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...

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

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.

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).

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.

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.

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.

@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.

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.

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.

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

Benjamin Lenz

OP

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

6y

Originally posted by @Douglas Wright:

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?

Hi Douglas. There are now state laws that in CA that protect ADUs from owner-occupancy restrictions for 5 years if I'm not mistaken. The state is encouraging homeowners to build extra legal units which will increase housing for renters. The state also for whatever reason (see thread of comments) did not extend this to Jr. ADUs shut I'm not sure if some local jurisdictions have opted out of this to allow for Jr. ADU rentals without owner occupancy. I would check it out with your planning dept. As far as your strategy you want to move forward with, I would recommend find out exactly what's allowed for your parcel, and then strategize based on your local market. For example, if you're in a killer school district and there's a high median income, it's possible that a 1200 sq. Ft dwelling could command more income, but you're going to have to make a decision based on your specific location and situation. Hope this helps!

1 Reply

Will BarnardPro Member

Moderator

Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes

6y

Originally posted by @Douglas Wright:

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?

That is not correct. You can not build 4 units on a single family zoned property in CA. Under the new laws as of this year, you can have the single family home, an ADU and a JADU for a max total of 3 units. In a multi family property, you may add up to 2 quantity ADU units to the existing multi family lot.

Any and all ADU's can only be up to 1200 SF - that part is accurate except for the junior ADU which maxes out at 500 SF

Podcast Guest on Show #130

2 Reply

Kristy Fe

Member since 2020 · 1 post · 2 votes

6y

Originally posted by @Colin L.:

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.

You could be fined if caught though. BTW, I recently learned that if the house is owned by a trust, then the beneficiaries could satisfy the OO mandate to serve as owners if they reside there. So parents with grown children would probably "enjoy" a slightly relaxed OO, if one of your children could take advantage of one of the units.Another rule I have not seen anyone mention is that the JADU is not permitted to be rented short term (< 30 days). I find these restrictions too much of a burden to follow. If they really wish to solve the housing issues, this is really not helping.

2 Reply

Benjamin Lenz

OP

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

6y

@Bob Friedman thanks for writing. I don't have any recommendations because I haven't proceeded with an ADU project yet. The home I own in Walnut Creek has an existing ADU which I live in, and I wanted to convert my garage into an additional studio unit. I wrote this post because the jr. ADU just didn't make sense to me as an investment due to the laws associated with them. I would be really curious to hear updates on what you've come up with for your ADU project as I do hope to acquire another SFH within the next year and add an ADU to the home. From my own basic research it appears that many of the ADU companies have lenders they work with, but I don't know that those would be the more creative or favorable terms out there. I wish you much success with your project!

0 Reply

Benjamin Lenz

OP

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

6y

@Bob Friedman oh that's great I'll have to get in touch when I'm ready to start my ADU project!

0 Reply

Jeremy Williams

Lender · Sacramento, CA · Member since 2013 · 84 posts · 10 votes

6y

Originally posted by @Bob Friedman:

Thanks, @Benjamin Lenz, we are actually builders of ADUs (Tech Prefab Inc. - based in Santa Clara) so I am always looking out for best options for my clients. Happy to keep you informed of what we find re: optimized financial structures. - Robert

@Bob Friedman Are you shipping/building in Sacramento? We have new zoning rules that allow an entire third unit on one of my lots. I'm looking to either do a 3rd unit or a 3rd unit + attached ADU.

1 Reply

Daniel Hoghoughi

Los Angeles, CA · Member since 2020 · 5 posts · 4 votes

6y

I'm currently in the JADU + ADU process myself in the San Fernando Valley. Just submitted plans w/ my architect to the city and we are currently going through corrections.

In LA you sign a covenant with the city that you will not short term rent out the JADU and that you, the owner, will either live in the main house or the JADU. If you dig deeper though there is a stipulation in AB 2046 that says if the property is apart of a land trust you are exempt from owner occupancy. 👌

2 Reply

Account Closed

San Fernando, CA · Member since 2016 · 25 posts · 9 votes

6y

@Daniel Hoghoughi

Quick question .... what city in San Fernando Valley ? And how much are your estimated costs ? I’m looking into doing this myself...thank you !

0 Reply

Paul DashevskyPro Member

Investor · Los Angeles · Member since 2020 · 152 posts · 60 votes

6y

@Account Closed Our contractors have built ADUs & JADUs in the valley. Garage conversions are generally $50-100k. New build ADUs are running $250-350 per square foot. Keep in mind for new ADUs, they are required to have solar as well, adding to the cost. Also, keeping the ADU under 750sf means the city cannot charge you impact fees like parpk fees, sewer fees, school fees, etc.

1 Reply

Daniel Hoghoughi

Los Angeles, CA · Member since 2020 · 5 posts · 4 votes

6y

@Ismael Martinez

Hi Ismael. I’m in the city of West Hills.

For my new construction ADU i'm going to contract it out myself and am estimating to spend 80k.

For the JADU, it only needs minor upgrading since it’s already a master bedroom and bathroom. I only have to add a kitchenette and some windows. Hoping to stay within 20k for the JADU.

2 Reply

Benjamin Lenz

OP

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

6y

Originally posted by @Daniel Hoghoughi:

I'm currently in the JADU + ADU process myself in the San Fernando Valley. Just submitted plans w/ my architect to the city and we are currently going through corrections.

In LA you sign a covenant with the city that you will not short term rent out the JADU and that you, the owner, will either live in the main house or the JADU. If you dig deeper though there is a stipulation in AB 2046 that says if the property is apart of a land trust you are exempt from owner occupancy. 👌

This is great info Daniel! Thank you for sharing. Unfortunately my residence does not fall into any of these categories.

0 Reply

Bruce Umeck

Valencia, CA · Member since 2016 · 15 posts · 3 votes

6y

I want to thank Benjamin and all the others who have posted on this topic. My take away from this is to build now . I am in the process of plot plans/design with the San Fernando Bldg dept

just getting some budget numbers to start up building in the next 2 months. Has anybody got any pricing for their project ? ( not sure if you can ask for budget $ just want to compare pricing)

Thank you for all your input.

Bruce

dept lso what have you folks built out your

3 Reply

Account Closed

San Fernando, CA · Member since 2016 · 25 posts · 9 votes

6y

@Bruce Umeck

Has it been difficult to deal with the San Fernando bldg dept ? Have you dealt with the permitting process already ? How are the costs ? Is it a garage conversion ?

0 Reply

Bruce Umeck

Valencia, CA · Member since 2016 · 15 posts · 3 votes

6y

Just getting started ..........right now comparing if i want to add a separate water meter and electric meter to the property. the City building dept so far is very helpful and don't seem to be too busy.

Do you have a property in San Fernando?

0 Reply

Account Closed

San Fernando, CA · Member since 2016 · 25 posts · 9 votes

6y

@Bruce Umeck

Its my parents property...I've been looking into the possibility of buying the property from them and building an ADU...but because its family......its complicated....

0 Reply

Paul DashevskyPro Member

Investor · Los Angeles · Member since 2020 · 152 posts · 60 votes

6y

If you're planning on building an ADU or JADU 'yourself', my suggestion is to make sure you have some previous knowledge of construction and also make sure you know good sub-contractors in the following trades: electrical, plumbing, foundation, roofing, framing, drywall/paint, stucco, tile, cabinetry, flooring, HVAC, concrete, etc.

The last thing you want is poor quality work that has to be re-done because a handyman or the wrong tradesman did the work. I've seen tile work done by a handyman and its not pretty. The other risk is that when something goes wrong, each sub-contractor will say it was someone else's fault...or they cant start their part of the job until someone else finishes something else. Bottom line...be mentally prepared to play project manager, which can sometimes be a stressful experience.

1 Reply

Jason Gettler

Contractor · Huntington Beach, CA · Member since 2019 · 32 posts · 29 votes

5y

Little late to the thread but running into the issues now with OO for a JADU in Long Beach. If you go to the bottom and click "zoning policy" a pdf will download with all of the requirements. Although the plan checkers in Long Beach need to study the code a little more, the requirements are pretty straight forward. Had a plan checker tell me I can build 2 ADU's on a R-2 zone since it's multifamily. Turns out a duplex is considered a single family when it comes to ADU's. So we can only build one ADU and a JADU if I plan to live there.

http://www.longbeach.gov/lbds/...

1 Reply

Randall Demary

Woodland, CA · Member since 2021 · 18 posts · 5 votes

5y

So I'm late to, but here are some thoughts that haven’t been covered yet– there’s potential for a couple of strategies if you are willing to owner occupy (at least for a while) and expect to stay put for a time. My wife and I are in the Sacramento area and buying a new construction home that has a JADU already as part of the plan. These are actually the new BIG thing in new construction. Check out this link to a floorplan by Lennar, one of the country's biggest builders.

https://www.lennar.com/new-hom...

People are drawn to the flexibility of JADU floor-plans as they can use the space for all sorts of things: home office suite; room for an older teen; adult child living at home; In-Law unit; Airbnb; home gym; rental... You get the idea.

So investing. For a rental, there are lots of advantages to ADUs, and doing both a Jr and a detached let you double up. Pay property taxes for one property instead of three, same with city services, and lots of other things too.

Yes, if you rent a JADU, you’ll have to owner occupy. At least for a time. But if you want to make the most out of your residence as an investment, building both units is a great way to do it. When you want to move, you have two choices:

1) Sell. As stated above, homes with JADU plans are very popular and increase the value, probably more than an ADU in that there are lots of threads with folks having trouble getting the assessment to properly value the ADU. A JADU can be treated as just another wing of the house and included in square footage, etc.

2) Keep renting! You can always rent the main residence and the JADU together and also rent the ADU. Sure, it won't bring in as much as if you could rent all three, but it leaves you options.

As for OO requirement, it does have some upsides and ways to off-set the down. OO means you can easily manage the property yourself. You can keep an eye on things just by doing your normal routines. Also, you're likely to get better tenants as they know that having you there means they won't be able to throw frat parties every other day. As for privacy, with the right property, you can easily put up fences, hedges, etc that make each unit more like any other neighbor than a roommate. I definitely wouldn't be trying my hand at this otherwise!

1 Reply

Pavan Sandhu

Developer · Sacramento, CA · Member since 2016 · 464 posts · 143 votes

5y

@Douglas Wright you should be able to add 2 ADU's but yes all the local planning people will do is confuse you.

1 Reply

Mike Birdwell

Member since 2022 · 8 posts · 1 vote

4y

It’s commonly said that with a JADU you would have to evict the renter before you could move. I wish it was that simple.

This is what I was told by LA county: “Renting does not define a JADU, but it’s more about whether the property owner resides on the property.”

“If you wish to move away from your property built with a JADU but still retains ownership of the property, the JADU can no longer exist. You would need new approvals from Regional Planning and Building & Safety for the re-conversion to meet applicable single-family residential development standards under Title 22 (Zoning) of the County Code.”

I asked to see the actual covenant document but was given only sample language. I would be given the document to sign when I submit costly plans and it would be recorded on my title after completion.

So it’s a title restriction that could lower the value of the property. Could limit access to favorable loans and insurance on a new primary residence in the future. The new Rent Registry requirement needs to be considered with this as well.

I spent months searching for the logic with the owner occupancy requirement. The most logical was if the owner rents out both units and one tenant locks out the other from a common bathroom it would be trouble.

Allyn Polancic was the first to echo this logic. For me, I would not have a shared bath and the units would be separated by a locked door (Locked from both sides). I just can’t imagine a tenant having access to my home and a shared bath. For me, I may need to relocate to fully retire or may want to travel after retirement but always want a place to come back to. May need a caregiver living on the property in the future. To convert back would take costly new permits and removing an external stairway and door. Not a simple task as HDC suggests.

I have written every lawmaker I could to amend this ordinance, I urge all to do the same.

0 Reply

Zambricki Li

Real Estate Agent · Los Angeles CA + Lake Tahoe, NV and CA · Member since 2021 · 180 posts · 158 votes

4y

I've done multiple ADU's in CA and have 2 in process( one is a triplex turning into a 4 plex). You can get clearances to get past square footage and other things that pop up. You need to push back and work with someone who will push back at the local level. I think it's worth building the extra unit and they will likely roll back the owner occupy regulation at some point if it is even something they enforce now. The cashflow is worth it as you already own the property so the numbers should work easily compared to acquiring a new property in the area. It's almost easier to compare a JR adu to buying a condo than other asset classes. You could get it done for around 35-50k there's not a condo in CA for that price.

0 Reply

Henry T.

Member since 2022 · 1k+ posts · 1k+ votes

4y

I'm enjoying this discussion. Quite informative. When I first bought my house the property taxes were $250/yr, now theyre $11,000. I'm considering putting in an ADU to simply pay my property taxes. The way it appears to me, I'm being forced to become a landlord. Why doesn't the government put up rows of affordable apartments to solve this housing problem? I think the answer is, (especially in this anti-landlord climate), you'd have to be crazy to be a landlord. The government knows this more than anyone else. But, if I want to continue living where I've been for almost 40 years I'm gonna have to adapt and be an ADU landlord. If my tenant is a jerk, I'm afraid the stress will kill me before old age. LOL! And on a side note, if you're in an area that is zoned for ADU, your property taxes will eventually reflect that best use value whether you have an ADU or not. You can't win.

0 Reply

Dan H.Pro Member

Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes

4y

Quote from @Henry T.:

I'm enjoying this discussion. Quite informative. When I first bought my house the property taxes were $250/yr, now theyre $11,000. I'm considering putting in an ADU to simply pay my property taxes. The way it appears to me, I'm being forced to become a landlord. Why doesn't the government put up rows of affordable apartments to solve this housing problem? I think the answer is, (especially in this anti-landlord climate), you'd have to be crazy to be a landlord. The government knows this more than anyone else. But, if I want to continue living where I've been for almost 40 years I'm gonna have to adapt and be an ADU landlord. If my tenant is a jerk, I'm afraid the stress will kill me before old age. LOL! And on a side note, if you're in an area that is zoned for ADU, your property taxes will eventually reflect that best use value whether you have an ADU or not. You can't win.

if you were at $250 and now $11k then you are not in California or you did a substantial value add.

In California the property tax increase is limited to 2% per year after purchase except for additions, etc. The property tax cannot increase more than his even if the property value increases 5 times (I have properties that have increased 500% that have property tax based on values that are less than 1/3 of their current value).

As for a jurisdiction mandating converting a JADU back to SFR upon owner move out I believe this is outside the jurisdiction's authority. The JADU bill states to rent the other unit from the JADU conversion (either the initial residence or the JADU) requires owner occupancy in the other unit. It does not state the JADU has to be converted back to SFR. I question also if you are permitted to rent both to a single tenant.

I recommend contacting HCD regarding the jurisdiction’s desire to mandate that you remove the JADU at owner move out.

Good luck

1 Reply

Mike Birdwell

Member since 2022 · 8 posts · 1 vote

4y

Quote from @Dan H.:

Quote from @Henry T.:

I'm enjoying this discussion. Quite informative. When I first bought my house the property taxes were $250/yr, now theyre $11,000. I'm considering putting in an ADU to simply pay my property taxes. The way it appears to me, I'm being forced to become a landlord. Why doesn't the government put up rows of affordable apartments to solve this housing problem? I think the answer is, (especially in this anti-landlord climate), you'd have to be crazy to be a landlord. The government knows this more than anyone else. But, if I want to continue living where I've been for almost 40 years I'm gonna have to adapt and be an ADU landlord. If my tenant is a jerk, I'm afraid the stress will kill me before old age. LOL! And on a side note, if you're in an area that is zoned for ADU, your property taxes will eventually reflect that best use value whether you have an ADU or not. You can't win.

if you were at $250 and now $11k then you are not in California or you did a substantial value add.

In California the property tax increase is limited to 2% per year after purchase except for additions, etc. The property tax cannot increase more than his even if the property value increases 5 times (I have properties that have increased 500% that have property tax based on values that are less than 1/3 of their current value).

As for a jurisdiction mandating converting a JADU back to SFR upon owner move out I believe this is outside the jurisdiction's authority. The JADU bill states to rent the other unit from the JADU conversion (either the initial residence or the JADU) requires owner occupancy in the other unit. It does not state the JADU has to be converted back to SFR. I question also if you are permitted to rent both to a single tenant.

I recommend contacting HCD regarding the jurisdiction’s desire to mandate that you remove the JADU at owner move out.

Good luck

Dan,

I did have a pleasant phone conversation with the HCD. The representative didn’t have the answers to my questions of how it will work if I must relocate for work or want to travel. Legally you could not buy a new primary residence. You can’t be an investor with four properties with JADU’s because you can’t live at all four properties. It was suggested that I get a lawyer. I see a lot of misinformation on JADU’s from all sides, I try not to contribute to that. Even the HCD literature differs from the law because it is not a “simple reconversion” by unlocking a door and the OOR requiring new approvals. I first read the literature in a reasonable light from my perspective. When I asked Reginal planning for their interpretation it became clear the ordinance is unreasonable for a homeowner.

I started looking for the reason why it was written with the OOR. Only thing I came up with was the shared bath where one tenant locks out the other and the owner is not there to be held accountable. From my perspective all new ADU owners will become professional landlords and I don't think Mon and Pop know what they are getting into specially with a shared bath. But I understand ADU's started with the OOR so shared bath wouldn't apply there? That leaves not wanting investors buying up R1 neighborhood's and living elsewhere. But why remove it from ADU's and not JADU's, It's my assumption that when writing the law they assumed that JADU fell under ADU's, but when Regional Planning reads it they are different. That's my guess.

Dan below is more complete text from my questions and answers from Regional Planning

Is it only a JADU if it is rented? If not rented as a JADU would it be implied that I am proposing to not have a JADU so I could rent out the SFR and move?

I do not completely understand your questions. Renting does not define a JADU, but it’s more about whether the property owner resides on the property. The owner is allowed to reside in the JADU and rent out the main residence or vice versa. If you wish to use the entire property as a rental property one day, you should not have a JADU. You should choose the ADU option for your property. Please review our ADU Ordinance summary for more info on what is considered a JADU: https://planning.lacounty.gov/assets/upl/project/adu_ordinance-summary.pdf

Would I have to pull more permits modify the house to some requirement to remove the JADU from the property in order to rent it and move?

If you wish to move away from your property built with a JADU but still retains ownership of the property, the JADU can no longer exist. You would need new approvals from Regional Planning and Building & Safety for the re-conversion to meet applicable single-family residential development standards under Title 22 (Zoning) of the County Code.

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Dan H.Pro Member

Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes

4y

Quote from @Mike Birdwell:

Quote from @Dan H.:

Quote from @Henry T.:

I'm enjoying this discussion. Quite informative. When I first bought my house the property taxes were $250/yr, now theyre $11,000. I'm considering putting in an ADU to simply pay my property taxes. The way it appears to me, I'm being forced to become a landlord. Why doesn't the government put up rows of affordable apartments to solve this housing problem? I think the answer is, (especially in this anti-landlord climate), you'd have to be crazy to be a landlord. The government knows this more than anyone else. But, if I want to continue living where I've been for almost 40 years I'm gonna have to adapt and be an ADU landlord. If my tenant is a jerk, I'm afraid the stress will kill me before old age. LOL! And on a side note, if you're in an area that is zoned for ADU, your property taxes will eventually reflect that best use value whether you have an ADU or not. You can't win.

if you were at $250 and now $11k then you are not in California or you did a substantial value add.

In California the property tax increase is limited to 2% per year after purchase except for additions, etc. The property tax cannot increase more than his even if the property value increases 5 times (I have properties that have increased 500% that have property tax based on values that are less than 1/3 of their current value).

As for a jurisdiction mandating converting a JADU back to SFR upon owner move out I believe this is outside the jurisdiction's authority. The JADU bill states to rent the other unit from the JADU conversion (either the initial residence or the JADU) requires owner occupancy in the other unit. It does not state the JADU has to be converted back to SFR. I question also if you are permitted to rent both to a single tenant.

I recommend contacting HCD regarding the jurisdiction’s desire to mandate that you remove the JADU at owner move out.

Good luck

Dan,

I did have a pleasant phone conversation with the HCD. The representative didn’t have the answers to my questions of how it will work if I must relocate for work or want to travel. Legally you could not buy a new primary residence. You can’t be an investor with four properties with JADU’s because you can’t live at all four properties. It was suggested that I get a lawyer. I see a lot of misinformation on JADU’s from all sides, I try not to contribute to that. Even the HCD literature differs from the law because it is not a “simple reconversion” by unlocking a door and the OOR requiring new approvals. I first read the literature in a reasonable light from my perspective. When I asked Reginal planning for their interpretation it became clear the ordinance is unreasonable for a homeowner.

I started looking for the reason why it was written with the OOR. Only thing I came up with was the shared bath where one tenant locks out the other and the owner is not there to be held accountable. From my perspective all new ADU owners will become professional landlords and I don't think Mon and Pop know what they are getting into specially with a shared bath. But I understand ADU's started with the OOR so shared bath wouldn't apply there? That leaves not wanting investors buying up R1 neighborhood's and living elsewhere. But why remove it from ADU's and not JADU's, It's my assumption that when writing the law they assumed that JADU fell under ADU's, but when Regional Planning reads it they are different. That's my guess.

Dan below is more complete text from my questions and answers from Regional Planning

Is it only a JADU if it is rented? If not rented as a JADU would it be implied that I am proposing to not have a JADU so I could rent out the SFR and move?

I do not completely understand your questions. Renting does not define a JADU, but it’s more about whether the property owner resides on the property. The owner is allowed to reside in the JADU and rent out the main residence or vice versa. If you wish to use the entire property as a rental property one day, you should not have a JADU. You should choose the ADU option for your property. Please review our ADU Ordinance summary for more info on what is considered a JADU: https://planning.lacounty.gov/assets/upl/project/adu_ordinance-summary.pdf

Would I have to pull more permits modify the house to some requirement to remove the JADU from the property in order to rent it and move?

If you wish to move away from your property built with a JADU but still retains ownership of the property, the JADU can no longer exist. You would need new approvals from Regional Planning and Building & Safety for the re-conversion to meet applicable single-family residential development standards under Title 22 (Zoning) of the County Code.

I have read the state JADU bill multiple times and it is clear owner occupancy is required to rent the JADU or primary residence It does not state JADU has to be removed when owner is not occupying. However, it would not make sense to leave it vacant. However what if it was a secondary home? You would not rent it out. You would use it occasionally.

I have some disappointment at the ability of HCD to enforce the rules. I have heard of jurisdictions charging fees for ADUs less than 750’. HCD sent letter stating that was not allowed. Jurisdiction ignored the letter and continues to collect school impact fees (of course they do not call it impact fee).

I suspect the owner occupied requirement will be removed at some point. Initially ADUs had an owner occupied requirement to rent. Until then JADUs are typically a terrible investment.

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

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

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