ADU’s Could Soon be Sold Separately from Homes

Photo provided by Office of Assemblymemeber Phil Ting

A series of Accessory Dwelling Unit Bills have been sent to Governor Gavin Newsom for signature in an effort to add more housing to California.

Under AB 1033, if signed by Governor Newsom, ADU’s could be sold separately from homes as long as a local authorizes it. For AB 1033 to be triggered, a local agency would first have to create an ordinance

Existing law, notwithstanding the prohibition described above, requires a local agency to allow an accessory dwelling unit to be sold or conveyed separately from the primary residence to a qualified buyer if certain conditions are met, including that the property was built or developed by a qualified nonprofit corporation and that the property is held pursuant to a recorded tenancy in common agreement that meets specified requirements.

This bill would, in addition, authorize a local agency to adopt a local ordinance to allow the separate conveyance of the primary dwelling unit and accessory dwelling unit or units as condominiums, as specified, and would make conforming changes.

Under AB 976, it removes a state law that requires an ADU to be owner-occupied. This passed the State Assembly in a 60-3 vote. Meanwhile, it passed the Senate in a 22-9 vote.

Existing law authorizes a local agency to require an accessory dwelling unit to be used for rentals of terms longer than 30 days.

This bill, instead, would authorize a local agency to require terms that are 30 days or longer.

Existing law, beginning January 1, 2025, authorizes a local agency to impose an owner-occupancy requirement on an accessory dwelling unit, provided that the accessory dwelling unit was not permitted between January 1, 2020, and January 1, 2025.

This bill would instead prohibit a local agency from imposing an owner-occupancy requirement on any accessory dwelling unit.

Here is what Ting released Monday:

A “backyard revolution” is underway in California, thanks to the policy and budget actions taken by the state Legislature in recent years on Accessory Dwelling Units (ADUs) – affordable housing more commonly known as backyard cottages, granny flats or in-law units. They are now poised to play an even great role in easing these state’s housing shortage.

In SB 104, a budget bill now headed to the Governor, there’s an additional $25 million for the highly successful ADU Grant Program, which provides approved homeowners with up to $40,000 in pre-development costs like design and site prep. This funding would complement the $100 million allocated last year and could result in up to 2,500 new ADUs. But these funds were exhausted within months because of demand.

“California needs more housing. ADUs can be built quickly and fit into existing neighborhoods,” said Assembly Budget Chair Phil Ting (D-San Francisco). “Homeowners can be part of the solution. Their family can live nearby or rental income can generated, while providing some housing relief in their communities.”

Ting also has three ADU bills pending this session:

  • AB 932: Directs CalHFA to explore ADU financing options to create more housing and report back to the Legislature by 2025; signed by the Governor on September 8, 2023.
  • AB 976: Removes requirement that ADUs be owner-occupied; sent to the Governor today.
  • AB 1033: Allows ADUs to be sold separately as condominiums, opening the door to affordable homeownership; sent to the Governor today.

“California’s leadership on ADUs is crucial for homeowners who cannot achieve their ADU dreams alone. The Casita Coalition is proud to partner with legislative leaders by sponsoring bills that promote greater financing options and policies for homeowners, families, and critical workers. This collaboration leads to more and better housing choices. We want to express our appreciation to Assemblymember Ting for his generational leadership on ADU bills and for defending the ADU Grant Program,” said Denise Pinkston, President of The Casita Coalition.

Ting hopes this year’s actions build on his 2019 legislation, AB 68, which has made it easier and faster to build an ADU. It was among a group of laws that expedite the permit approval process, allow for larger units, ease parking requirements, and reduce fees. These efforts are credited with starting an ADU construction boom.

The Governor has until October 14th to act on all bills sent to his office this week.

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