Governor Newsom of California has recently signed a string of new laws aimed directly at the growing problem of housing costs. As Newsome recently said, “the high cost of housing and rent is putting the squeeze on family budgets, and our housing shortage threatens our economic growth and long-term prosperity.”
Since his election in January, Newsom’s administration has indeed taken several steps toward solving California’s housing affordability crisis. According to Newsom, “in 2019, California has taken urgent action to address this challenge. We’ve invested more in new housing than at any point in our history, and we have created powerful new tools to incentivize housing production. Now, we are removing some key local barriers to housing production. This crisis has been more than a half century in the making, and this Administration is just getting started on solutions.”
What is an ADU?
Much of the new legislation is directed at accessory dwelling units which may be a good solution to alleviate the rapidly rising cost of rent throughout the state. An accessory dwelling unit, or ADU, is a very straight forward and old idea. It is simply a second small dwelling on the same property as your existing home. This ADU can be freestanding or attached to your house; this covers everything from guesthouses in the backyard to an apartment over the garage. No matter what form it takes, an ADU is legally part of the same property as the main home. In addition, ADUs cannot be bought or sold separately from the home. Simply put, the owner of the ADU is the owner of the main home.
These are the bills Governor Newsom signed to eliminate barriers to building ADUs in California:
- AB 68 makes major changes to facilitate the development of more ADUs and address barriers to building. The bill reduces barriers to ADU approval and construction, which will increase production of these low-cost, energy-efficient units and add to California’s affordable housing supply.
- AB 881 removes impediments to ADU construction by restricting local jurisdictions’ permitting criteria, clarifying that ADUs must receive streamlined approval if constructed in existing garages and eliminating local agencies’ ability to require owner-occupancy for five years.
- AB 587 provides a narrow exemption for affordable housing organizations to sell deed-restricted land to eligible low-income homeowners.
- SB 13 creates a tiered fee structure which charges ADUs more fairly based on their size and location. The bill also addresses other barriers by lowering the application approval timeframe, creating an avenue to get unpermitted ADUs up to code, and enhancing an enforcement mechanism allowing the state to ensure that localities are following ADU statute.
- AB 671 requires local governments’ housing plans to encourage affordable ADU rentals and requires the state to develop a list of state grants and financial incentives for affordable ADUs.
In addition to targeting ADUs, Governor Newsom signed the nation’s strongest statewide renter protection package and a number of other bills to address the rising costs of rent and housing. The state budget, which he signed in June, made a historic $1.75 billion investment in new housing and created major incentives for cities to approve new home construction. The budget also provided $20 million for legal services for renters facing eviction, as well as $1 billion to help cities and counties fight homelessness.
The bills aim at removing barriers for the construction and use of ADUs was a major component of the governor’s plan to reduce the cost of housing and rent. Early in his administration, Governor Newsom signed an executive order that created an inventory of all excess state land in order to find parcels to develop into affordable housing, launching partnerships with six California cities in April to develop affordable housing on that land. The Newsom administration has also stepped up enforcement of state housing laws, putting more than forty cities on notice for violations of state housing requirements. All of this, in addition to eliminating restrictions for ADUs in California, is expected to go a long way towards solving the states growing housing crisis.
Benefits of ADUs
In the case of California, additional restrictions have been placed on the laws regarding ADUs, making them difficult, if not impossible to add or use as a rental space. Now with the change in the law regarding ADUs in California, they are bound to make a comeback. There are two main reasons people have a desire to build an ADU. The first is to house a family member, and the second is to generate additional income from rent. The latter is what the new laws hope to stimulate in an effort to increase the number of available apartments and in turn slow the runaway rise in rent.
Flexible solutions to housing can have a number of other positive effects on communities as well. To start, ADUs are affordable when it comes to construction because they don’t require the purchase of new land or the construction of new infrastructure. They are also typically built with cost-effective wood frame construction, which is significantly less costly than new multifamily homes. ADUs allow extended families to be near one another while maintaining privacy. Plus, they provide as much living space as many newly-built apartments and condominiums. This makes them well suited for couples, small families and seniors. ADUs help the environment, improve the quality of life for residents, and have lower monthly rental payments compared to traditional apartment complexes. With updates to the law you can now get legal rental income from a permitted ADU, or you can live in the ADU and rent out the other dwelling. The construction of ADUs will go a long way towards helping California meet its housing goals and increase the state’s affordable housing supply.
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