I am happy that California has passed a new law that eases restrictions on secondary units, effective January 1. When Portland did something similar, it sparked an ADU boom. Permitted ADU projects skyrocketed, and a cottage industry sprung up, including ADU designers, owner/developer consulting, ADU breakeven calculator. With our new law, I see opportunity to build: • zero step, accessible units for aging parents and retirees • micro-units for students (CSU Hayward, Berkeley) • ADU’s for millennial professionals who are still saving for down payment • garage conversions (I'm planning for this) I'd love to get your opinions: • Are you ADU’s as part of your strategy – househacking, flips, BRRRs? • How do you think the new regulations will impact real estate investing in the Bay Area? CA Granny unit law: Summary • no extra parking space required for ADU if it’s within ½ mile of a public transit stop, or part of an existing primary residence, or part of an existing accessory structure, or in an area requiring on-street parking permits • parking can be tandem on existing driveway • when a garage is demolished or an ADU and off-street parking spaces must be replaced, they can be anywhere on lot, including tandem • no set back required for a garage conversion; side/rear setback of 5 feet max for ADU above a garage • no extra utility, water or sewage hookup fees • detached ADU’s shall not exceed 1200 sq ft CA Granny Unit law: Background docs • bill text • legal brief

@Daniel Gonzalez, @Calvin Kwan is correct. The Accessory Dwelling Unit (ADU) guidelines are for single family homes - not duplexes. If you want to add another unit to a duplex, you need to have 3-unit zoning or get a variance (can be very difficult) Here is the language from the city as of May 12, 2017: "A "Secondary unit" (also known as “accessory dwelling unit,” “in-law unit”, or “granny flat”) is an attached or detached accessory dwelling unit that is located on the same lot as an existing One-Family Dwelling facility..." http://www2.oaklandnet.com/oakca1/groups/ceda/docu... I looked into it for the duplex I have in West Oakland. Let me know if you find anything different..

I think it only applies to SFHs. I looked into it briefly.

@Ryan Hopkins I’m reading and re-reading it, trying to wrap my head around it. According to an Oakland law firm’s summary of SB 1069, if a city imposes requirements beyond those in the new state law, those local provisions are preempted as of January 1, and only the new state standard may be enforced! And, If a city FAILS to adopt an ADU ordinance in accordance with state law, that city is required to approve an ADU application applying only the standards in the new state law! For example: I want to buy a property in Castro Valley and do a garage ADU conversion. Most of Castro Valley is zoned for ADUs. It’s an unincorporated area of Alameda County, so I talked to an Alameda County planner about a property I'm considering buying. He said I can build an ADU, but the county requires four independently accessible parking spots (i.e. they cannot be tandem). Well, there’s no way I can fit four spaces on that property : ( Similarly, an Oakland city planner told me that Oakland's parking requirements are the #1 ADU killer there. Enter the new law. Section 65852.2 states that: • parking requirements shall not exceed one parking space per unit • spaces may be provided as tandem parking on an existing driveway (yay! - all I need is a long driveway) • no setback is required for an existing garage that is converted to an ADU (yay!) Clearly, that’s a game-changer for anyone who wants to do a garage conversion. Alameda County’s parking requirements are NOT compliant with the new state law. The county attorney is wrestling with this right now. I can’t wait to see what the county submits to the state on January 1! No doubt, a lot will be hashed out in practice, and it may get contentious. For instance, Section 65852.2 says that cities can establish minimum and maximum size requirements for ADUs. But the law also says its intent is that local ADU ordinances don’t make unit size requirements “so arbitrary, excessive, or burdensome so as to unreasonably restrict the ability of homeowners to create ADUs in zones in which they are authorized by local ordinance.” How will that be interpreted and enforced? For instance, suppose the City of Fremont submits their revised ADU ordinance to the state on January 1, and keeps its 300 sq ft max. Would the state redline it as “burdensome” and require revision? Would a homeowner ultimately have to sue a city like Redlands if its ADU ordinance doesn’t comply with the new state standard? There’s a lot to think about here . . . and potential business opportunities for architects who understand the new state standard and specialize in ADUs. There's a lot of demand out there for ADUs. You mentioned the bill text applies only where there “are currently none.” Where are you seeing that in the bill text? Are you referring to paragraphs 3-5, which state that “existing law, when a local agency has not adopted an ordinance governing 2nd units as so described, requires the local agency to approve or disapprove the application ministerially, as provided [meaning: as provided in this new state law]. This bill would instead require the ordinance for the creation of accessory dwelling units to include the provisions described above [i.e. the new state law] . . . This bill would incorporate . . . changes in Section 65852.2 of the Government Code . . . on January 1, 2017.” Like the Oakland law firm, I read that to mean that cities must adhere to the new standards laid out in Section 65852.2, which is the meat of the new standards.

You can only add a ADU if you live there. So basic if you living there get a permit add the adu and the rent both out when it is done. They wont issue you one if you don't live there.

I live in Southern California and have a feeling adding ADU's will be huge. For the people in Portland or other area's that have already implemented the ADU in SFR what effects have you seen in your area? Have you seen values increase because of the potentially higher rental income? Or are there unintended consequences that doesnt meet the eye? I plan on adding ADU's to some of my rentals.

I was super excited about this new ADU law but I just got my city's adoption of the law and it is NOT friendly to ADUs. I live in Long Beach and the city requires either the primary dwelling or ADU be owner-occupied and it must be a recorded covenant attached to the property. The city requires a title report showing the covenant prior to issuing a building permit. The way I interpret this is the primary dwelling AND ADU can never both become rental units at the same time. Very restrictive and not good for future value of the property.

It'll screw with your future buyer's ability to get a normal mortgage, which in turn can ding value. I'd suggest looking into zoning/permits to make it a 3-unit property. Also, please call me when you have a moment.

Variances are also extremely difficult to get and are only granted in extraordinary circumstances. i called the city not too long ago to see if I can convert my duplex to a triplex. City basically said don't bother. I don't have the lot size required, even though I was just adding an additional front door and wall to divide a unit.

Updated almost 6 years ago on 12/23/2019. Most recent reply

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Marissa MyersPoster

Hayward, CA

California Real Estate Q&A Discussion Forum

Calif’s new granny unit law & ADU flips: is CA the next Portland?

Marissa MyersPoster

Hayward, CA

Posted October 30, 2016 11:24

I am happy that California has passed a new law that eases restrictions on secondary units, effective January 1. When Portland did something similar, it sparked an ADU boom. Permitted ADU projects skyrocketed, and a cottage industry sprung up, including ADU designers, owner/developer consulting, ADU breakeven calculator. With our new law, I see opportunity to build:

zero step, accessible units for aging parents and retirees
micro-units for students (CSU Hayward, Berkeley)
ADU's for millennial professionals who are still saving for down payment
garage conversions (I'm planning for this)

I'd love to get your opinions:

Are you ADU's as part of your strategy – househacking, flips, BRRRs?
How do you think the new regulations will impact real estate investing in the Bay Area?

CA Granny unit law: Summary

no extra parking space required for ADU if it's within ½ mile of a public transit stop, or part of an existing primary residence, or part of an existing accessory structure, or in an area requiring on-street parking permits
parking can be tandem on existing driveway
when a garage is demolished or an ADU and off-street parking spaces must be replaced, they can be anywhere on lot, including tandem
no set back required for a garage conversion; side/rear setback of 5 feet max for ADU above a garage
no extra utility, water or sewage hookup fees
detached ADU's shall not exceed 1200 sq ft

CA Granny Unit law: Background docs

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