Accessory Dwelling Unit (ADU)

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Accessory Dwelling Unit (ADU)

State legislation that took effect January 1, 2017 gave California cities more flexibility and latitude for allowing homeowners to build Accessory Dwelling Units (ADUs). Last year, the number of building permits for accessory-dwelling units jumped by 63 percent, according to Attom Data Solutions, an Irvine-based real estate data company.

Overview

An Accessory Dwelling Unit (ADU) is defined as a residential dwelling unit that provides complete independent living facilities for one or more persons, including sleeping, cooking, and sanitation. ADUs can be detached (a separate building in a backyard), attached to or part of the primary residence, or a garage conversion.

These housing units (also referred to as backyard homes, secondary units, garage apartments, in-law units, or granny flats) provide housing for family members, students, the elderly, in-home health care providers, the disabled, and others, at below market prices within existing neighborhoods.

However, some cities may have different restrictions than others.

Checking for Eligibility

Every neighborhood in California falls under specific zones. To build an ADU, your current house must be located in a residential zone, and most likely in a single-family or multi-family residential zone. Any lot in these zones, regardless of its size, can add an ADU if it will fit. Lot must have an existing house, only one ADU per lot is permitted, and the ADU cannot be sold separately from the house. An ADU must meet additional site requirements as well as building construction requirements of the local agency – Dept. of City Planning or the Dept. of Building and Safety.

  • Financing options are available for accessory dwelling units.

    If you’re thinking about financing an ADU or buying an investment property with an ADU – we can share our experience and expertise to guide you through the loan process and help get your loan funded. Hanover MC offers ADU loans for construction, conversion, acquisitions and working capital. Call us today at 1-800-300-8450 or request a no obligation quote to turn your plans into action.

Is Manufactured Housing Permitted as an ADU?

Yes, an ADU is any residential dwelling unit with independent facilities and permanent provisions for living, sleeping, eating, cooking and sanitation. An ADU includes an efficiency unit (Health and Safety Code Section 17958.1) and a manufactured home (Health and Safety Code Section 18007).

Health and Safety Code Section 18007(a) “Manufactured home,” for the purposes of this part, means a structure that was constructed on or after June 15, 1976, is transportable in one or more sections, is eight body feet or more in width, or 40 body feet or more in length, in the traveling mode, or, when erected on site, is 320 or more square feet, is built on a permanent chassis and designed to be used as a single-family dwelling with or without a foundation when connected to the required utilities, and includes the plumbing, heating, air conditioning, and electrical systems contained therein. “Manufactured home” includes any structure that meets all the requirements of this paragraph except the size requirements and with respect to which the manufacturer voluntarily files a certification and complies with the standards established under the National Manufactured Housing Construction and Safety Act of 1974 (42 U.S.C., Sec. 5401, and following).

Parking

SB 1069 reduces parking requirements to one space per bedroom or unit. The legislation authorizes off street parking to be tandem or in setback areas unless specific findings such as fire and life safety conditions are made. SB 1069 also prohibits parking requirements if the ADU meets any of the following:

  • Is within a half mile from public transit.
  • Is within an architecturally and historically significant historic district.
  • Is part of an existing primary residence or an existing accessory structure.
  • Is in an area where on-street parking permits are required, but not offered to the occupant of the ADU.
  • Is located within one block of a car share area.

SB 831 is a follow-up to SB 1069

Since the passage of SB 1069 and approval by the Governor on 09-27-16, Accessory Dwelling Units (ADUs) are gaining in popularity. And while this housing type is cheaper and quicker to build than a single-family home, the excessive fees and regulatory hurdles associated with ADU’s has been a serious deterrent to construction.

A bill intended to boost the construction of accessory-dwelling units has passed the state Senate and now heads to the Assembly.

Among other things, SB 831 would:

  • Eliminate some exorbitant development fees for accessory dwelling units.
  • Create an amnesty program that would ease the process of permitting pre-existing, unpermitted accessory-dwelling unit.
  • Hold local agencies accountable for approving these units through existing laws such as the Housing Accountability Act, which requires local governments to make specific findings if they deny housing.
  • Deem an accessory-dwelling unit permit application automatically approved if a local agency has not acted upon the application within 60 days.

UPDATE to SB 831

A reader was kind enough to inform me that this bill died in committee. Upon further research, I learned that the official status of the bill was ‘held in committee without recomendation’, 06-27-18, but not sure if that meant the effort was dead or has a chance at being revived. As such, I reached out to this bill’s author, Senator Weickowski, for comment on the future of SB 831 and have included his remarks below.

This bill is dead for this 2017-2018 session.

“Unfortunately, although SB 831 passed the Senate, it was held in the Assembly Local Government Committee and will not be moving forward.

“I see the committee’s vote as a temporary setback for further streamlining the process to allow homeowners to build accessory dwelling units.

“I will continue to advocate for reducing fees, supporting ADU amnesty programs to bring unpermitted units up to code, and for making it easier for homeowners to be part of the solution to our overall housing crisis.

“The movement to develop more ADUs will continue and I remain committed to this worthy cause.”

Senator Bob Wieckowski (D-Fremont).

Other Requirements

An ADU that conforms to this law shall be deemed to be residential use consistent with the existing general plan, and zoning, density and anti-growth requirements. This ADU law, however, does not supersede any restrictions imposed by the California Coastal Act, except that public hearings for coastal development permit applications for ADUs are not required.

Property Tax Reassessment

Under existing law, new construction or an addition to an existing home can trigger reassessment for property tax purposes. For more information, visit the California Board of Equalization website at https://www.boe.ca.gov/proptaxes/newconstructionproperty.htm

Conclusion

No matter what you call them, ADUs are an innovative, affordable, effective option for adding much-needed housing in California.

By |2018-08-09T06:59:16+00:00July 18th, 2018|Categories: General|Tags: , , , |4 Comments

About the Author:

G. David Lapin is the president and Broker of Record of HanoverMC, a private money lending and trust deed investment firm located in Orange County, California and is an author and speaker on the topic of private money lending and trust deed investing. Lapin was most recently featured in Robert Irwin’s book “Armchair Real Estate Investor” and hosted his own radio show “The Hard Money Hour”. Lapin's professional career in real estate encompasses 30 years of entrepreneurial experience in both the commercial and residential sectors, bridging property management, development, construction, investment sales and finance including residential mortgage banking and brokerage - originating, processing and closing 5,000 + purchase & refinance transactions, and the underwriting and funding of private money transactions.

4 Comments

  1. Frank Spencer July 18, 2018 at 2:24 pm - Reply

    Thank you. This was a very interesting article. I appreciate that you shared it with me.

    • G. David Lapin July 18, 2018 at 3:40 pm - Reply

      Hello Frank. You are welcome. I appreicate your feedback and hope it was of value to you.

  2. The Godfather of granny flats July 20, 2018 at 10:02 am - Reply

    Might want to remove the info on sb831, since it died in committee a couple weeks ago

    • G. David Lapin August 8, 2018 at 5:37 am - Reply

      Hello Jared. Sorry for the delay in getting back to you regarding SB 831 and thank you for bringing this to my attention. I reached out to this bills author, Senator Weickowski, for comment on the future of SB 831 and have updated this post with his remarks.

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