Learn the most important things about the new ADU laws in California, from key legislation changes to most recent bills.

You might have noticed that ADUs are becoming very popular. Maybe a neighbor did a garage conversion recently, or a friend built a guest house for extended family. The fact is, more and more people are building ADUs, which is no surprise to us.

After all, these backyard homes:

• Give extra value to your property;
• Can be used as a source of rental income;
• Provide a flexible housing solution for your extended family.

And in light of the housing crisis, the State of California decided to simplify ADU building requirements. These new law changes encouraged thousands of California Homeowners to build an ADU.In fact, according to data from the Department of Housing and Community Development, the Building Departments across the state went from issuing around 9,000 ADU permits in 2018, to almost 12,400 in 2020 which is almost a 30% per year increase. To actively support ADU construction, California lawmakers continue to pass laws that are in favor of homeowners.Our guide will help you learn what’s new and improved in the housing and ADU world in California - from the most important changes made the past years, to the most relevant bills enacted in 2022.

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What qualifies as an ADU?

Before getting into legislation, let’s see what is considered to be an ADU in California.According to the ADU Handbook developed by the California Department of Housing and Community Development (HCD), ADUs are housing units with complete independent living facilities for one or more persons.

The handbook lists a few ADU variations:

• Detached ADU: A unit separated from the primary structure;
• Attached ADU: A Unit attached to the primary structure;
• Converted Existing Space: Space on the lot such as a garage or a storage area that is converted to an independent living unit;
• Junior Accessory Dwelling Unit (JADU): A specific type of conversion of existing space that is entirely contained into the single-family residence.

ADUs can vary in size and number of rooms too. And depending on these specifics, different rules may apply.

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Key ADU Law Changes

Some of the most important ADU laws were passed these past few years.

Bills such as AB 68 and AB 881 removed many restrictions imposed by local agencies and set rules that favor homeowners state-wide. We made a list of the most important changes brought by these laws that made building an ADU simpler and more affordable.

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You can add 2 more units on your property

Pre-existing laws permitted only one ADU per single-family lot. But under AB 68, municipalities are required to approve:

• For single-family lots: One ADU (attached or detached) up to 1200 sq ft and one JADU up to 500 sq ft.
• For multi-family lots: Multiple ADUs attached to the existing multifamily structures and two detached ADUs.

Owner occupancy is no longer required

If you want to build an ADU, you no longer need to live in the primary home or the ADU itself.This change will help landlords and investors build ADUs on their rental/investment properties in order to provide more housing opportunities.

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Eased requirements on size, lot and setback

Under the new laws, the state no longer allows municipalities to set limitations for minimum lot size, ADU lot coverage, floor area ratio and similar restrictions. Now you can build an ADU of at least 800 sf (square feet), 16 ft in height with a 4-foot side and rear yard setbacks.

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Smaller or no impact fees

Impact fees are fees imposed by local agencies that pay for the costs of providing public services (electricity, water, sewer etc.) to a new project/development. Under the new legislation, ADUs that are up to 750 sf are exempt from paying impact fees. For larger ADUs the fees are proportional and calculated based on the footage of the ADU and the primary dwelling unit.

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Shorter time for ADU permit approval

The local agency is now required to approve or deny your ADU permit application within 60 days after receiving it, which is half the time imposed by pre-existing laws.

Your ADU may be exempt from parking requirements

With the new laws, certain ADUs are exempt from parking requirements. These include:

• ADUs located within one-half mile walking distance of public transit or within one block of a car share vehicle;
• ADUs located within an architecturally and historically important district;
• ADUs that are part of the primary residence or another accessory structure;
• When on-street parking permits are required, but not offered to the ADU occupant.

And even if you don’t meet these criteria, parking requirements for ADUs cannot exceed one parking space per unit or bedroom (whichever is less). This can be provided as tandem parking on a driveway, while guest parking spaces cannot be required in any circumstances.

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HOA restrictions are overruled

After several bills were enacted in 2019 and 2020, local Homeowner Associations cannot unreasonably prohibit the construction or use of ADUs or JADUs. This includes renting or leasing an ADU on a lot that is zoned for single-family residential use.

So if you are facing any issues with your local HOA, you can reach out to HCD for guidance on how to resolve the issue.

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More financial aid options are available

Under these new laws, state and local agencies needed to develop a plan that incentivizes and promotes the creation of ADUsHCD developed a list of state grants and other financial incentives that will help the development of affordable ADUs.

Among these incentives is the $40,000 grant offered by CalHFA meant to cover some of the ADU development costs.

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Senate Bill 9 (SB9)

The most notable housing law that went into effect in 2022 is the Senate Bill 9 (SB9).There bill consists of 2 sections:

• Two-Unit Development, which enables California homeowners to build 2 housing units on their lot that is only zoned for 1 unit.
• Urban Lot Split, which allows for single-family residential lots to be split into 2 separate parcels and be treated as such.

This means that you can build up to 4 units on a lot that was traditionally meant for 1.SB9 units are different from ADUs, as they are considered as independent dwelling units, and not secondary to the primary house. So keep in mind that different rules will apply to SB9 units and ADUs.

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Upcoming ADU laws

Despite all of these changes, municipalities that aren’t so ADU friendly are still making it difficult for homeowners.

In fact, in a survey conducted by UC Berkeley Center for Community Innovation, 50% of respondents answered that they found it difficult to obtain an ADU permit and build their ADU to their jurisdiction development standards.To prevent this from happening, some of the new ADU bills are bringing changes that continue to streamline the administrative process.

There are 2 upcoming bills that will bring more benefits to homeowners when enacted - SB 897 and AB 2221.

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SB 897

Once passed, SB 897 will:

• Increase the height limit to 18ft for detached and 25ft for attached ADUs;
• Allow retroactive permitting for ADUs constructed before 2018;
• Clarify the limitations of local agencies that were set by previous ADU laws to avoid exploiting them.

“SB 897 is based on feedback my office and the Department of Housing and Community Development have heard from homeowners who still face obstacles. This bill reduces barriers and allows homeowners to make better use of their property.” - Senator Bob Wieckowski

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On the other hand, AB 2221 will bring the following benefits:

• Streamline the permitting process by setting up specific timeframes for local agencies to approve or deny a permit;
• Specify that a detached ADU may include an attached garage;
• Add front setbacks to the requirements that local agencies are prohibited from establishing.

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To ADU or Not to ADU

Given the increased support from the state, it is clear that ADUs are here to stay.

Even though some cities try to find ways around ADU legislation and discourage their development, it is safe to say that most of them are embracing backyard homes.

If you are still on the fence about whether to build an ADU, Dwelitto is always here to help. Check out how you can finance your ADU and see whether you qualify for CalHFA’s $40000 ADU grant.