in the discussion

59 Replies

Jump to latestLatest
  • Dan H.Pro Member
    Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
    6y

    You are correct that the state allows a jurisdiction to mandate owner occupancy.  

    However, The ADUs also initially had this same limitation.   The removal of the owner occupancy for AFUs is a fairly recent regulation.  I would not be surprised if the owner occupancy requirement associated with JADUs is removed in the not so distant future (but I would prefer if it was not).  

    4Reply
  • Benjamin Lenz
    OP
    Realtor · Walnut Creek, CA · Member since 2017 · 39 posts · 18 votes
    6y
    Originally posted by @Dan H.:

    You are correct that the state allows a jurisdiction to mandate owner occupancy.  

    However, The ADUs also initially had this same limitation.   The removal of the owner occupancy for AFUs is a fairly recent regulation.  I would not be surprised if the owner occupancy requirement associated with JADUs is removed in the not so distant future (but I would prefer if it was not).  

    Thanks Dan for your response! Just curious, why would you prefer it wasn't? Potentially more neighbors? 

    0Reply
    • Allyn Polancic
      Architect · Los Angeles · Member since 2020 · 1 post · 0 votes
      5y
      Originally posted by @Benjamin Lenz:
      Originally posted by @Dan H.:

      You are correct that the state allows a jurisdiction to mandate owner occupancy.  

      However, The ADUs also initially had this same limitation.   The removal of the owner occupancy for AFUs is a fairly recent regulation.  I would not be surprised if the owner occupancy requirement associated with JADUs is removed in the not so distant future (but I would prefer if it was not).  

      Thanks Dan for your response! Just curious, why would you prefer it wasn't? Potentially more neighbors? 

      I'm an investor and I'd still prefer the JADU owner occupancy requirement not be removed because JADUs by design don't need to be independent living units. They are allowed to not include 'complete' bathrooms or kitchens, instead sharing those with the main house.

      0Reply
  • Dan H.Pro Member
    Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
    6y
    Originally posted by @Benjamin Lenz:
    Originally posted by @Dan H.:

    You are correct that the state allows a jurisdiction to mandate owner occupancy.  

    However, The ADUs also initially had this same limitation.   The removal of the owner occupancy for AFUs is a fairly recent regulation.  I would not be surprised if the owner occupancy requirement associated with JADUs is removed in the not so distant future (but I would prefer if it was not).  

    Thanks Dan for your response! Just curious, why would you prefer it wasn't? Potentially more neighbors? 

    As an investor, I like opportunity presented by ADUs.  

    My mom loved the city life.   She grew up in Berlin.   My dad is in a very low density area.   His lot is 8 acres but backs up to the Cleveland National Forest so he in effect has hundreds/thousands of acres.  I fall in the middle ground and have a lot just over 1 acre.  it would be nice if there was a place for each of us.

    As a citizen and person who prefers to live in a fairly low density area, I believe people purchase with a particular zoning that is expected to mean something.   I believe people should be able to choose the type of area that they live including the density of the area.   

    In addition, the ADUs increase the burden on infrastructures that were often not designed for it. 

    I forget the assembly bill that did not get passed that would in effect allowed each SFR lot to be like a R4 lot, allowing up to 4 units.

    All of these state regulations take away the choice from the local community on the density level which in effect means no one has a guarantee to reside in a low density community.  

    I have heard Senator Wienkowski claim it is about owner rights.  That is BS.  Owners (especially owner occupied owners) should be able to purchase and rely on zoning to keep the community with the density permitted by the zoning.  If they do not like the existing zoning, they should purchase elsewhere.  If someone wants to add units, they should purchase lots that are zoned for additional units.  To allow owners to in effect build beyond what was permitted by the existing zoning basically means no one gets a choice of the density of their community.  

    The investment opportunity presented by ADUs makes it likely that an ADU will be my next value add. However, I would have preferred to not have this value add opportunity. I would have continued with our rehab or under utilized zoning value adds. These traditional value add opportunities have worked just fine for us and would have continued to have performed well for us.


    4Reply
  • Benjamin Lenz
    OP
    Realtor · Walnut Creek, CA · Member since 2017 · 39 posts · 18 votes
    6y
    Originally posted by @Dan H.:
    Originally posted by @Benjamin Lenz:
    Originally posted by @Dan H.:

    You are correct that the state allows a jurisdiction to mandate owner occupancy.  

    However, The ADUs also initially had this same limitation.   The removal of the owner occupancy for AFUs is a fairly recent regulation.  I would not be surprised if the owner occupancy requirement associated with JADUs is removed in the not so distant future (but I would prefer if it was not).  

    Thanks Dan for your response! Just curious, why would you prefer it wasn't? Potentially more neighbors? 

    As an investor, I like opportunity presented by ADUs.  

    My mom loved the city life.   She grew up in Berlin.   My dad is in a very low density area.   His lot is 8 acres but backs up to the Cleveland National Forest so he in effect has hundreds/thousands of acres.  I fall in the middle ground and have a lot just over 1 acre.  it would be nice if there was a place for each of us.

    As a citizen and person who prefers to live in a fairly low density area, I believe people purchase with a particular zoning that is expected to mean something.   I believe people should be able to choose the type of area that they live including the density of the area.   

    In addition, the ADUs increase the burden on infrastructures that were often not designed for it. 

    I forget the assembly bill that did not get passed that would in effect allowed each SFR lot to be like a R4 lot, allowing up to 4 units.

    All of these state regulations take away the choice from the local community on the density level which in effect means no one has a guarantee to reside in a low density community.  

    I have heard Senator Wienkowski claim it is about owner rights.  That is BS.  Owners (especially owner occupied owners) should be able to purchase and rely on zoning to keep the community with the density permitted by the zoning.  If they do not like the existing zoning, they should purchase elsewhere.  If someone wants to add units, they should purchase lots that are zoned for additional units.  To allow owners to in effect build beyond what was permitted by the existing zoning basically means no one gets a choice of the density of their community.  

    The investment opportunity presented by ADUs makes it likely that an ADU will be my next value add. However, I would have preferred to not have this value add opportunity. I would have continued with our rehab or under utilized zoning value adds. These traditional value add opportunities have worked just fine for us and would have continued to have performed well for us.


     I certainly can appreciate your points on respecting existing zoning laws and the fact that ADUs and Jr. ADUs can change the characteristics of a neighborhood, and to what extent is TBD. Where I live in the East Bay Area, purchasing in an area already zoned for additional units is astronomically expensive. Multi family is through the roof, as I'm sure it is in your area as well. I would have been overpaying if I wanted to buy in an area zoned for multiple units, versus purchasing a single family home where I can convert the garage. Furthermore, I'm not sure (at least in this area) we have the luxury of keeping single family zoning areas low density. We've already seen the devastating impacts of cities like San Francisco that have sprawling SFHs, and with that low density landscape comes inflated prices that displace people in all sorts of ways. Obviously there's a multitude of complicated contributing factors, but I think higher density housing even in formerly lower density zoned areas via ADUs and Jr. ADUs might be one of the most practical ways homeowners can provide more housing which is desperately needed. But back to your point I can totally understand why some people feel like they'd be encroached on under these circumstances. In the end, it will have to be a compromise between people's personally rights as it relates to their zoning area, or enacting policies that curtail the perpetuation of homelessness and displacement. I appreciate your insight! 

    0Reply
  • Dan H.Pro Member
    Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
    6y
    Originally posted by @Benjamin Lenz:
    Originally posted by @Dan H.:
    Originally posted by @Benjamin Lenz:
    Originally posted by @Dan H.:

    You are correct that the state allows a jurisdiction to mandate owner occupancy.  

    However, The ADUs also initially had this same limitation.   The removal of the owner occupancy for AFUs is a fairly recent regulation.  I would not be surprised if the owner occupancy requirement associated with JADUs is removed in the not so distant future (but I would prefer if it was not).  

    Thanks Dan for your response! Just curious, why would you prefer it wasn't? Potentially more neighbors? 

    As an investor, I like opportunity presented by ADUs.  

    My mom loved the city life.   She grew up in Berlin.   My dad is in a very low density area.   His lot is 8 acres but backs up to the Cleveland National Forest so he in effect has hundreds/thousands of acres.  I fall in the middle ground and have a lot just over 1 acre.  it would be nice if there was a place for each of us.

    As a citizen and person who prefers to live in a fairly low density area, I believe people purchase with a particular zoning that is expected to mean something.   I believe people should be able to choose the type of area that they live including the density of the area.   

    In addition, the ADUs increase the burden on infrastructures that were often not designed for it. 

    I forget the assembly bill that did not get passed that would in effect allowed each SFR lot to be like a R4 lot, allowing up to 4 units.

    All of these state regulations take away the choice from the local community on the density level which in effect means no one has a guarantee to reside in a low density community.  

    I have heard Senator Wienkowski claim it is about owner rights.  That is BS.  Owners (especially owner occupied owners) should be able to purchase and rely on zoning to keep the community with the density permitted by the zoning.  If they do not like the existing zoning, they should purchase elsewhere.  If someone wants to add units, they should purchase lots that are zoned for additional units.  To allow owners to in effect build beyond what was permitted by the existing zoning basically means no one gets a choice of the density of their community.  

    The investment opportunity presented by ADUs makes it likely that an ADU will be my next value add. However, I would have preferred to not have this value add opportunity. I would have continued with our rehab or under utilized zoning value adds. These traditional value add opportunities have worked just fine for us and would have continued to have performed well for us.


     I certainly can appreciate your points on respecting existing zoning laws and the fact that ADUs and Jr. ADUs can change the characteristics of a neighborhood, and to what extent is TBD. Where I live in the East Bay Area, purchasing in an area already zoned for additional units is astronomically expensive. Multi family is through the roof, as I'm sure it is in your area as well. I would have been overpaying if I wanted to buy in an area zoned for multiple units, versus purchasing a single family home where I can convert the garage. Furthermore, I'm not sure (at least in this area) we have the luxury of keeping single family zoning areas low density. We've already seen the devastating impacts of cities like San Francisco that have sprawling SFHs, and with that low density landscape comes inflated prices that displace people in all sorts of ways. Obviously there's a multitude of complicated contributing factors, but I think higher density housing even in formerly lower density zoned areas via ADUs and Jr. ADUs might be one of the most practical ways homeowners can provide more housing which is desperately needed. But back to your point I can totally understand why some people feel like they'd be encroached on under these circumstances. In the end, it will have to be a compromise between people's personally rights as it relates to their zoning area, or enacting policies that curtail the perpetuation of homelessness and displacement. I appreciate your insight! 

    The US has plenty of places for homes.  There are towns in the Midwest with declining populations.  The issue is more people want to live in places like the Bay area and San Diego (NYC, LA, OC, Honolulu, Kona, Boston, etc.).  My view is that people should have to pay the price to live in these nice areas.  In San Diego, we call it the Sunshine Tax.  Our home prices in comparison to salary is near the worst in the nation (at least the Bay area has high salaries).  Sacrifices to live in paradise include outrageous, unaffordable home prices.  

    I am not a fan for increasing density in highly desirable areas just because people want to live there. Basically it can ruin the character of the area. A character that the purchaser may have thought was guaranteed by the existing zoning. Now we know existing CA zoning means squat. If the CA Assembly Bill passes that allow all SFH to be converted up to quad, anyone in CA could have a quad on either side and behind them. As it is now, they could have a SFH, ADU, and JADU (3 units) on either side of them and behind them. People purchased with expectations on density per existing zoning and now those expectations are no longer valid in CA.

    In addition, ADUs are not low cost housing. Higher density housing could be built much cheaper than adding an ADU to existing residential lot. Typical costs of the ADU is >$250/ft for new construction (converting existing space is cheaper). This is not cheap. Apartments can be built for less, but the profit is in higher end apartments so typically the apartments being built have pools, rec rooms, work out rooms, BBQ area, etc. These are not cheap.

    So rents keep rising and the ADUs have not done anything to change that.  Prior to Corona, San Diego rents were going up faster in 2020 than any recent year and the recent years have been going up at over $100/month annually.  The ADUs are not cheap to rent and neither are the new apartments.   The cheapest housing in San Diego is older apartment stock (which also is not cheap).  For the rent controlled units, I expected the market rent to hit the rent increase limit.  I also believe the rent increase will hit its allowed maximum (i.e. 10%, I expect at least 5% inflation this year) for 2020.  So rent controlled units could see rent increases on the order of $200/month average (average apartment rent in San Diego is ~$2250).  For rent stock not rent controlled, the rent should exceed rent control limits (i.e. will be more than $200/month).

    In March, we had an offer on a property with a value add of an ADU (We pulled out during DD because of an risk with the value add). You know what a 3/2 1200' ADU on this site would rent for? Something like $3K/month. Not affordable housing.

    2Reply
  • Whitney Hill
    Contractor · San Diego, CA · Member since 2016 · 88 posts · 100 votes
    6y

    Small note on the JADU requirements... the interior access requirement was recently dropped. Page 2 summary mentions this change, full info here:  https://hcd.ca.gov/community-development/housing-element/docs/ADU_TA_Memo_Final_01-10-20.pdf

    8Reply
  • Account Closed
    San Jose, CA · Member since 2015 · 4k+ posts · 3k+ votes
    6y

    This is incorrect.  The new law says you're allowed to triplex it, as long as you have 4 feet clearance to property lines.  They are not allowed to require you to be owner-occupied right now.

    The new law is only in effect, for now, until 2025.  At that time, local jurisdictions may be allowed to require property owners to be owner-occupied.  But, the new units will be grandfathered in, if they were put into place prior to 2025.

    So, you've been given outdated info.  You need to read the law and take it into the planning dept.  The new law says that local jurisdictions can't require any restrictions contrary to the new law and must comply.

    3Reply
  • Matt Devincenzo
    Investor · Clairemont, CA · Member since 2011 · 3k+ posts · 2k+ votes
    6y
    Originally posted by @Account Closed:

    This is incorrect.  The new law says you're allowed to triplex it, as long as you have 4 feet clearance to property lines.  They are not allowed to require you to be owner-occupied right now.

    The new law is only in effect, for now, until 2025.  At that time, local jurisdictions may be allowed to require property owners to be owner-occupied.  But, the new units will be grandfathered in, if they were put into place prior to 2025.

    So, you've been given outdated info.  You need to read the law and take it into the planning dept.  The new law says that local jurisdictions can't require any restrictions contrary to the new law and must comply.

    Sue not exactly correct. The law says that they can't require OO on the ADU, it does not say that they can't require OO on the JADU. I have a client looking to build a 3 separate 3 unit homes SFR/ADU/JADU in a coastal area of SD, and I just spent several hours reading the codes...the 2025 OO exemption provision doesn't extend to JADUs...

    1Reply
  • Account Closed
    San Jose, CA · Member since 2015 · 4k+ posts · 3k+ votes
    6y
    Originally posted by @Matt Devincenzo:
    Originally posted by @Account Closed:

    This is incorrect.  The new law says you're allowed to triplex it, as long as you have 4 feet clearance to property lines.  They are not allowed to require you to be owner-occupied right now.

    The new law is only in effect, for now, until 2025.  At that time, local jurisdictions may be allowed to require property owners to be owner-occupied.  But, the new units will be grandfathered in, if they were put into place prior to 2025.

    So, you've been given outdated info.  You need to read the law and take it into the planning dept.  The new law says that local jurisdictions can't require any restrictions contrary to the new law and must comply.

    Sue not exactly correct. The law says that they can't require OO on the ADU, it does not say that they can't require OO on the JADU. I have a client looking to build a 3 separate 3 unit homes SFR/ADU/JADU in a coastal area of SD, and I just spent several hours reading the codes...the 2025 OO exemption provision doesn't extend to JADUs...

    I respectfully disagree. Read the entire law. There is nothing in it that says that if there is a JADU that THEN the owner must occupy the property. The law gives a property owner the right to convert a garage, to have an ADU, to have a JADU without requiring owner-occupied. If I'm wrong, show us the code that says differently. I studied this law, so I feel confident I'm correct. But, prove me wrong with a specific code saying otherwise, and I'll bow down.

    Just because a law isn't super specific, doesn't mean some weird interpretation should be inferred. For instance, just because this new law doesn't specifically say that if a tenant in the new ADU has a poodle, then the ADU isn't legal, doesn't make that enforceable.

    So, if the new law isn't specific regarding ADUs being illegal if the tenant in it has a poodle, does that mean that ADUs aren't legal if the tenant has a poodle?

    No. The law says that a property owner of a rental can convert a garage, can build an ADU and a JDU, and no local planning department can say otherwise - until 2025 - including not being allowed to require owner-occupancy.

    Basically, I'm saying that I think you're over-thinking this.

    1Reply
  • Benjamin Lenz
    OP
    Realtor · Walnut Creek, CA · Member since 2017 · 39 posts · 18 votes
    6y
    Originally posted by @Dan H.:
    Originally posted by @Benjamin Lenz:
    Originally posted by @Dan H.:
    Originally posted by @Benjamin Lenz:
    Originally posted by @Dan H.:

    You are correct that the state allows a jurisdiction to mandate owner occupancy.  

    However, The ADUs also initially had this same limitation.   The removal of the owner occupancy for AFUs is a fairly recent regulation.  I would not be surprised if the owner occupancy requirement associated with JADUs is removed in the not so distant future (but I would prefer if it was not).  

    Thanks Dan for your response! Just curious, why would you prefer it wasn't? Potentially more neighbors? 

    As an investor, I like opportunity presented by ADUs.  

    My mom loved the city life.   She grew up in Berlin.   My dad is in a very low density area.   His lot is 8 acres but backs up to the Cleveland National Forest so he in effect has hundreds/thousands of acres.  I fall in the middle ground and have a lot just over 1 acre.  it would be nice if there was a place for each of us.

    As a citizen and person who prefers to live in a fairly low density area, I believe people purchase with a particular zoning that is expected to mean something.   I believe people should be able to choose the type of area that they live including the density of the area.   

    In addition, the ADUs increase the burden on infrastructures that were often not designed for it. 

    I forget the assembly bill that did not get passed that would in effect allowed each SFR lot to be like a R4 lot, allowing up to 4 units.

    All of these state regulations take away the choice from the local community on the density level which in effect means no one has a guarantee to reside in a low density community.  

    I have heard Senator Wienkowski claim it is about owner rights.  That is BS.  Owners (especially owner occupied owners) should be able to purchase and rely on zoning to keep the community with the density permitted by the zoning.  If they do not like the existing zoning, they should purchase elsewhere.  If someone wants to add units, they should purchase lots that are zoned for additional units.  To allow owners to in effect build beyond what was permitted by the existing zoning basically means no one gets a choice of the density of their community.  

    The investment opportunity presented by ADUs makes it likely that an ADU will be my next value add. However, I would have preferred to not have this value add opportunity. I would have continued with our rehab or under utilized zoning value adds. These traditional value add opportunities have worked just fine for us and would have continued to have performed well for us.


     I certainly can appreciate your points on respecting existing zoning laws and the fact that ADUs and Jr. ADUs can change the characteristics of a neighborhood, and to what extent is TBD. Where I live in the East Bay Area, purchasing in an area already zoned for additional units is astronomically expensive. Multi family is through the roof, as I'm sure it is in your area as well. I would have been overpaying if I wanted to buy in an area zoned for multiple units, versus purchasing a single family home where I can convert the garage. Furthermore, I'm not sure (at least in this area) we have the luxury of keeping single family zoning areas low density. We've already seen the devastating impacts of cities like San Francisco that have sprawling SFHs, and with that low density landscape comes inflated prices that displace people in all sorts of ways. Obviously there's a multitude of complicated contributing factors, but I think higher density housing even in formerly lower density zoned areas via ADUs and Jr. ADUs might be one of the most practical ways homeowners can provide more housing which is desperately needed. But back to your point I can totally understand why some people feel like they'd be encroached on under these circumstances. In the end, it will have to be a compromise between people's personally rights as it relates to their zoning area, or enacting policies that curtail the perpetuation of homelessness and displacement. I appreciate your insight! 

    The US has plenty of places for homes.  There are towns in the Midwest with declining populations.  The issue is more people want to live in places like the Bay area and San Diego (NYC, LA, OC, Honolulu, Kona, Boston, etc.).  My view is that people should have to pay the price to live in these nice areas.  In San Diego, we call it the Sunshine Tax.  Our home prices in comparison to salary is near the worst in the nation (at least the Bay area has high salaries).  Sacrifices to live in paradise include outrageous, unaffordable home prices.  

    I am not a fan for increasing density in highly desirable areas just because people want to live there. Basically it can ruin the character of the area. A character that the purchaser may have thought was guaranteed by the existing zoning. Now we know existing CA zoning means squat. If the CA Assembly Bill passes that allow all SFH to be converted up to quad, anyone in CA could have a quad on either side and behind them. As it is now, they could have a SFH, ADU, and JADU (3 units) on either side of them and behind them. People purchased with expectations on density per existing zoning and now those expectations are no longer valid in CA.

    In addition, ADUs are not low cost housing. Higher density housing could be built much cheaper than adding an ADU to existing residential lot. Typical costs of the ADU is >$250/ft for new construction (converting existing space is cheaper). This is not cheap. Apartments can be built for less, but the profit is in higher end apartments so typically the apartments being built have pools, rec rooms, work out rooms, BBQ area, etc. These are not cheap.

    So rents keep rising and the ADUs have not done anything to change that.  Prior to Corona, San Diego rents were going up faster in 2020 than any recent year and the recent years have been going up at over $100/month annually.  The ADUs are not cheap to rent and neither are the new apartments.   The cheapest housing in San Diego is older apartment stock (which also is not cheap).  For the rent controlled units, I expected the market rent to hit the rent increase limit.  I also believe the rent increase will hit its allowed maximum (i.e. 10%, I expect at least 5% inflation this year) for 2020.  So rent controlled units could see rent increases on the order of $200/month average (average apartment rent in San Diego is ~$2250).  For rent stock not rent controlled, the rent should exceed rent control limits (i.e. will be more than $200/month).

    In March, we had an offer on a property with a value add of an ADU (We pulled out during DD because of an risk with the value add). You know what a 3/2 1200' ADU on this site would rent for? Something like $3K/month. Not affordable housing.

    Dan, you make a lot more great points. Although part of me wants to believe that people should simply afford where they can afford to live, I don't know that for many this is practical. Not all, but many have deep routes in the places where they are born and the communities which they've grown up in. Someone who's grown up in San Francisco who works in a liquor store should not have to be displaced because of tech and a lack of housing. That just seems like a fundamentally broken system. Also, how do the service workers afford to live in these places where there isn't affordable housing? I'm not saying ADUs are the answer to these hard questions but picking up and leaving is not always so simple. I do think though that if you want to live in one of these desirable locations, you better have a solid job and income lined up because at this point you should know better. In places like San Diego and the Bay Area where there are geographical restraints on building, maybe ADUs and Jr. ADUs are not the worst idea as you are providing more units within lot lines that already exist. You can't just throw up new complexes left and right like you can in Kansas where it's flat and you simply build outwards. And maybe a 3/2 ADU isn't affordable, but the more there are the more they will become affordable as the laws of supply and demand state. Or maybe when Grandma moves into the ADU it opens up another space for someone else. There is a domino effect. Maybe they can raise property taxes or tax people who decide to make these additions to raise money to offset some of the negative sequelae of ADUs. But again, I really agree with you on so many levels. The truth is I don't know what the right answer is, but I don't think more ADUs are going to make a net negative impact. There are plenty of cities where these are widespread and part of the culture, but regardless CA is moving in this direction and the proof will be in the pudding.

    2Reply
  • Benjamin Lenz
    OP
    Realtor · Walnut Creek, CA · Member since 2017 · 39 posts · 18 votes
    6y
    Originally posted by @Whitney Hill:

    Small note on the JADU requirements... the interior access requirement was recently dropped. Page 2 summary mentions this change, full info here:  https://hcd.ca.gov/community-development/housing-element/docs/ADU_TA_Memo_Final_01-10-20.pdf

    Awesome!! Thanks that's one less hurdle appreciate it Whitney! 

    0Reply
  • Dan H.Pro Member
    Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
    6y
    Originally posted by @Account Closed:
    Originally posted by @Matt Devincenzo:
    Originally posted by @Account Closed:

    This is incorrect.  The new law says you're allowed to triplex it, as long as you have 4 feet clearance to property lines.  They are not allowed to require you to be owner-occupied right now.

    The new law is only in effect, for now, until 2025.  At that time, local jurisdictions may be allowed to require property owners to be owner-occupied.  But, the new units will be grandfathered in, if they were put into place prior to 2025.

    So, you've been given outdated info.  You need to read the law and take it into the planning dept.  The new law says that local jurisdictions can't require any restrictions contrary to the new law and must comply.

    Sue not exactly correct. The law says that they can't require OO on the ADU, it does not say that they can't require OO on the JADU. I have a client looking to build a 3 separate 3 unit homes SFR/ADU/JADU in a coastal area of SD, and I just spent several hours reading the codes...the 2025 OO exemption provision doesn't extend to JADUs...

    I respectfully disagree. Read the entire law. There is nothing in it that says that if there is a JADU that THEN the owner must occupy the property. The law gives a property owner the right to convert a garage, to have an ADU, to have a JADU without requiring owner-occupied. If I'm wrong, show us the code that says differently. I studied this law, so I feel confident I'm correct. But, prove me wrong with a specific code saying otherwise, and I'll bow down.

    Just because a law isn't super specific, doesn't mean some weird interpretation should be inferred. For instance, just because this new law doesn't specifically say that if a tenant in the new ADU has a poodle, then the ADU isn't legal, doesn't make that enforceable.

    So, if the new law isn't specific regarding ADUs being illegal if the tenant in it has a poodle, does that mean that ADUs aren't legal if the tenant has a poodle?

    No. The law says that a property owner of a rental can convert a garage, can build an ADU and a JDU, and no local planning department can say otherwise - until 2025 - including not being allowed to require owner-occupancy.

    Basically, I'm saying that I think you're over-thinking this.

    Cut directly from AB68:

    "Require owner-occupancy in the single-family residence in which the junior accessory dwelling unit will be permitted. The owner may reside in either the remaining portion of the structure or the newly created junior accessory dwelling unit. Owner-occupancy shall not be required if the owner is another governmental agency, land trust, or housing organization."

    Seems cut and dry that with limited exceptions JADU can require owner occupancy.  I have also looked at various housing jurisdictions' regulations and everyone of the ones I have looked at mandates owner occupancy when adding a JADU.

    ADU has no owner occupancy requirement (state mandated). JADU has an owner occupancy requirement.

    1Reply
  • Benjamin Lenz
    OP
    Realtor · Walnut Creek, CA · Member since 2017 · 39 posts · 18 votes
    6y
    Originally posted by @Account Closed:

    This is incorrect.  The new law says you're allowed to triplex it, as long as you have 4 feet clearance to property lines.  They are not allowed to require you to be owner-occupied right now.

    The new law is only in effect, for now, until 2025.  At that time, local jurisdictions may be allowed to require property owners to be owner-occupied.  But, the new units will be grandfathered in, if they were put into place prior to 2025.

    So, you've been given outdated info.  You need to read the law and take it into the planning dept.  The new law says that local jurisdictions can't require any restrictions contrary to the new law and must comply.

    Hi Sue, I appreciate your response. I have read the 2020 ADU laws in full and I agree with Matt on this one. The law does not cover Jr. ADUs from what I've read. Can you show me where it states that a local jurisdiction cannot enforce OO on a JADU?

    0Reply
  • Benjamin Lenz
    OP
    Realtor · Walnut Creek, CA · Member since 2017 · 39 posts · 18 votes
    6y
    Originally posted by @Benjamin Lenz:
    Originally posted by @Account Closed:

    This is incorrect.  The new law says you're allowed to triplex it, as long as you have 4 feet clearance to property lines.  They are not allowed to require you to be owner-occupied right now.

    The new law is only in effect, for now, until 2025.  At that time, local jurisdictions may be allowed to require property owners to be owner-occupied.  But, the new units will be grandfathered in, if they were put into place prior to 2025.

    So, you've been given outdated info.  You need to read the law and take it into the planning dept.  The new law says that local jurisdictions can't require any restrictions contrary to the new law and must comply.

    Hi Sue, I appreciate your response. I have read the 2020 ADU laws in full and I agree with Matt on this one. The law does not cover Jr. ADUs from what I've read. Can you show me where it states that a local jurisdiction cannot enforce OO on a JADU?

    I also agree this is clearly stated and the planning departments are well aware of this. My last idea is that the local and state governments could implement programs as they do with Section 8 to incentivize homeowners with ADUs to offer affordable housing. But that won't help change your mind on the fact that you think zoning laws should be respected and not flexible, which I do understand.  

    0Reply
  • Dan H.Pro Member
    Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
    6y
    Originally posted by @Benjamin Lenz:
    Originally posted by @Dan H.:
    Originally posted by @Benjamin Lenz:
    Originally posted by @Dan H.:
    Originally posted by @Benjamin Lenz:
    Originally posted by @Dan H.:

    You are correct that the state allows a jurisdiction to mandate owner occupancy.  

    However, The ADUs also initially had this same limitation.   The removal of the owner occupancy for AFUs is a fairly recent regulation.  I would not be surprised if the owner occupancy requirement associated with JADUs is removed in the not so distant future (but I would prefer if it was not).  

    Thanks Dan for your response! Just curious, why would you prefer it wasn't? Potentially more neighbors? 

    As an investor, I like opportunity presented by ADUs.  

    My mom loved the city life.   She grew up in Berlin.   My dad is in a very low density area.   His lot is 8 acres but backs up to the Cleveland National Forest so he in effect has hundreds/thousands of acres.  I fall in the middle ground and have a lot just over 1 acre.  it would be nice if there was a place for each of us.

    As a citizen and person who prefers to live in a fairly low density area, I believe people purchase with a particular zoning that is expected to mean something.   I believe people should be able to choose the type of area that they live including the density of the area.   

    In addition, the ADUs increase the burden on infrastructures that were often not designed for it. 

    I forget the assembly bill that did not get passed that would in effect allowed each SFR lot to be like a R4 lot, allowing up to 4 units.

    All of these state regulations take away the choice from the local community on the density level which in effect means no one has a guarantee to reside in a low density community.  

    I have heard Senator Wienkowski claim it is about owner rights.  That is BS.  Owners (especially owner occupied owners) should be able to purchase and rely on zoning to keep the community with the density permitted by the zoning.  If they do not like the existing zoning, they should purchase elsewhere.  If someone wants to add units, they should purchase lots that are zoned for additional units.  To allow owners to in effect build beyond what was permitted by the existing zoning basically means no one gets a choice of the density of their community.  

    The investment opportunity presented by ADUs makes it likely that an ADU will be my next value add. However, I would have preferred to not have this value add opportunity. I would have continued with our rehab or under utilized zoning value adds. These traditional value add opportunities have worked just fine for us and would have continued to have performed well for us.


     I certainly can appreciate your points on respecting existing zoning laws and the fact that ADUs and Jr. ADUs can change the characteristics of a neighborhood, and to what extent is TBD. Where I live in the East Bay Area, purchasing in an area already zoned for additional units is astronomically expensive. Multi family is through the roof, as I'm sure it is in your area as well. I would have been overpaying if I wanted to buy in an area zoned for multiple units, versus purchasing a single family home where I can convert the garage. Furthermore, I'm not sure (at least in this area) we have the luxury of keeping single family zoning areas low density. We've already seen the devastating impacts of cities like San Francisco that have sprawling SFHs, and with that low density landscape comes inflated prices that displace people in all sorts of ways. Obviously there's a multitude of complicated contributing factors, but I think higher density housing even in formerly lower density zoned areas via ADUs and Jr. ADUs might be one of the most practical ways homeowners can provide more housing which is desperately needed. But back to your point I can totally understand why some people feel like they'd be encroached on under these circumstances. In the end, it will have to be a compromise between people's personally rights as it relates to their zoning area, or enacting policies that curtail the perpetuation of homelessness and displacement. I appreciate your insight! 

    The US has plenty of places for homes.  There are towns in the Midwest with declining populations.  The issue is more people want to live in places like the Bay area and San Diego (NYC, LA, OC, Honolulu, Kona, Boston, etc.).  My view is that people should have to pay the price to live in these nice areas.  In San Diego, we call it the Sunshine Tax.  Our home prices in comparison to salary is near the worst in the nation (at least the Bay area has high salaries).  Sacrifices to live in paradise include outrageous, unaffordable home prices.  

    I am not a fan for increasing density in highly desirable areas just because people want to live there. Basically it can ruin the character of the area. A character that the purchaser may have thought was guaranteed by the existing zoning. Now we know existing CA zoning means squat. If the CA Assembly Bill passes that allow all SFH to be converted up to quad, anyone in CA could have a quad on either side and behind them. As it is now, they could have a SFH, ADU, and JADU (3 units) on either side of them and behind them. People purchased with expectations on density per existing zoning and now those expectations are no longer valid in CA.

    In addition, ADUs are not low cost housing. Higher density housing could be built much cheaper than adding an ADU to existing residential lot. Typical costs of the ADU is >$250/ft for new construction (converting existing space is cheaper). This is not cheap. Apartments can be built for less, but the profit is in higher end apartments so typically the apartments being built have pools, rec rooms, work out rooms, BBQ area, etc. These are not cheap.

    So rents keep rising and the ADUs have not done anything to change that.  Prior to Corona, San Diego rents were going up faster in 2020 than any recent year and the recent years have been going up at over $100/month annually.  The ADUs are not cheap to rent and neither are the new apartments.   The cheapest housing in San Diego is older apartment stock (which also is not cheap).  For the rent controlled units, I expected the market rent to hit the rent increase limit.  I also believe the rent increase will hit its allowed maximum (i.e. 10%, I expect at least 5% inflation this year) for 2020.  So rent controlled units could see rent increases on the order of $200/month average (average apartment rent in San Diego is ~$2250).  For rent stock not rent controlled, the rent should exceed rent control limits (i.e. will be more than $200/month).

    In March, we had an offer on a property with a value add of an ADU (We pulled out during DD because of an risk with the value add). You know what a 3/2 1200' ADU on this site would rent for? Something like $3K/month. Not affordable housing.

    Dan, you make a lot more great points. Although part of me wants to believe that people should simply afford where they can afford to live, I don't know that for many this is practical. Not all, but many have deep routes in the places where they are born and the communities which they've grown up in. Someone who's grown up in San Francisco who works in a liquor store should not have to be displaced because of tech and a lack of housing. That just seems like a fundamentally broken system. Also, how do the service workers afford to live in these places where there isn't affordable housing? I'm not saying ADUs are the answer to these hard questions but picking up and leaving is not always so simple. I do think though that if you want to live in one of these desirable locations, you better have a solid job and income lined up because at this point you should know better. In places like San Diego and the Bay Area where there are geographical restraints on building, maybe ADUs and Jr. ADUs are not the worst idea as you are providing more units within lot lines that already exist. You can't just throw up new complexes left and right like you can in Kansas where it's flat and you simply build outwards. And maybe a 3/2 ADU isn't affordable, but the more there are the more they will become affordable as the laws of supply and demand state. Or maybe when Grandma moves into the ADU it opens up another space for someone else. There is a domino effect. Maybe they can raise property taxes or tax people who decide to make these additions to raise money to offset some of the negative sequelae of ADUs. But again, I really agree with you on so many levels. The truth is I don't know what the right answer is, but I don't think more ADUs are going to make a net negative impact. There are plenty of cities where these are widespread and part of the culture, but regardless CA is moving in this direction and the proof will be in the pudding.

    >regardless CA is moving in this direction and the proof will be in the pudding. 

    Seems to be the case. 

    >many have deep routes in the places where they are born and the communities which they've grown up in. Someone who's grown up in San Francisco who works in a liquor store should not have to be displaced because of tech and a lack of housing. That just seems like a fundamentally broken system.

    I do not fully disagree, but this is where the sacrifices come in.  In CA, the housing rules already allowed occupancy at 2 * numBedrooms + 1 (A LL cannot reject a tenant for over occupancy at less than this number of tenants).  Maximizing occupancy is one of those sacrifices that I find reasonable.  A 5 BR cannot limit to less than 11 people.  Under such living conditions, even in somewhat expensive areas it is less than $500/person.  In cheap areas, less than $250/person.

    To use your case, what about the 3rd generation San Diegan that wants to continue to live in lower density area and purchased in a lower density area. The city I live in has the nick name "The City in the country". People move to this city for the outstanding schools and the lower density. The house behind me has the biggest ADU I have ever seen, which was added to a home that may be is 8000'. Not sufficient to build a dorm style house, but he had to add a very large ADU (the ADU looks much nicer than the primary dwelling). Same owner has a 2nd lot to build behind me.

    When I move, I will be adding an ADU to my property but I will be looking to move to a very specific new home. One that will be hard to impact by changing regulations.

    1Reply
  • Seth Borman
    Rental Property Investor · Phoenix, AZ · Member since 2016 · 553 posts · 314 votes
    6y

    The new ADU laws were created to try and get SOME housing built in a state that has fought against new homes tooth and nail for 40 years.

    As a result, 20% of all new homes in Los Angeles last year were ADUs.

    If that isn't optimal... call up your electeds and tell them you want to see more apartments with less parking in urban neighborhoods.

    3Reply
  • Colin L.
    Architect · San Diego, CA · Member since 2013 · 244 posts · 101 votes
    6y
    Originally posted by @Dan H.:

    Cut directly from AB68:

    "Require owner-occupancy in the single-family residence in which the junior accessory dwelling unit will be permitted. The owner may reside in either the remaining portion of the structure or the newly created junior accessory dwelling unit. Owner-occupancy shall not be required if the owner is another governmental agency, land trust, or housing organization."

    Seems cut and dry that with limited exceptions JADU can require owner occupancy.  I have also looked at various housing jurisdictions' regulations and everyone of the ones I have looked at mandates owner occupancy when adding a JADU.

    ADU has no owner occupancy requirement (state mandated). JADU has an owner occupancy requirement.

    Yup, the state law is clear, OO is required for a JADU. I also agree with Dan that this will likely be short lived. It is unenforceable in my opinion. No city or county has the resources to hunt down JADU's being rented after an Owner moves out.

    2Reply
  • Benjamin Lenz
    OP
    Realtor · Walnut Creek, CA · Member since 2017 · 39 posts · 18 votes
    6y
    Originally posted by @Dan H.:
    Originally posted by @Benjamin Lenz:
    Originally posted by @Dan H.:
    Originally posted by @Benjamin Lenz:
    Originally posted by @Dan H.:
    Originally posted by @Benjamin Lenz:
    Originally posted by @Dan H.:

    You are correct that the state allows a jurisdiction to mandate owner occupancy.  

    However, The ADUs also initially had this same limitation.   The removal of the owner occupancy for AFUs is a fairly recent regulation.  I would not be surprised if the owner occupancy requirement associated with JADUs is removed in the not so distant future (but I would prefer if it was not).  

    Thanks Dan for your response! Just curious, why would you prefer it wasn't? Potentially more neighbors? 

    As an investor, I like opportunity presented by ADUs.  

    My mom loved the city life.   She grew up in Berlin.   My dad is in a very low density area.   His lot is 8 acres but backs up to the Cleveland National Forest so he in effect has hundreds/thousands of acres.  I fall in the middle ground and have a lot just over 1 acre.  it would be nice if there was a place for each of us.

    As a citizen and person who prefers to live in a fairly low density area, I believe people purchase with a particular zoning that is expected to mean something.   I believe people should be able to choose the type of area that they live including the density of the area.   

    In addition, the ADUs increase the burden on infrastructures that were often not designed for it. 

    I forget the assembly bill that did not get passed that would in effect allowed each SFR lot to be like a R4 lot, allowing up to 4 units.

    All of these state regulations take away the choice from the local community on the density level which in effect means no one has a guarantee to reside in a low density community.  

    I have heard Senator Wienkowski claim it is about owner rights.  That is BS.  Owners (especially owner occupied owners) should be able to purchase and rely on zoning to keep the community with the density permitted by the zoning.  If they do not like the existing zoning, they should purchase elsewhere.  If someone wants to add units, they should purchase lots that are zoned for additional units.  To allow owners to in effect build beyond what was permitted by the existing zoning basically means no one gets a choice of the density of their community.  

    The investment opportunity presented by ADUs makes it likely that an ADU will be my next value add. However, I would have preferred to not have this value add opportunity. I would have continued with our rehab or under utilized zoning value adds. These traditional value add opportunities have worked just fine for us and would have continued to have performed well for us.


     I certainly can appreciate your points on respecting existing zoning laws and the fact that ADUs and Jr. ADUs can change the characteristics of a neighborhood, and to what extent is TBD. Where I live in the East Bay Area, purchasing in an area already zoned for additional units is astronomically expensive. Multi family is through the roof, as I'm sure it is in your area as well. I would have been overpaying if I wanted to buy in an area zoned for multiple units, versus purchasing a single family home where I can convert the garage. Furthermore, I'm not sure (at least in this area) we have the luxury of keeping single family zoning areas low density. We've already seen the devastating impacts of cities like San Francisco that have sprawling SFHs, and with that low density landscape comes inflated prices that displace people in all sorts of ways. Obviously there's a multitude of complicated contributing factors, but I think higher density housing even in formerly lower density zoned areas via ADUs and Jr. ADUs might be one of the most practical ways homeowners can provide more housing which is desperately needed. But back to your point I can totally understand why some people feel like they'd be encroached on under these circumstances. In the end, it will have to be a compromise between people's personally rights as it relates to their zoning area, or enacting policies that curtail the perpetuation of homelessness and displacement. I appreciate your insight! 

    The US has plenty of places for homes.  There are towns in the Midwest with declining populations.  The issue is more people want to live in places like the Bay area and San Diego (NYC, LA, OC, Honolulu, Kona, Boston, etc.).  My view is that people should have to pay the price to live in these nice areas.  In San Diego, we call it the Sunshine Tax.  Our home prices in comparison to salary is near the worst in the nation (at least the Bay area has high salaries).  Sacrifices to live in paradise include outrageous, unaffordable home prices.  

    I am not a fan for increasing density in highly desirable areas just because people want to live there. Basically it can ruin the character of the area. A character that the purchaser may have thought was guaranteed by the existing zoning. Now we know existing CA zoning means squat. If the CA Assembly Bill passes that allow all SFH to be converted up to quad, anyone in CA could have a quad on either side and behind them. As it is now, they could have a SFH, ADU, and JADU (3 units) on either side of them and behind them. People purchased with expectations on density per existing zoning and now those expectations are no longer valid in CA.

    In addition, ADUs are not low cost housing. Higher density housing could be built much cheaper than adding an ADU to existing residential lot. Typical costs of the ADU is >$250/ft for new construction (converting existing space is cheaper). This is not cheap. Apartments can be built for less, but the profit is in higher end apartments so typically the apartments being built have pools, rec rooms, work out rooms, BBQ area, etc. These are not cheap.

    So rents keep rising and the ADUs have not done anything to change that.  Prior to Corona, San Diego rents were going up faster in 2020 than any recent year and the recent years have been going up at over $100/month annually.  The ADUs are not cheap to rent and neither are the new apartments.   The cheapest housing in San Diego is older apartment stock (which also is not cheap).  For the rent controlled units, I expected the market rent to hit the rent increase limit.  I also believe the rent increase will hit its allowed maximum (i.e. 10%, I expect at least 5% inflation this year) for 2020.  So rent controlled units could see rent increases on the order of $200/month average (average apartment rent in San Diego is ~$2250).  For rent stock not rent controlled, the rent should exceed rent control limits (i.e. will be more than $200/month).

    In March, we had an offer on a property with a value add of an ADU (We pulled out during DD because of an risk with the value add). You know what a 3/2 1200' ADU on this site would rent for? Something like $3K/month. Not affordable housing.

    Dan, you make a lot more great points. Although part of me wants to believe that people should simply afford where they can afford to live, I don't know that for many this is practical. Not all, but many have deep routes in the places where they are born and the communities which they've grown up in. Someone who's grown up in San Francisco who works in a liquor store should not have to be displaced because of tech and a lack of housing. That just seems like a fundamentally broken system. Also, how do the service workers afford to live in these places where there isn't affordable housing? I'm not saying ADUs are the answer to these hard questions but picking up and leaving is not always so simple. I do think though that if you want to live in one of these desirable locations, you better have a solid job and income lined up because at this point you should know better. In places like San Diego and the Bay Area where there are geographical restraints on building, maybe ADUs and Jr. ADUs are not the worst idea as you are providing more units within lot lines that already exist. You can't just throw up new complexes left and right like you can in Kansas where it's flat and you simply build outwards. And maybe a 3/2 ADU isn't affordable, but the more there are the more they will become affordable as the laws of supply and demand state. Or maybe when Grandma moves into the ADU it opens up another space for someone else. There is a domino effect. Maybe they can raise property taxes or tax people who decide to make these additions to raise money to offset some of the negative sequelae of ADUs. But again, I really agree with you on so many levels. The truth is I don't know what the right answer is, but I don't think more ADUs are going to make a net negative impact. There are plenty of cities where these are widespread and part of the culture, but regardless CA is moving in this direction and the proof will be in the pudding.

    >regardless CA is moving in this direction and the proof will be in the pudding. 

    Seems to be the case. 

    >many have deep routes in the places where they are born and the communities which they've grown up in. Someone who's grown up in San Francisco who works in a liquor store should not have to be displaced because of tech and a lack of housing. That just seems like a fundamentally broken system.

    I do not fully disagree, but this is where the sacrifices come in.  In CA, the housing rules already allowed occupancy at 2 * numBedrooms + 1 (A LL cannot reject a tenant for over occupancy at less than this number of tenants).  Maximizing occupancy is one of those sacrifices that I find reasonable.  A 5 BR cannot limit to less than 11 people.  Under such living conditions, even in somewhat expensive areas it is less than $500/person.  In cheap areas, less than $250/person.

    To use your case, what about the 3rd generation San Diegan that wants to continue to live in lower density area and purchased in a lower density area. The city I live in has the nick name "The City in the country". People move to this city for the outstanding schools and the lower density. The house behind me has the biggest ADU I have ever seen, which was added to a home that may be is 8000'. Not sufficient to build a dorm style house, but he had to add a very large ADU (the ADU looks much nicer than the primary dwelling). Same owner has a 2nd lot to build behind me.

    When I move, I will be adding an ADU to my property but I will be looking to move to a very specific new home. One that will be hard to impact by changing regulations.

     I completely agree. I think maximizing the occupancy in a residence is a very acceptable way to reduce costs, but many of them are already doing that. Also tough when you have kids. San Diego and other places may want to preserve the “countryness” of their city, but we’ve had a growing population for a long time and unless we want to perpetuate more homelessness and other growing issues we better increase our housing supply in some other way besides luxury condos. 

    0Reply
  • Dan H.Pro Member
    Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
    6y
    Originally posted by @Benjamin Lenz:
    Originally posted by @Dan H.:
    Originally posted by @Benjamin Lenz:
    Originally posted by @Dan H.:
    Originally posted by @Benjamin Lenz:
    Originally posted by @Dan H.:
    Originally posted by @Benjamin Lenz:
    Originally posted by @Dan H.:

    You are correct that the state allows a jurisdiction to mandate owner occupancy.  

    However, The ADUs also initially had this same limitation.   The removal of the owner occupancy for AFUs is a fairly recent regulation.  I would not be surprised if the owner occupancy requirement associated with JADUs is removed in the not so distant future (but I would prefer if it was not).  

    Thanks Dan for your response! Just curious, why would you prefer it wasn't? Potentially more neighbors? 

    As an investor, I like opportunity presented by ADUs.  

    My mom loved the city life.   She grew up in Berlin.   My dad is in a very low density area.   His lot is 8 acres but backs up to the Cleveland National Forest so he in effect has hundreds/thousands of acres.  I fall in the middle ground and have a lot just over 1 acre.  it would be nice if there was a place for each of us.

    As a citizen and person who prefers to live in a fairly low density area, I believe people purchase with a particular zoning that is expected to mean something.   I believe people should be able to choose the type of area that they live including the density of the area.   

    In addition, the ADUs increase the burden on infrastructures that were often not designed for it. 

    I forget the assembly bill that did not get passed that would in effect allowed each SFR lot to be like a R4 lot, allowing up to 4 units.

    All of these state regulations take away the choice from the local community on the density level which in effect means no one has a guarantee to reside in a low density community.  

    I have heard Senator Wienkowski claim it is about owner rights.  That is BS.  Owners (especially owner occupied owners) should be able to purchase and rely on zoning to keep the community with the density permitted by the zoning.  If they do not like the existing zoning, they should purchase elsewhere.  If someone wants to add units, they should purchase lots that are zoned for additional units.  To allow owners to in effect build beyond what was permitted by the existing zoning basically means no one gets a choice of the density of their community.  

    The investment opportunity presented by ADUs makes it likely that an ADU will be my next value add. However, I would have preferred to not have this value add opportunity. I would have continued with our rehab or under utilized zoning value adds. These traditional value add opportunities have worked just fine for us and would have continued to have performed well for us.


     I certainly can appreciate your points on respecting existing zoning laws and the fact that ADUs and Jr. ADUs can change the characteristics of a neighborhood, and to what extent is TBD. Where I live in the East Bay Area, purchasing in an area already zoned for additional units is astronomically expensive. Multi family is through the roof, as I'm sure it is in your area as well. I would have been overpaying if I wanted to buy in an area zoned for multiple units, versus purchasing a single family home where I can convert the garage. Furthermore, I'm not sure (at least in this area) we have the luxury of keeping single family zoning areas low density. We've already seen the devastating impacts of cities like San Francisco that have sprawling SFHs, and with that low density landscape comes inflated prices that displace people in all sorts of ways. Obviously there's a multitude of complicated contributing factors, but I think higher density housing even in formerly lower density zoned areas via ADUs and Jr. ADUs might be one of the most practical ways homeowners can provide more housing which is desperately needed. But back to your point I can totally understand why some people feel like they'd be encroached on under these circumstances. In the end, it will have to be a compromise between people's personally rights as it relates to their zoning area, or enacting policies that curtail the perpetuation of homelessness and displacement. I appreciate your insight! 

    The US has plenty of places for homes.  There are towns in the Midwest with declining populations.  The issue is more people want to live in places like the Bay area and San Diego (NYC, LA, OC, Honolulu, Kona, Boston, etc.).  My view is that people should have to pay the price to live in these nice areas.  In San Diego, we call it the Sunshine Tax.  Our home prices in comparison to salary is near the worst in the nation (at least the Bay area has high salaries).  Sacrifices to live in paradise include outrageous, unaffordable home prices.  

    I am not a fan for increasing density in highly desirable areas just because people want to live there. Basically it can ruin the character of the area. A character that the purchaser may have thought was guaranteed by the existing zoning. Now we know existing CA zoning means squat. If the CA Assembly Bill passes that allow all SFH to be converted up to quad, anyone in CA could have a quad on either side and behind them. As it is now, they could have a SFH, ADU, and JADU (3 units) on either side of them and behind them. People purchased with expectations on density per existing zoning and now those expectations are no longer valid in CA.

    In addition, ADUs are not low cost housing. Higher density housing could be built much cheaper than adding an ADU to existing residential lot. Typical costs of the ADU is >$250/ft for new construction (converting existing space is cheaper). This is not cheap. Apartments can be built for less, but the profit is in higher end apartments so typically the apartments being built have pools, rec rooms, work out rooms, BBQ area, etc. These are not cheap.

    So rents keep rising and the ADUs have not done anything to change that.  Prior to Corona, San Diego rents were going up faster in 2020 than any recent year and the recent years have been going up at over $100/month annually.  The ADUs are not cheap to rent and neither are the new apartments.   The cheapest housing in San Diego is older apartment stock (which also is not cheap).  For the rent controlled units, I expected the market rent to hit the rent increase limit.  I also believe the rent increase will hit its allowed maximum (i.e. 10%, I expect at least 5% inflation this year) for 2020.  So rent controlled units could see rent increases on the order of $200/month average (average apartment rent in San Diego is ~$2250).  For rent stock not rent controlled, the rent should exceed rent control limits (i.e. will be more than $200/month).

    In March, we had an offer on a property with a value add of an ADU (We pulled out during DD because of an risk with the value add). You know what a 3/2 1200' ADU on this site would rent for? Something like $3K/month. Not affordable housing.

    Dan, you make a lot more great points. Although part of me wants to believe that people should simply afford where they can afford to live, I don't know that for many this is practical. Not all, but many have deep routes in the places where they are born and the communities which they've grown up in. Someone who's grown up in San Francisco who works in a liquor store should not have to be displaced because of tech and a lack of housing. That just seems like a fundamentally broken system. Also, how do the service workers afford to live in these places where there isn't affordable housing? I'm not saying ADUs are the answer to these hard questions but picking up and leaving is not always so simple. I do think though that if you want to live in one of these desirable locations, you better have a solid job and income lined up because at this point you should know better. In places like San Diego and the Bay Area where there are geographical restraints on building, maybe ADUs and Jr. ADUs are not the worst idea as you are providing more units within lot lines that already exist. You can't just throw up new complexes left and right like you can in Kansas where it's flat and you simply build outwards. And maybe a 3/2 ADU isn't affordable, but the more there are the more they will become affordable as the laws of supply and demand state. Or maybe when Grandma moves into the ADU it opens up another space for someone else. There is a domino effect. Maybe they can raise property taxes or tax people who decide to make these additions to raise money to offset some of the negative sequelae of ADUs. But again, I really agree with you on so many levels. The truth is I don't know what the right answer is, but I don't think more ADUs are going to make a net negative impact. There are plenty of cities where these are widespread and part of the culture, but regardless CA is moving in this direction and the proof will be in the pudding.

    >regardless CA is moving in this direction and the proof will be in the pudding. 

    Seems to be the case. 

    >many have deep routes in the places where they are born and the communities which they've grown up in. Someone who's grown up in San Francisco who works in a liquor store should not have to be displaced because of tech and a lack of housing. That just seems like a fundamentally broken system.

    I do not fully disagree, but this is where the sacrifices come in.  In CA, the housing rules already allowed occupancy at 2 * numBedrooms + 1 (A LL cannot reject a tenant for over occupancy at less than this number of tenants).  Maximizing occupancy is one of those sacrifices that I find reasonable.  A 5 BR cannot limit to less than 11 people.  Under such living conditions, even in somewhat expensive areas it is less than $500/person.  In cheap areas, less than $250/person.

    To use your case, what about the 3rd generation San Diegan that wants to continue to live in lower density area and purchased in a lower density area. The city I live in has the nick name "The City in the country". People move to this city for the outstanding schools and the lower density. The house behind me has the biggest ADU I have ever seen, which was added to a home that may be is 8000'. Not sufficient to build a dorm style house, but he had to add a very large ADU (the ADU looks much nicer than the primary dwelling). Same owner has a 2nd lot to build behind me.

    When I move, I will be adding an ADU to my property but I will be looking to move to a very specific new home. One that will be hard to impact by changing regulations.

     I completely agree. I think maximizing the occupancy in a residence is a very acceptable way to reduce costs, but many of them are already doing that. Also tough when you have kids. San Diego and other places may want to preserve the “countryness” of their city, but we’ve had a growing population for a long time and unless we want to perpetuate more homelessness and other growing issues we better increase our housing supply in some other way besides luxury condos. 

     The city in the country is Poway. It is a city in north San Diego county.  San Diego City varies in its neighborhoods on the desired density, but most areas are high density.  

    I would rather see the population stop increasing at these locations that have little area for additional housing.  If additional housing is to be added, add it to areas that have already been zoned for high density like downtown San Diego.   The US does not have housing shortage.  Certain cities in the United States do have a housing shortage.  The state politicians (Senator Wienkowski, etc) in CA behave as though they believe everyone who wants to live in those cities should be able to even at the cost of what makes some of the areas special.

    Changing rules statewide to increase zoning will lead to the highly desired low density areas to having increased density resulting in no desirable areas maintaining a low density situation.

    Many people love city life and are fine living in high density areas (like downtown San Diego).  Others prefer lower density areas.  I would like to preserve both options in San Diego county, but the state politicians apparently do not share my belief.

    1Reply
  • Brett Goldsmith
    Investor · Los Angeles, CA · Member since 2012 · 1k+ posts · 500 votes
    6y

    Can you share the section of the law that it's required to be owner occupied? I believe I had read somewhere that they removed this. 

    0Reply
  • Matt Devincenzo
    Investor · Clairemont, CA · Member since 2011 · 3k+ posts · 2k+ votes
    6y

    @Brett Goldsmith Sure it's a two step process first read the main portion, and then the subsection with guidance specific to JADUs. @Account Closed mentioned the same removal of OO requirement you did, and really the understanding comes down to a definition of one word.

    65852.2(a) (6) (B) Notwithstanding subparagraph (A), a local agency shall not impose an owner-occupant requirement on an accessory dwelling unit permitted between January 1, 2020, to January 1, 2025, during which time the local agency was prohibited from imposing an owner-occupant requirement.

    This section is from the general discussion of ADU/JADUs and their application ect. but you'll notice the prohibition from requiring OO is specific to the ADU. Elsewhere in this section and other they reference ADU/JADU, but here they do not. Following that is this section below:

    65852.22. (a) Notwithstanding Section 65852.2, a local agency may, by ordinance, provide for the creation of junior accessory dwelling units in single-family residential zones. The ordinance may require a permit to be obtained for the creation of a junior accessory dwelling unit, and shall do all of the following: (1) Limit the number of junior accessory dwelling units to one per residential lot zoned for singlefamily residences with a single-family residence already built built, or proposed to be built, on the lot. (2) Require owner-occupancy in the single-family residence in which the junior accessory dwelling unit will be permitted. The owner may reside in either the remaining portion of the structure or the newly created junior accessory dwelling unit. Owner-occupancy shall not be required if the owner is another governmental agency, land trust, or housing organization. (3) Require the recordation of a deed restriction, which shall run with the land, shall be filed with the permitting agency, and shall include both of the following:

    The word at issue is 'Notwithstanding' which modifies the first section in light of the next. So not only are local municipalities not allowed to require OO on an ADU, based on this section they may allow JADUs but are required to require OO on a JADU.

    I'd be happy to be discuss an alternate interpretation on these sections...I'm not an attorney, so I'm sure there are some legal vocabulary and context type discussions that can be had here. But this is my understanding of these sections and what they mean. 

    2Reply
  • Pavan Sandhu
    Developer · Sacramento, CA · Member since 2016 · 464 posts · 143 votes
    6y

    @Benjamin Lenz ADUS will put a serious dent in homelessness if adopted state wide properly.

    2Reply
  • Account Closed
    San Jose, CA · Member since 2015 · 4k+ posts · 3k+ votes
    6y
    Originally posted by @Matt Devincenzo:

    @Brett Goldsmith Sure it's a two step process first read the main portion, and then the subsection with guidance specific to JADUs. @Account Closed mentioned the same removal of OO requirement you did, and really the understanding comes down to a definition of one word.

    65852.2(a) (6) (B) Notwithstanding subparagraph (A), a local agency shall not impose an owner-occupant requirement on an accessory dwelling unit permitted between January 1, 2020, to January 1, 2025, during which time the local agency was prohibited from imposing an owner-occupant requirement.

    This section is from the general discussion of ADU/JADUs and their application ect. but you'll notice the prohibition from requiring OO is specific to the ADU. Elsewhere in this section and other they reference ADU/JADU, but here they do not. Following that is this section below:

    65852.22. (a) Notwithstanding Section 65852.2, a local agency may, by ordinance, provide for the creation of junior accessory dwelling units in single-family residential zones. The ordinance may require a permit to be obtained for the creation of a junior accessory dwelling unit, and shall do all of the following: (1) Limit the number of junior accessory dwelling units to one per residential lot zoned for singlefamily residences with a single-family residence already built built, or proposed to be built, on the lot. (2) Require owner-occupancy in the single-family residence in which the junior accessory dwelling unit will be permitted. The owner may reside in either the remaining portion of the structure or the newly created junior accessory dwelling unit. Owner-occupancy shall not be required if the owner is another governmental agency, land trust, or housing organization. (3) Require the recordation of a deed restriction, which shall run with the land, shall be filed with the permitting agency, and shall include both of the following:

    The word at issue is 'Notwithstanding' which modifies the first section in light of the next. So not only are local municipalities not allowed to require OO on an ADU, based on this section they may allow JADUs but are required to require OO on a JADU.

    I'd be happy to be discuss an alternate interpretation on these sections...I'm not an attorney, so I'm sure there are some legal vocabulary and context type discussions that can be had here. But this is my understanding of these sections and what they mean. 

     My mistake. I apologize.  For anyone looking at this stuff, I found this website on the CA government website on this stuff here: 

    https://www.hcd.ca.gov/policy-research/AccessoryDwellingUnits.shtml

    This is so confusing and frustrating.  The main website says the state wants ADUs and JADUs to be built and that the state has removed restrictions, but then when you look at the actual code, there are restrictions for owner-occupied for JADUs.  What a mess.

    4Reply
  • Douglas Wright
    Member since 2020 · 3 posts · 1 vote
    6y

    Does this Law only affect the Jr ADU's. I am doing my due diligence to add an additional unit to a property here in California and the city planner said if it zoned R1 you can have up to 4 units.

    She also said that it cannot exceed 1200 sqft. So I could do 2 600 sqft ADU's and make it a Fourplex or 1 ADU that is 1200sqft and have a triplex.

    What would be better?

    1Reply
  • Benjamin Lenz
    OP
    Realtor · Walnut Creek, CA · Member since 2017 · 39 posts · 18 votes
    6y
    Originally posted by @Pavan Sandhu:

    @Benjamin Lenz ADUS will put a serious dent in homelessness if adopted state wide properly.

     I agree with you, Pavan.

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free