Quote from @Benjamin Lenz:
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...
When reading through the CA Code, as one does in their free time, there is an interesting line that could be helpful for other investors in this situation. See the bolded line below:
ARTICLE 2. Adoption of Regulations [65850 - 65863.13]
( Article 2 added by Stats. 1965, Ch. 1880. )
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 single-family residences with a single-family residence 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.
I am not offering legal or investment advice or advising on how to hold title or manage assets. But theoretically, if one placed their property in a land trust, the code seems to indicate that they would not be required to occupy any units.
If one decided they wanted to put a property in a land trust, they would probably want to seek legal council and determine if and how that may affect current or future financing.
Just an idea to look into.
