Today, the state of California is struggling with a severe housing shortage, so new legislative changes are designed to combat this feature. Assembly Bill 1033 (AB 1033) and Assembly Bill 976 (AB 976), which were both signed by Governor Newsom this week, may have substantial implications for Accessory Dwelling Units (ADUs), also known as “granny flats” throughout the state of California. Therefore, let’s look at the main conditions of these bills.
AB 1033 — ADUs Sold Separately
AB 1033 allows property owners in some cities to build ADUs on their property and sell them independently, as with condominiums.
How it works?
Owners building ADUs must notify local utilities about these units’ creation and separate conveyance. To do this, it is necessary to create an association of homeowners to manage the costs of maintaining common areas and monitor the property’s appearance. Property taxes for the primary residence and the ADU will be billed separately.
What is it for?
AB 1033 is expected to help increase gentle density in many cities. Through the development of single-family apartments (the same as ADUs or duplexes) within zoned neighborhoods. What are the benefits of low building density? It helps preserve the residential facade, keeps the aura of the neighborhoods, and makes them visually pleasing. On the other hand, this process helps fight the housing crisis. Passage of AB 1033 will help create additional opportunities for first-time homebuyers with low or moderate incomes.
AB 976 — Removes Owner-Occupancy Requirement
How it works?
AB 976 expands the ability of property owners to build rental accessory dwelling units (ADUs). In addition to removing any owner-occupancy requirements. The bill repeals owner-occupancy requirements that prohibited ADU construction unless the owner lived in either the main house or the ADU. It’s worth remembering in 2017 when ADU construction skyrocketed when homeowner occupancy requirements were eliminated. As a result, this has led to thousands of new rental homes in California.
What is it for?
New legal changes allow ADUs to be used exclusively for rental purposes to expand California’s rental housing market. Additionally, removing owner-occupancy requirements could facilitate owners’ use of loans or home equity to add ADUs to their existing properties.
Conclusion — How will the new legislation impact the California market?
Legislative changes will likely significantly impact the housing landscape in California. So far, critics argue that the new laws may correct the regulatory authority of local jurisdictions. On the other hand, defenders of the laws believe that they will increase the supply of housing on the market and its affordability — and, accordingly, will bring a step closer to resolving the crisis.
It is essential to understand that the laws aim to create more affordable housing options for various consumers. From retirees looking to increase their income to young families dreaming of buying their first home. Now, we can see how California is slowly but surely trying to cope with the housing crisis and provide comfortable conditions for its residents.
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