California Paves Way for More ADUs

As part of its response to California’s housing crisis, the Legislature passed a handful of new laws that further limit local regulation of accessory dwelling units, or ADUs. The Legislature’s goal is to accelerate ADU development throughout the State. Historically, an ADU is usually a second small residence on the same grounds as a single-family home, such as a back house or an apartment over a garage.

AB 881, SB 13 and AB 68[1]
More Locations

State law now clearly prohibits a city from requiring a minimum lot size.
ADUs are now allowed on lots with multifamily dwellings (not just single-family dwellings).
The no-setback rule is expanded beyond just nonconforming garages to include any existing structure, or any new structure in the same place and with the same dimensions as an existing structure.
The most a city may require for a side or rear setback is now 4 feet.
Before, the adequacy of water and sewer services and ADU impact on traffic flow and public safety were just examples of reasons that might justify a city in restricting ADUs in a certain area. Now, they’re the only allowed reasons, and cities must consult with utility providers before deciding that water and sewer services are inadequate.

Fewer Opportunities to Regulate Size

Minimum size must be 220 square feet, or as low as 150 square feet if the city has adopted a lower efficiency-unit standard by local ordinance.
Maximum size must be at least 850 square feet for attached and detached studio and one-bedroom ADUs and at least 1,000 square feet for two or more bedrooms. In practice, an ADU might be limited to less than these minimum maximums by the application of development standards, such as lot coverage and floor-area ration. But another new provision prohibits the application of any standard that wouldn’t allow for at least an 800‑square foot, 16-foot tall ADU with 4-foot side and rear setbacks.
Converted ADUs may now include an expansion of the existing structure of up to 150 square feet for ingress and egress.
Attached ADUs are no longer limited to 1,200 square feet — just 50 percent of the existing primary dwelling.

Less Parking

Cities may no longer require replacement parking when a garage is converted to an ADU.
A city cannot require ADU parking within a 1/2 mile of public transit. State law now clarifies that “public transit” includes any bus stop, which may considerably expand parking-exempt areas for many cities.

More Limited Review

Whether or not a city has a compliant ADU ordinance, it must ministerially approve a compliant ADU, and now a junior ADU as well, within 60 days of receiving a complete application — a decrease from 120 days. But the city must extend that time if an applicant requests it. Cities may charge a fee to recover review costs.
Any new primary dwelling that requires a discretionary review may still be subjected to the normal discretionary process, and consideration of an ADU on the same lot may be delayed until the primary dwelling is approved. But the ADU decision must remain ministerial.
Cities now have to approve new detached ADUs with only a building permit (as they do for converted ADUs), without applying any standard except for 4-foot setbacks, an 800-square foot max and a 16-foot height limit.
Cities may not require correction of physical nonconforming zoning conditions for an ADU or junior ADU.

Multiple ADUs and Multifamily

Cities must now allow both a junior ADU and either a converted ADU or a detached building-permit-only ADU on the same lot.
A city must now allow junior ADUs even if the city doesn’t have an ADU ordinance, in which case it may only impose the few standards in state law.
Cities must now allow multiple converted ADUs on lots with a multifamily dwelling.
Cities must now allow up to two detached ADUs on lots with a multifamily dwelling, subject only to a 16-foot height limit and 4-foot setback.

More Limited Fees

Utility providers are now more limited in whether and how they can charge connection fees and capacity charges.
Impact fees are prohibited for ADUs smaller than 750 square feet. They’re allowed for large ADUs, but only proportional to the primary dwelling.

No Owner-occupancy

All ADUs are exempt from owner-occupancy requirements until Jan. 1, 2025. Cities may then impose occupancy requirements, but only to ADUs created after that date.

No Short-term

Cities may no longer allow short-term rentals of ADUs.

Heavier Consequences for Cities

Now, a local ADU ordinance is null and void if it does not fully comply with whatever the current state law requires — not just with the 2017 amendments (which was previously the case). So cities will have to proactively conform their ordinances before changes in state law take effect or continually risk voiding their entire local ordinance.
Cities are more accountable now to the California Department of Housing Community Development for confirming their local ordinances to the state ADU law, and HCD may refer a violation to the Attorney General.

AB 671 and AB 139[2]
Housing elements must now promote ADUs for affordable rent. HCD must provide financial incentives.

Every general plan housing element must now include, as part of its program to make adequate provision for the housing needs of all economic segments of the community, a “plan that incentivizes and promotes the creation of [ADUs] that can be offered at affordable rent … for very low, low, and moderate-income households.” For its part, HCD is charged with developing “a list of existing state grants and financial incentives” for ADU developers and operators by the end of 2020.

In practice, cities and counties will likely need to not only discuss their ADU ordinance and report on ADU development in their housing elements, but also report on what they are doing to promote affordable rental of those ADUs. The upside is that affordable ADUs may count toward fulfilling regional housing needs allocations, also known as RHNA, requirements.

AB 670
Home Owner Associations are now limited like local agencies in restricting ADUs.

State law has limited local agencies in restricting ADUs for a while now, but hasn’t addressed private restrictions such as HOA Covenant, Conditions & Restrictions, or CC&Rs. AB 670 makes any governing HOA document void and unenforceable to the extent that it prohibits, or effectively prohibits, the construction or use of ADUs or junior ADUs. AB 670 does permit an HOA to place “reasonable restrictions” on ADUs and junior ADUs in common interest developments, as long as the restrictions do not discourage ADU or junior ADU construction or unreasonably increase the cost to construct them. (Like cities, HOAs are bound to disagree with ADU proponents over what those standards mean in practice.) The new law does not define what sort of “restrictions” are “reasonable,” but the bill does not require an HOA to follow the same exact standards that the city or county has adopted, leaving open the possibility that the HOA might still have its own “reasonable restrictions” that differ from those of the local agency.

While HOA regulation of ADUs is not directly a local agency’s business, it is helpful for cities and counties to keep this in mind since they receive complaints from time to time from residents concerned about government approval of uses that violate CC&Rs.

AB 587
Separate sale or conveyance of ADUs is now okay in limited situations.

State law generally prohibits local ADU ordinances from allowing ADUs to be sold or otherwise conveyed separately from the primary dwelling. But AB 587 creates a limited exception by allowing (though not requiring) cities to adopt ordinances authorizing ADUs to be conveyed separately from the primary dwelling if certain conditions are met. These conditions include, among others, that the property was built by a qualified nonprofit, there is an enforceable restriction on the use of the land between the nonprofit and qualified low-income buyer and the property is held in a tenancy-in-common agreement that:

gives the low-income buyer an undivided, unequal interest in the property based on the size of the dwelling,
gives the nonprofit a right of first refusal to buy back the property if the buyer wishes to sell,
requires the buyer to occupy the residence as his or her principal residence, and
contains affordability restrictions on the sale or conveyance of the property ensuring that the property will remain low-income housing for at least 45 years.

This new, narrow exception appears to be a concession aimed at a particular project or model.

Note that this exception is not automatic. The local agency must choose to provide it, and it will likely be of only limited interest to most jurisdictions where there is no qualified nonprofit ready to proceed under this model.

The Bottom Line
Nearly every — if not every — city and county in the state will need to amend its ADU ordinance in time to take effect before Jan. 1, or the ordinance will be void and the agency will have to approve ADUs ministerially without applying any architectural, landscaping, zoning or development standard.

With California’s housing shortage reaching crisis levels, the state Legislature and Gov. Gavin Newsom approved a slew of new bills this session aimed at helping the situation. Using a mix of carrots and sticks, these laws will change how cities and counties address housing shortages in their own communities. Watch for more Legal Alerts analyzing the new laws and how they impact your agency.

Also in BB&K’s Housing Series:

If you have any questions about new ADU laws and how they may impact your agency, please contact the authors of this Legal Alert listed to the right in the firm’s Municipal Law practice group, or your BB&K attorney.

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Disclaimer: BB&K Legal Alerts are not intended as legal advice. Additional facts or future developments may affect subjects contained herein. Seek the advice of an attorney before acting or relying upon any information in this communiqué.

[1] “When, during a calendar year, two or more bills amending the same code section become law, the bill enacted last (with a higher chapter number) becomes law and prevails over (‘chapters out’) the code section in the bill or bills previously enacted. Chaptering out can be prevented with the adoption of ‘double jointing’ amendments.” (Cal. State Legisl. Glossary, s.v. chaptering out.) AB 68 was “double-jointed” with AB 881 and SB 13, and AB 881 was enacted last, so sections 1.5 and 2.5 of AB 881 are the operative provisions resulting from the passage of all three bills in the order in which they were enacted.

[2] AB 671 and AB 139 were double-jointed bills. Section 1.5 of AB 671 governs because it was enacted last.