A new state law would allow property owners to sell their accessory dwelling units, or ADUs, separate from the main house. Currently, they can only be rented out. However, the law requires individual counties and cities to adopt the rules.
Why it matters
Assembly Bill 1033 aims to make more housing available for lower-income and first-time homebuyers. ADUs are smaller units built on the property of an existing home — but currently, they can’t be sold separately from the main house.
ADU construction is booming in San Diego. State lawmakers passed rules in recent years that make it easier for homeowners to build them.
And San Diego’s “ADU bonus program” promises even more granny flats coming down the pike. If a property owner builds an ADU and reserves it for lower-income renters, then the city allows the owner to build an additional ADU and rent it at market rate. In so-called “transit priority areas,” there are technically no limits to the number of bonus ADUs someone can build.
If San Diego opts into AB 1033, thousands of newly-eligible housing units could hit the market in the coming years. These units would very likely be priced lower than traditional homes.
By the numbers
In 2020, San Diego approved 603 ADU permits. So far this year, the city has approved 1,531 permits.
San Diego’s ADU bonus program is still picking up speed. In 2021, a total of 34 ADUs were permitted through the program. Through October of 2023, a total of 124 ADUs were permitted.
Gary Geiler, assistant director with San Diego’s Development Services Department, said most bonus ADU projects have between 4 and 6 units. However, some larger projects are also under review.
Closer look
Housing advocates say AB 1033 could introduce some more affordable options to the housing market.
“We supported it because it was moving the ball in the right direction,” said Ricardo Flores, executive director of LISC San Diego, a housing nonprofit that got behind AB 1033.
But Flores cautions that the new rules wouldn’t solve San Diego’s housing crisis — not even close.
“It is a piece of the puzzle, but it’s a very small piece of the puzzle,” he said.
Looking ahead
The San Diego City Council would have to approve an ordinance allowing ADU sales, and council members could shape the program in order to meet the local housing market needs.
If the city opts in, longtime San Diego real estate agent Gary Kent cautioned the new rules could throw a curveball at the lending industry.
“I think banks will take a while to catch up with this,” he said. “When you have a house that is 3,000 square feet, and there’s an ADU in the corner of the lot, that’s just not something they’re used to doing a loan on.”
