California ADU Law: Your Roadmap to Success

California ADU Law consists of regulations regarding accessory dwelling units making them easier, accessible, and affordable for diverse property owners. California ADU law amendments have greatly eased the process of developing ADUs. The latest regulations allow homeowners and other real estate enthusiasts to make the most of these efficient living solutions. 

Understanding California’s zoning regulations and permit requirements before designing an ADU floor plan is important. We at Renofi navigate you throughout the ADU planning journey by providing the necessary guidelines, resources, and expertise. We help you make well-informed decisions and build a functional accessory dwelling unit that complies with the local zoning laws.

In this article, we delve deeper into the latest developments of California’s ADU laws in 2023 and what they mean for property owners. Read on to learn about the implications and opportunities introduced by the state’s recent amendments to the ADU laws and use them to plan your roadmap to success in the near future.

What Are the ADU Laws in California?

California’s shortage of housing facilities has been a prevalent problem for several years. To combat this, the state’s policymakers introduced various rules that legalized the construction of accessory dwelling units in 2016. 

Several years and follow-up regulations later, it is evident that ADUs are an excellent solution to tackle the housing supply problem. These granny flats are constructed on the same lot as the main residence and designed to feature essentials such as a bedroom, living room, bathroom, and kitchen, amongst other amenities. 

Granny flats are multipurpose units that can accommodate guests, elderly family members, adult children, and long—and short-term tenants. However, for a long time, California restricted the use of ADUs for rentals and imposed a set of overly strict and unclear laws on their construction. These included notions such as parking requirements, HOA restrictions, and additional charges that greatly limited the growth and development of ADUs. 

Fortunately, things seem to be changing quickly in California. By 2024, the state’s legislation had introduced various new rules that granted homeowners and prospective buyers more freedom and transparency, dramatically changing the ADU landscape. 

ADU Laws in California - What’s New?

The State of California continues to pass new regulations with respect to accessory dwelling units. Here are major highlights of California ADU laws that are now in effect and leading to a surge in ADU construction:

Relaxed Height Restrictions

Initially, the height of ADUs could not exceed 16 feet in any circumstance. The recent updates have relaxed these restrictions and allow attached ADUs to be built as tall as 25 feet or till the maximum height of the main property, whichever is lower.

Additionally, ADUs constructed within half a mile of public transit, like train stations or bus stops, can be up to 18 feet tall. Two-story, multi-family dwelling units can also be 18 feet tall, providing better flexibility and living space to the occupants.

Transparent 60-Day Rule

Getting an ADU permit in California has, for a long, been quite a hassle. Before 2024, the property owner had to request an ADU permit, which would be approved or denied within sixty days. Given the numerous requests submitted, many applications were rejected without significant reason once this period ended.

The latest change to the 60-day rule now requires agencies involved in the permitting process to respond to all requests within 60 days of submission. In case a permit is denied, the department must provide detailed reasons for the decision and include possible remedies to fix the problem.

Redefined Setbacks

Previously, California’s ADU laws prevented the construction of an 800-square-foot ADU due to front setback requirements. These setbacks measure the distance of an ADU from the edge of the main property and hinder the ability to build granny flats in compact backyard spaces. 

As of 2024, California has redefined the setbacks to four-foot side and rear yards. They have also introduced a state exemption that facilitates the building of an 800-square-foot ADU even if it does not abide by the front setback requirements.

Fire Sprinkler Requirement

Installation of fire sprinklers was a mandatory requirement for every main residence before they could start building an ADU. However, this requirement has now been eliminated when permitting an ADU application.

Unpermitted Work

Earlier jurisdictions forbid homeowners from building ADUs if they had any unpermitted work on their estate. This work could include non-conforming zoning conditions, illegal structures, or building code violations. 

The process of removing these restrictions was costly and slow, adversely impacting the development of ADUs in California. The latest Senate bill has lifted this constraint and allows the owner to go ahead with building an ADU on the property as long as the unpermitted work is not a safety or health hazard.

Parking Requirements

Before 2020, California’s government had strenuous parking requirements for every newly built ADU that were impossibly hard for property owners to meet. These regulations have now been reduced and only require a single parking space per bedroom or dwelling unit.

In certain circumstances, the parking restriction is completely dropped. These include cases where:

• The ADU is only half a mile away from public transit
• The ADU is located in a historically or architecturally significant area
• The ADU has a car share vehicle within one block distance
• The ADU is built on an existing space such as a garage, carport, or other parking structure

What Other Laws Are Important for ADUs in California?

Apart from these prominent changes, there have also been other minor but impactful changes introduced by the state of California in the past few years. These cover rules related to:

JADU Bathrooms

JADU, short for junior accessory dwelling units, now no longer requires attached bathrooms. As long as the primary residence includes at least one bathroom that is accessible to the JADU, there’s no need to invest in building an additional one inside the granny flat.

Demolition Laws

Building an ADU on an existing property, such as a garage, is complicated and costly. This situation is made worse when homeowners succeed in acquiring an ADU permit, but their demolition permit is withheld or delayed. 

The constructors are only able to tear down the present structure with the pass, which indefinitely halts the ADU building process. However, the recent updates in the California ADU laws have put an end to this problem. Now, agencies are no longer allowed to withhold demolition permits if an ADU permit has been granted successfully.

CalHFA Grants

The California Housing Finance Agency (CalHFA) ’s establishment of the California ADU Fund has helped encourage property owners to add ADUs to their residences. People with low to moderate incomes are eligible for these grants, which assist with ADU planning and development. 

CalHFA now also requires a working group that helps the eligible candidates qualify for the ADU loans and is planning on increasing the amount of capital available for the selected recipients. 

How RenoFi Can Help With Your ADU

Similarly, our team at RenoFi is committed to providing you with the necessary resources, expertise, and financing options to get you started on your ADU journey. We ensure that the in-law suite strikes the perfect balance between functionality and affordability. We offer tailored loan options that allow you to take advantage of a lower rate while still increasing your borrowing power. 

If you don’t have enough equity built up in your current house, it can be almost impossible to fund the construction of your dream ADU using a home equity loan. RenoFi loans are perfect for this because they are based on the after renovation value of the property, allowing you to obtain the financing you need. 

Let’s say your current home value is $500,000, and your outstanding mortgage balance is $400,000. You are planning on adding an ADU and expect the value of your home to increase to $640,000. Your current loan-to-value ratio (LTV) is already at 80%, which means that most home equity loans are out of reach because that’s the maximum LTV they allow. So, your borrowing power using your current equity is $0.

RenoFi, on the other hand, would allow you to go as high as 150% LTV of your current value or 90% of your after renovation value, whichever is lower. So, in this example, while using a standard home equity loan results in your borrowing power being $0, a RenoFi loan allows you to borrow up to $176,000 by using the after renovation value of your home!

Get started with your RenoFi loan here

Multi-Family Dwelling

Following the latest assembly bill, multi-family buildings such as complexes and apartments can feature additional units as long as they meet the setback and size requirements. 

Multiple ADUs can be constructed on existing non-habitable structures such as basements, attics, and garages. Alternatively, two detached ADUs with a four-foot side and rear setback can be added to the multi-family lot.

Additional Changes

Other changes to the ADU laws that make them an attractive option for various real estate enthusiasts in California include:

• Elimination of impact fees for ADUs less than 750 square feet and significant reduction for larger properties
• Removal of minimum lot size requirements for building ADUs
• Exclusion of owner-occupancy obligation
• Permit development of the main dwelling and ADU at the same time
• No setback conditions for ADUs are made by converting or replacing existing structures
• Allow ADUs to be sold separately from the primary residence

Frequently Asked Questions (FAQs)

How much does an ADU permit cost in California?

The permitting and legal fees involved in the ADU building process in California are significantly high. The cost of an ADU permit depends on various factors, including its type (attached, detached, or converted), square footage, and municipality. Homeowners should expect to spend anywhere between $2000 and $10000 on ADU permits, inspections, and other state-specific regulatory requirements.

What is the difference between an ADU and a Jadu in California?

An ADU is an independent living space that can be up to 1200 square feet, or 50% of the primary residence’s size. These granny flats include all essentials, including a bedroom, bathroom, and kitchen. 

On the other hand, a JADU can be a maximum of 500 square feet in size and is more closely connected to the main property. They often share a bathroom and utility connections such as electricity, water, and sewage with the main dwelling.

What is the ADU grant in California, and is it still in service?

The ADU Grant offers generous sums, up to $40,000, to assist homeowners with their ADU projects. This amount is usually reserved for pre-development and non-recurring charges such as site preparation, architectural designs, impact and permit fees, etc. The last grant approved by California’s government was in December 2023 for up to $25 million. The service is currently not available in 2024 but is expected to resume in the near future.

What are the benefits of adding an ADU to a property in California?

ADUs can be used for multiple purposes and significantly benefit every homeowner in California. These granny flats can be occupied by tenants for a period of thirty days or more to generate rental income. They can also be sold to potential buyers for prices proportional to their size and build quality. Lastly, ADUs are known to boost the value of the property and can account for up to 20 to 30% increase in return value.

Are solar panels mandatory for ADUs in California?

Yes, as per the California Energy Commission, all newly built, detached ADUs require solar panels unless they are modular or prefab units. The solar plates may either be installed on the ADU or the main property.

Is it allowed to build ADUs on existing structures in California?

Housing laws in California permit the conversion of existing structures to accessory dwelling units. This means that you can either demolish a present basement or garage to construct an ADU or build the unit as an addition to the parking space.

Conclusion

Suffice it to say the latest changes in the California ADU laws are bound to transform the ADU landscape in the best possible way. The introduced relaxations and incentives make it easy for homeowners across the state to maximize spaces and generate extra income from these independent suites. 

We at RenoFi are prepared to help you start your ADU project on the right foot. Our team is expert at understanding your vision and providing you with the necessary resources and guidelines to kickstart the planning and development process. 

In addition, our RenoFI loans are the most innovative way to finance a home renovation project. Unlike traditional loans, which are based on your current home value or require you to refinance your primary mortgage and give up your low rate, RenoFi loans are based on the after renovation value of your home. This allows you to borrow, on average, 11x more, get a low monthly payment, and keep your low rate on your first mortgage. 

Start planning your roadmap to success with our pre-approved ADU plans, which simplify the complicated task of obtaining permits and help you make the most of an ADU in California!