By: Aaron Norris
May 30, 2019 —
As housing costs soar, a California state legislator is working to make it easier for homeowners to build accessory dwelling units on their properties to provide residents with more affordable housing options.
Accessory dwelling units (ADUs) have gone by a wide variety of names: granny flats, in-law units and backyard cottages among them. They can serve a wide variety of uses such as a guesthouse for extended family, a home office, a short-term vacation rental or an apartment for a non-family member.
A bill from Sen. Bob Wieckowski (D-Fremont) to lower governmental fees charged to homeowners who want to build an ADU and to lessen the restrictions on how it can be used is now advancing to the California State Assembly after passing through the California Senate on May 22.
It is the latest of a multiyear effort by Wieckowski and other legislators to reform ordinances and permitting surrounding ADUs. California has seen nine different bills on accessory dwelling units in 2019.
“SB 13 will make it easier for California homeowners to convert their garage into a living space or construct a small accessory unit in their backyards to provide more housing for seniors, college students, teachers and other workers,” Wieckowski said in a prepared statement. “It is focused on the barriers that continue to hinder the construction of ADUs – excessive development impact fees, restrictive owner-occupancy requirements and no pathways to bring unpermitted units up to code.”
Out of California’s 482 cities, Wieckowski reports that only 200 have passed local ADU ordinances as of May 2019. Currently, if a city has not created a local ADU ordinance, the city code defaults to the language of SB 1069.
The need for additional regulation would prohibit cities from placing an untold number of restrictions into their ordinances, making the process of getting an ADU permit burdensome, expensive and, in some cities, nearly impossible.
One city, for example, was requiring a homeowner to have a lot size of at least 15,000 square feet, which is unusually large for most cities. Others were requiring extra off-street parking, charging thousands in impact fees, or letting the permit applications languish with no action. In cases where cities require owner-occupancy restrictions on title, cities are inadvertently even making lending more difficult.
A report by the University of California, Berkeley’s Terner Center of Housing Innovation says development fees are hampering the construction of ADUs as these small properties are often charged the same impact fees as new home construction. These impact fees can cost up to $50,000 in some cities.
SB 13 would require cities to send ordinances to the Community Housing Department for review. If the city is not compliant, the city must fix the issue or face being reported to the office of the Attorney General for violation of the law. Unlike previous bills, SB 13 attempts to give the state more teeth to force compliance.
The owner-occupancy change in SB 13 is a big win for real estate investors and landlords who are well positioned to take advantage of adding ADUs to projects and more likely to do so if the rules are clear, projects are timelier, and costs are reduced.
Investors doing fix and flips have the know-how, access to skilled labor and availability of private funding for projects. Renovating the primary residence and building an ADU simultaneously helps match the aesthetic of the home and the neighborhood which should go a long way to satisfy the city as well as NIMBYs not necessarily keen to additional neighbors. Higher sales prices will also increase local tax dollars.
Landlords have the most significant chance to impact housing if SB 13 passes. They have the same skills to see ADU projects added to existing inventory with the added benefit of being experienced property managers in a very tenant-friendly state. Landlords may have missed that SB 1069 allows ADUs on duplexes, triplexes and fourplexes.
If the recent lawsuit by the state of California against Huntington Beach is a sign of how serious California will be in the coming years on affordable housing, there’s no reason to think SB 13 and bills like it attempting to simplify the process and cost won’t succeed. ADUs are an effective option for adding much-needed, affordable housing. If California can push this through the process, other states will likely follow.