How Municipalities Can and Cannot Regulate ADUs

SAN FRANCISCO—On January 1, 2020, California expanded a previous 2017 law to allow every single-family homeowner to add both an accessory dwelling unit/ADU and a junior ADU, significantly limiting the municipal regulation of ADUs. As municipalities may not be fully aware of all of these recent changes or updated codes and procedures, applicants should become familiar with the codes to fully take advantage of the benefits when obtaining approvals for ADUs.

Matt Fogt and Angus Beverly, Allen Matkins attorneys, recently shared insights into how municipalities can and cannot regulate ADUs.

GlobeSt.com: How do recent changes to California state law affect local agencies’ ability to regulate ADUs?

Fogt: These laws significantly limit a municipality’s ability to regulate ADUs, to the advantage of investors and homeowners. The most significant changes are that municipalities must process ADUs ministerially (no discretion and no CEQA) and administratively (no public hearing) within 60 days, and are prohibited from requiring owner-occupancy until January 1, 2025, which enables investors and multifamily owners to build ADUs for the first time.

GlobeSt.com: What is the motivation behind these changes to ADU regulation?

Beverly: The housing crisis and the need to get units through the approval process is the primary motivation for this unusual exemption from normal processes. ADUs are small in size, allow density in otherwise built-out communities, take advantage of existing utility capacity and provide a market solution for attainable housing (i.e., cheaper housing affordable to many without subsidies).

GlobeSt.com: How do these laws benefit single-family owners?

Fogt: For single-family areas, it is now permitted to add two ADUs─one detached new construction ADU and one junior ADU─to an existing lot. However, the junior ADU provision still requires owner-occupancy, so a true triplex is likely restricted to owner-occupants unless otherwise permitted by the jurisdiction.

If an ADU was built before January 1, 2020 and violates any local restrictions, the municipality is unable to enforce the violation for up to five years to give the owner time to bring the unit into compliance, unless enforcement is necessary to protect health and safety. Municipalities cannot require the correction of nonconforming zoning conditions elsewhere in the property as a condition to the approval of an ADU.

GlobeSt.com: What does the ADU application process currently look like and how has it changed with these new laws?

Fogt: Most municipalities have historically processed ADUs, if they even permitted them, like any other new construction, resulting in a lengthy and expensive process that rarely justified the effort. Municipalities can no longer deny ADUs except in limited circumstances and cannot force a proponent through a long drawn-out approval process with significant fees. The 60-day approval process, removal of discretion, CEQA, and public hearings and limits on parking and fees makes ADUs suddenly possible and feasible.

GlobeSt.com: What are the other key changes under the new laws? 

Beverly: One key change is that municipalities can no longer impose impact fees on an ADU less than 750 square feet, while all impact fees charged for ADUs 750 square feet or greater must be proportional to the primary dwelling unit. With respect to ADUs built within an existing single-family structure and not a new single-family home, local agencies, special districts and water cooperatives cannot require a separate utility connection.

Municipalities can also no longer require the replacement of parking when an existing garage, carport or covered parking is demolished or converted for the construction of an ADU. This change is critical as parking requirements often inhibited the creation of ADUs.

While parking requirements for ADUs are still generally one space per unit or bedroom (whichever is less), municipalities cannot impose parking requirements on an ADU if it is built within a half-mile walking distance of public transit, it is within an architecturally and historically significant historic district, it is part of a proposed or existing primary residence or accessory structure, on-street parking permits are required but not offered to the occupant of the ADU or a car share is located within one block of the ADU. The potential removal of parking requirements makes a lot of ADUs possible that would not otherwise pencil.

ADUs are also not subject to local regulations that limit residential growth, such as no growth initiatives. Municipalities may require only require public hearings if the ADU is in the coastal zone.

GlobeSt.com: With the lenient laws currently in place, what advice can you give to multifamily owners and investors at this time?

Beverly: The removal of the owner-occupant requirement only lasts until January 1, 2025, so this is a short window of opportunity for investors. However, there is ambiguity regarding junior ADUs. Laws appear to still allow municipalities to require owner-occupancy with respect to junior ADUs, so a true triplex may only be possible for owner-occupants and investors might be stuck with just a duplex.

For multifamily owners, there are two key opportunities: the conversion of portions of existing multifamily dwelling structures not currently used as living space to ADUs including laundry rooms, storage rooms, attics and garages, and the construction of up to two detached ADUs per each parcel that contains multifamily dwellings.

GlobeSt.com: What are the current size requirements for ADUs and what are the penalties for not following them?

Fogt: In previous years, many local ordinances put severe limits on ADU size based on lot size and other restrictions, which significantly limited its applicability. These new laws now restrict municipalities from establishing minimum square footage requirements that prohibit an efficiency unit or maximum square footage requirement of an ADU less than 850 square feet (1,000 square feet if the ADU has more than one bedroom). Additionally, municipalities may only impose other size requirements if they would not prohibit an ADU of at least 800 square feet, with at least 16 feet in height and a 4-foot setback.

No setback may be required for ADUs created within existing living areas or accessory structures or a new structure constructed in the same location with the same dimensions as an existing structure.  Municipalities also now cannot require ADU setbacks greater than 4 feet for detached ADUs.

ADUs attached to an existing dwelling structure cannot exceed 50% of the square footage of the existing structure. ADUs within an existing structure may include the expansion of up to 150 square feet to accommodate ingress and egress.

GlobeSt.com: Are there any additional issues of which homeowners should be aware?  

Beverly: Keep in mind that ADUs may be rented separately from the primary residence, but not for a term of less than 30 days so no nightly or weekly rentals, and ADUs cannot be separately sold or otherwise conveyed except to an affordable housing agency.