Big Boost for Small Solutions to Housing Crisis
Governor Newsom signs three bills that make it easier to build ADUs

An Accessory Dwelling Unit in a Sacramento back yard.

October 10, 2019: As we pointed out in June, Accessory Dwelling Units (ADUs) are an inexpensive and environmentally friendly way to boost housing. 

The small secondary units on residential lots, also known as granny flats, carriage houses, in-law units, or backyard cabins, provide more affordable housing in existing communities without changing the existing fabric of residential neighborhoods. They can meet the needs of low- to moderate-income families without the need for public subsidy.  

Given that about three-fourths of the SACOG region’s homes are single family houses, ADUs could provide a viable avenue to increase the naturally affordable housing stock in the region.

Since many single-family neighborhoods lack affordable rental stock, ADUs can also fill a critical housing gap in high-opportunity areas.  

On October 9, Governor Gavin Newsom signed three bills — AB 68, AB 881, and SB 13 — that together will universally guarantee homeowners the right to build an 800 sq. feet ADU with 4 feet setbacks and 16 feet height on any residential lot, regardless of lot coverage, floor area ratio, or other local requirements. Local governments would need to approve applications within 60 days using a non-discretionary review process, meaning that as long as the application meets the objective requirements, the application must be approved.  

In addition, cities can no longer impose owner-occupancy requirements, which require the owner to live in one of the units in order to rent out the other unit. Fees, which in some cities run as high as $35,000 per ADU, will also be eliminated for ADUs under 750 sq. feet. 

California has made tremendous progress in establishing standards for local regulations governing ADUs over the last three years. In some parts of the State, the results have been staggering. Los Angeles, for example, went from 50 ADU applications in 2015 to over 2,000 in 2017. However, barriers like owner occupancy requirements, excessive parking requirements, minimum lot size, setbacks, and maximum floor area still render ADUs in some cities infeasible or prohibitively expensive. The SACOG Housing Policy Toolkit discusses many of these barriers and what can be done about them in greater detail. 

These bills will require local governments to amend their ADU ordinances to comply with the changes above. Otherwise, potential ADU builders will be able to be approved using the statewide standards. Fortunately, there are resources available to help jurisdictions pay for these policy changes. SB 2 Planning Grants, for which applications are due in November 2019, provide over $7 million in guaranteed funding for policy changes that accelerate the production of housing. Changes to ADU ordinances are highlighted as a priority policy area in the program guidelines. In addition, the Governor’s Budget passed in 2019 provides an additional $7 million in guaranteed funding for similar activities. Applications for these funds are due in July 2020.  

These funding sources provide a unique opportunity for local governments to explore new and exciting policy changes that can make a dent in the housing crisis. ADUs are not a magic bullet but they can make a difference.  In addition, jurisdictions can count future ADU construction towards accommodating their Regional Housing Allocation (RHNA) in their housing elements, provided regulatory barriers are removed. For more information on the new requirements or the available housing planning funding, please email Dov Kadin. 

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