Update on ADU Legislation

Keith B. DunnaganToday we look at the legislative updates related to granny flats. It is no secret that California is in the midst of a housing shortage crisis. The only way that shortage will be dealt with is encouraging construction through legislative reform. One of those reforms that needs to be addressed is related to the construction of ADUs.

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Update on ADU Legislation

By: D. Keith B. Dunnagan, Esq.

Green and Brown HouseLast year we wrote about SB 831, a bill proposed for the purpose of streamlining the approval of accessory dwelling units (ADU) also known as granny flats. While that bill did pass the California senate with overwhelming support it died in committee in assembly. It is no secret that housing and rent prices continue to rise in California and that is driven in large part because of the shortage of housing supply in California. This year there has been renewed work in addressing the housing crisis through changes in the law related to ADUs. Three such bills have been introduced and they include; SB 13 which like SB 831 was introduced by Sen. Wiechowski, AB 68 introduced by Assembly member Ting and AB 881 introduced by Assembly member Bloom.

Each of these bills seeks to address the legal and regulatory hurdles related to the approval process related to granny flats. In some instances, the approval process is reduced to 60 days and if not acted upon creates an automatic approval mechanism. All the bills seek to remove the requirement that the ADU be limited only to single family dwellings, which in theory should open the door to the use of the ADU in multi-family property settings. In other instances the bill limits or prohibits the requirement that the property be owner occupied. This prohibition makes sense. If the state is facing a housing shortage and housing is needed, does it matter if the home or property is owner-occupied? It would seem that at some point the equities would tip in favor of the housing need rather than the occupancy status.

More significant changes that are addressed include the elimination or reduction of impact fees. It is no secret that permitting costs in California are some of the highest in the nation. The costs of permitting granny flats are in many cases economic barriers to construction. Even if someone wanted to legally construct a granny flat the prohibitive costs may prevent that construction. Another significant proposal is the 10-year amnesty program to allow out of compliance granny flats to be come compliant without penalty. Considering that it is estimated that there exist potentially some 200,000 illegal ADUs it is necessary to take steps to shape the law to encourage compliance.

Each of these bills contains beneficial components aimed at addressing the difficulties of legally constructing granny flats. They are not cure-alls to the housing shortage and the ailments that hamper construction in California. They are nonetheless steps in the right direction. In Gov. Newsom’s first budget proposal address he made construction of new housing units a central component of that address. That construction will not get off the ground without meaningful legislative reform that encourages construction. While these bills won’t close the shortage gap they are meaningful steps towards providing housing relief.

The attorneys of BPE Law Group, PC. have been advising our clients on real estate, business and estate planning issues for over 20 years and have assisted numerous clients in business and real estate matters and have represented and advised brokers on their professional obligations as well as consumers on their rights. If you have questions concerning legal matters, give us a call at (916) 966-2260 or e-mail Keith at kbdunnagan@bpelaw.com. Our flat fee consult for new clients may get you the answers you need for the questions you have.

The information presented in this Article is not to be taken as legal or tax advice. Every person’s situation is different. If you are facing a legal or tax issue of any kind, get competent legal and accounting advice in your State immediately so that you can determine your best options.