November 10th, 2023 9:52 AM by Narbik Karamian
Amazing news!
In 2020, amazing bills (SB 13, AB 68, AB 881) passed making it easier than ever to build Accessory Dwelling Units in California. These bills invalidated local ADU ordinances across the state and replaced them with state-mandated rules. They massively improved ADU regulations, and it feels like we’re reliving that moment all over again.
From height restrictions to setbacks, these are changes that are greatly improving homeowners’ experiences in building their dream ADUs.
Let’s walk through some of the Bills that passed in 2022 and the most important one that recently passed in October, 2023.
AB 2221 (January 2023)
We’ll start with the meatiest bill of the bunch, AB 2221. This is essentially a “clean-up” bill, meaning its main purpose is to clarify and define old legislation so that regulations are more clear-cut. But, that doesn’t mean it’s not a game-changer.
Cracking down on permitting agencies
One of the biggest regulations that came about from the landslide of changes in 2020 was the requirement that your city had to either approve or deny your permit application within 60 days.
Sounds like a nice idea, right? While this change was made with good intentions, it had an unsavory drawback. With cities facing immense pressure to pump out permits in a much shorter amount of time and incoming permit applications exponentially growing, a lot of planning departments resorted to just denying applications when their time ran out.
Once a lot of homeowners and designers caught wind of what cities were doing, they eased back on the pressure and just accepted that it was better to wait a bit longer than the 60 days than have their application rejected and have to resubmit.
To help remedy the situation, AB 2221 now, if cities end up rejecting an application, they are required to provide ALL the reasons why your application was denied. And NOT just some reason! With this change, cities are now forced to review your application more carefully, rather than rejecting it for minor reasons and calling it a day.
Additionally, the language was changed from “local agencies” to “permitting agencies”, so now every entity that has to issue a permit for your project is held to this 60-day requirement, not just your local planning department.
Height restrictions defined
AB 2221 now requires all cities to allow at least a 16 ft height limit for ADUs. Cities can allow higher, but they cannot restrict you from building your ADU any lower.
What’s most interesting about this Bill is that there are added scenarios in which cities are required to allow you to build higher as well.
Front setbacks now fall under state exemptions
Front setbacks now fall under the list of restrictions that cannot be enforced if it prevents an ADU from being built if it is under 800 sq ft.
For example, floor area ratio and open space ratio also fall under these exemptions. If any of these regulations set by your city prevent you from building an ADU, they are not enforceable.
SB 897 (September 2022)
This is another “clean-up” bill and a lot of it overlaps with some of the others, so we’ll just cover some of the unique changes this bill brings up.
Unpermitted work is no problem
A lot of cities prohibit homeowners from building an ADU if they found any unpermitted work on the property. Often, bringing these errors up to code would take months, sometimes even years.
SB 897 eliminates that restriction unless the unpermitted work is a health or safety concern.
Demolition go!
It’s no surprise that there are some cities in California that still aren’t ADU-friendly. Although cities are required to issue building permits if all requirements are met, some cities found a loophole for garage conversions.
If you are tearing down your garage and building your ADU where that garage was (yes, this is still considered a garage conversion), cities could withhold the demolition permit.
Now, with SB 897, cities are required to issue the demolition permit if the ADU permit is issued. Under this new bill, you are also not required to post a public notice about the demolition.
Fire sprinklers?
Building an ADU will no longer trigger a group R occupancy change to your property. What does that mean?
It means that if you build an ADU, it will not trigger a requirement for fire sprinklers in the primary dwelling. We noticed this was a big annoyance for some of our clients in the past!
Honorable mention
We’re surprised this needed to be said. When you build a JADU (junior accessory dwelling unit) without a bathroom, the bathroom in the primary dwelling needs to be accessible to the JADU. SB 897 makes this more explicit.
AB 916 (September 2022)
While this bill isn’t ADU specific, it was originally drafted with ADUs in mind. Unfortunately, the ADU terminology language was removed after some controversy, but that doesn’t mean it’s not a great bill!
AB 916 allows you to convert an interior space within your primary dwelling into a bedroom without a public hearing.
This is great news for homeowners that are looking to increase the equity in their home. What does this mean for ADUs? Nothing at the moment, but we’re curious to see how this bill will improve over time.
AB 157 (September 2022)
We’ve all seen how beneficial the $40K CalHFA has been for so many homeowners. AB 157 is now requiring CalHFA to convene a working group to develop recommendations to assist homeowners in qualifying for loans to construct ADUs and JADUs on their property and to increase access to capital for homeowners interested in building ADUs.
Program Updates
10/26/2023 - The CalHFA Board of Directors approved final program details for the second round of ADU Grant funding at its October Board meeting. For this round, applicant income limits are 80% of the Area Median Income. Please see our list of Approved Participants; we anticipate the program being available for new reservations in early December, with the official program announcement coming in mid-November.
Source: Calhfa.ca.gov/adu
AB 1033 (passed October 11, 2023)
In recent years, cities across California have turned to backyards to increase housing stock. After pre-approving plans of architect designed accessory dwelling units (ADUs) in 2021, earlier this year, Los Angeles rolled out a free version to make it even easier to build a backyard home, whether as an in-law unit or rental.
On October 11, 2023, California passed legislation—Assembly Bill 1033—that now allows homeowners to sell an ADU built on their property, allowing them to leverage existing equity.
The bill requires cities to opt into the program. Property owners in participating cities will then be able to sell their ADU following the same rules as a condominium, namely that homeowners will need to notify utility providers and form a homeowner’s association for property maintenance. Taxes would be paid separately.
The legislation could be a major benefit to homeowners in the current high interest rate environment. Especially, fixed income families who often can’t afford to move, whether because of high interest rates or capital gains taxes incurred by selling a long-time home.
ADUs aren’t slowing down any time soon
We’re thrilled that ADUs have grown in popularity enough to warrant these positive changes.
Please contact us with any questions about ADU financing scenarios and options.