Accessory Dwelling Units (ADUs): Recent State Laws And Local Ordinances In Response To The Housing Crisis

It is undeniable that there is (and long has been) a housing supply and affordability crisis in California.  According to the California Department of Housing and Community Development, “in the last decade, less than half of the homes needed to keep up with the population growth were built.  Additionally, new homes are often constructed away from job-rich areas.  This lack of housing that meets people’s needs is impacting affordability and causing average housing costs, particularly for renters in California, to rise significantly.”  The housing shortage has only been exacerbated by the COVID-19 pandemic, with housing prices increasing and inventory falling even more over the past year and a half.  Additionally, the more frequent and severe wildfires in the state constrain where new housing can and should be built.

In the past few years the California legislature has enacted a slew of legislation in response to the worsening housing crisis.  Some of the recent legislation includes changes to landlord-tenant laws such as the Tenant Protection Act of 2019 and the COVID-19 Tenant Relief Act, and changes to zoning and land use laws intended to increase the affordable housing supply in the state.  This article will focus specifically on recent legislation regarding Accessory Dwelling Units (ADUs), which are independent housing units built on residential properties with existing single- or multi-family homes (think in-law units or granny flats).  According to the California legislature, ADUs “offer lower cost housing to meet the needs of existing and future residents within existing neighborhoods” and are “an essential component of California’s housing supply.”

The recent push for more ADUs in the state took off in 2017 when the California legislature enacted laws that required local jurisdictions to adopt ordinances allowing ADUs of various types and sizes in all zones permitting single family residences.  The 2017 state laws also required vastly simplified permitting processes for ADUs.  The County and City of Santa Barbara and the City of Goleta enacted ADU components to their zoning ordinances in 2018 implementing these new state requirements.  The 2018 local ADU ordinances included various development standards for ADUs, such as a maximum floor areas, nominal architectural review, parking requirements depending on location, and front, side, and rear yard setbacks.

Following the enactment of the 2017 state ADU laws, some state legislators became impatient with what they perceived as a lack of cooperation by some municipalities with enabling the construction of ADUs.  So, in 2019 the California legislature adopted five new bills that made it even easier to develop ADUs.  These bills, which went into effect on January 1, 2020, further limited fees and restrictions on building new ADUs, streamlined approval processes, eliminated minimum lot size requirements and certain replacement parking requirements, and allowed for ADUs to be added in multi-family dwellings, among other things.

The several enactments governing the development of ADUs are now codified in Government Code § 65852.2.  This section distinguishes between ADUs that are entirely exempt from local development standards and ADUs that are subject to limited local development standards.  The state legislature also enacted Government Code § 65852.22 authorizing a subcategory of ADUs called junior ADUs that are limited to 500 square feet in floor area and must be located within an existing or new single family dwelling or attached garage.

Following the 2020 ADU laws, the County and City of Santa Barbara and the City of Goleta determined that their year old ADU ordinances were now null and void.  The respective Planning and Development Departments prepared replacement ADU zoning ordinance provisions, each of which are now in effect.

The relevant Government Code sections and the local ordinance provisions create multiple categories and subcategories of ADUs.  To say that all of these distinctions and their consequences are totally confusing would be an understatement.  One could review Government Code § 65852.2 half a dozen times and find some new twist every time.  One could also read any of the dozens of online articles and blogs summarizing the new ADU laws and notice the omission of important details.   

It would be nearly impossible for one to memorize all the ins and outs of the various types of ADUs, so this article will summarize some of the distinctions that are worth knowing about for attorneys and property owners in Santa Barbara County.  For those who want to dive deeper into the depths of ADU regulation, the County and City of Santa Barbara’s websites contain useful ADU resources, as does the California Department of Housing and Community Development’s online ADU Handbook.

ADUs can be categorized in different, sometimes overlapping ways.  One is physical location in relation to the main house on the property.  Some ADUs are entirely within the principal dwelling.  This might include separate quarters in the basement of an existing house, for example.  Other “attached” ADUs are located within new structures connected to the primary dwelling.  Finally, “detached” ADUs are located within structures entirely unconnected to the main house.

Another way of categorizing ADUs is by how they are built.  An ADU “conversion” utilizes space in an existing building.  The existing building might be the principal dwelling or it might be some other existing accessory structure like a barn, guesthouse, cabaña or garage.  “New construction” ADUs on the other hand are located in new buildings.

Still another useful way of classifying ADUs is by whether they fit the exemption in Government Code § 65852.2 from local development standards.  If they do fit the exemption, only the extremely limited development standards in Section 65852.2 apply.  If ADUs do not qualify for the exemption, then development standards in the jurisdiction where the ADU is located will apply.

A final way for categorizing ADUs is by the zoning for the lot on which an ADU is to be located.  Lots zoned for multi-family dwellings such as apartments or duplexes have their own development standards under Section 65852.2 for the addition of new, detached ADUs or the conversion of existing space in multi-family dwellings not currently used as liveable space.  Some zoning designations, such as those for agricultural properties, allow the construction of houses but are not zoned exclusively for single family dwellings.  Lots in those zones are not eligible to be treated as exempt from local development standards under state law.  ADUs on lots zoned exclusively for single family dwellings are exempt from local development standards if the ADUs meet the criteria for exemption under Section 65852.2.

The consequences for how an ADU is categorized can be important.  Just what exact category an ADU falls into will determine how big it can be, how close to neighboring property lines it can sit, and whether it can be used as a rental, among other things.  Many property owners will consider these to be negative features of an ADU that can cause it to interfere with the general peace and quiet of adjoining neighbors, ruin their views, and even reduce their property values.

For example, a new construction detached ADU limited to 16 feet tall and to 800 square feet of floor area is exempt under Section 65852.2 from local development standards.  That means it can be built on any lot where the applicable zoning is for single family residences.  It may be rented out separately from the principal residence, as long as the rental term is longer than 30 days.  It requires no additional parking spaces.  It is subject to the usual front yard setback but can be placed as close as four feet to the side and rear property lines.  It can be on the same lot where a garage or part of the main house has been converted into a junior ADU lot.  This could result in three different families, including renters, on what would otherwise be considered a single family lot.

For another example, an ADU conversion in a lot where the applicable zoning is for single family residences is also exempt under Section 65852.2 from local development standards.  This may be the conversion of space in an existing or proposed principal dwelling or the conversion of a separate existing accessory structure.  Exempt ADU conversions must have exterior access separate from the principal dwelling.  This kind of exempt ADU is limited in height and floor area only by the size of the principal dwelling or existing accessory structure it is located in.  No additional parking is required.  No replacement parking is required for parking lost from the conversion of garage space.  Like exempt new construction detached ADUs, exempt ADU conversions may be rented out separately from the primary dwelling as long as the rental term is longer than 30 days.  The only setback exempt ADU conversions are subject to under the County zoning ordinance is the applicable front yard setback.  The only side or rear setback requirements under Section 65852.2 for exempt ADU conversions are whatever is sufficient for fire and safety.  Like exempt new construction detached ADUs, exempt ADU conversions may be located on the same property as a junior ADU.  This could also result in three different families, including renters, on what would otherwise be considered a single family lot.

Homeowners concerned with ADUs in their neighborhoods, however, will need to accept the proliferation of ADUs as it appears the recent legislation has made an immediate and significant impact on the number of ADUs being built in California.  According to the UC Berkeley Terner Center for Housing Innovation, ADU permits in the state increased from almost 6,000 in 2018 to almost 16,000 in 2019.  ADU completions more than tripled during that time from 2,000 to almost 7,000.

Although ADU construction has increased across the state, significant barriers to building ADUs still exist.  Building an ADU is prohibitively expensive for many Californians.  ADU construction data suggests the average cost to build an ADU in California is $167,000.  Financing for ADUs is difficult to secure, and most low- and middle-income homeowners don’t have the cash on hand to build an ADU.  The high costs of construction and lack of financing have resulted in more ADUs being built in higher income areas where there is less need for affordable housing.  Given the recent push for ADUs at the state level, it will be interesting to see whether additional laws are passed to tackle these barriers.