While campaigning for Governor, Gavin Newsom pledged to build 3.5 million new units by 2025 to combat California’s housing crisis. One way to meet this ambitious goal is through the construction of accessory dwelling units (“ADUs”). Since 2017, California lawmakers have passed several bills to streamline the ADU approval process. However, exorbitant fees and strict local requirements in some cities have continued to hinder the development of new ADUs. In response, Governor Newsom recently signed into law five bills that aim to further remove local barriers to ADU development, as well as to incentivize owners of both single-family and multi-family homes to add much-needed additional units to their properties.
AB 68 & AB 881 – Streamlining ADU Approvals
AB 68 and AB 881, introduced by Assemblymembers Philip Ting and Richard Bloom, were consolidated and enacted as one bill because the fundamental goal of the two bills was essentially the same—to streamline and improve the ADU process in order to facilitate the development and construction of ADUs. Effective January 1, 2020 these bills will:
- Require permits for ADUs and junior ADUs added to existing single-family and multi-family homes to be ministerially approved or denied within 60 days, rather than the 120 days allotted by existing law;
- Allow the approval of ADUs in proposed housing to be delayed until the new construction is approved, but the ADU permit must still be issued ministerially;
- Allow cities and counties to establish minimum and maximum ADU size requirements, provided that the maximum floor area is not less than 850 square feet or 1,000 square feet if the ADU has more than one bedroom;
- Prohibit any lot coverage, floor area ratio, open space, and minimum lot size requirements that would impact or deny ADU production; and
- Prohibit municipalities from requiring that existing nonconforming zoning conditions be corrected as a condition for ADU permit approval.
Perhaps most importantly, subject to certain requirements, the consolidated bill will require ministerial approval for projects in residential and mixed-use zoning districts that propose to create the following:
- One ADU (attached or detached) and one junior ADU on a lot with either an existing or proposed single-family home;
- Multiple ADUs within an existing multi-family building; or
- Up to two detached ADUs on a lot with an existing multi-family building.
Note that if a garage is converted or demolished to construct a new ADU, the off-street parking spaces do not have to be replaced. Furthermore municipalities will be prohibited from enforcing parking standards for ADUs located within ½ mile of public transit.
SB 13 – Owner Occupancy and Fees
Similar to the consolidated bill made up of AB 68 and AB 881, SB 13 prohibits the enforcement of parking standards for ADUs within ½ mile of public transit, requires ministerial approval of ADU permits within 60 days, and allows the construction of ADUs in garages and detached accessory structures. However, SB 13, introduced by Senator Bob Wieckowski, goes a step further by tackling two key issues: (1) the owner-occupancy requirement and (2) expensive fees.
First, as a condition of approval, local agencies can currently require that an applicant for an ADU permit occupy either the primary residence or the proposed ADU. Until January 1, 2025, SB 13 will exempt all ADUs from such owner-occupancy requirements.
Second, one of the biggest barriers to constructing ADUs in California are the fees associated with getting them approved and developed. To further incentivize owners to construct ADUs, SB 13 will implement a tiered fee structure based on the ADU’s size and location. Specifically, no impact fees can be imposed on ADUs smaller than 750 square feet, and any impact fees assessed for larger ADUs must be proportional to the square footage of the primary residence.
AB 670 & AB 671 – HOA and General Plans
Finally, AB 670 prevents homeowners’ associations from banning or unreasonably restricting the construction of ADUs on single-family residential lots. Meanwhile, AB 671 will require local General Plan housing elements to incentivize and promote the construction of affordable ADUs that can be rented to very low, low, and moderate-income households. The California Department of Housing and Community Development must also draft a list of “existing state grants and financial incentives” for ADU owners and developers by December 31, 2020.
Together, this package of ADU laws hope to ease local restrictions in order to incentivize the development of “affordable by design” ADUs. In the midst of California’s housing shortage, it remains to be seen what impacts these bills will have on ADU construction when they take effect next year.
Authored by Reuben, Junius & Rose, LLP Attorney Tiffany Kats
The issues discussed in this update are not intended to be legal advice and no attorney-client relationship is established with the recipient. Readers should consult with legal counsel before relying on any of the information contained herein. Reuben, Junius & Rose, LLP is a full service real estate law firm. We specialize in land use, development and entitlement law. We also provide a wide range of transactional services, including leasing, acquisitions and sales, formation of limited liability companies and other entities, lending/workout assistance, subdivision and condominium work.
