California Says Granny Flats Can Be Sold as Separate Units

California, which is leaving no stone unturned in its effort to encourage the growth of new housing, has enacted a new law that allows single-family homeowners who build a Granny Flat on their property to sell it as a separate unit.

Well, let’s say the Golden State sort of enacted this new incentive for its Granny Flat initiative. As in, metropolitan areas can opt out of the new law, which also directs Granny to start a homeowners’ association.

There are other permutations of the new law being worked out, like the pricing of Granny Flats that are built on single-family lots.

The optional new law, known as AB 1033 and signed by Gov. Gavin Newson in the middle of October, allows accessory dwellings to be sold separately and for lower prices than full-sized homes, presumably giving low- to moderate-income Californians a chance at home ownership.

Enacting AB 1033 is voluntary for all cities when it takes effect in January, meaning that cities like San Diego, which recently went through a municipal battle that saw the defeat of initiatives to change single-family housing zoning, can reject it.

Cities across California are looking to the Pacific Northwest for examples of cities that have enacted laws permitting sales of ADUs, a.k.a. Granny Flats, as separate units.

A monthly ADU sales report issued in Seattle earlier this year showed that the 15 units sold for significantly less than the traditional single-family house adjacent to it, but still at a premium price.

In one typical sale in Seattle, an ADU fetched $680K while the home in front sold for $1.2M.

It’s too early for sales data to be generated in California, but AB 1033 author, Phil Ting, who represents San Francisco in the State Assembly, said the bill envisions a scenario in which a homeowner “breaks off an ADU spot” for an adult child or close friend, who buys equity instead of spending money on rent.

According to a report in the San Diego Union-Tribune, there are some unique requirements in AB 1033, including the need for the homeowner and ADU owner to set up a homeowners’ association to cover the cost of shared spaces, such as a driveway, pool or shared roof.

We know what you’re thinking: what if Granny doesn’t want to pay for the driveway because you took the car keys away from her?

Maybe you should wait a couple of days to tell her she also has to pay her own property taxes on the Flat you built for her at the end of the driveway.