ADU News
January 21, 2024

This California ADU Law Could Allow You to Sell Your ADU - AB 1033

Argi Avetisyan
Argi Avetisyan
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This California ADU Law Could Allow You to Sell Your ADU - AB 1033
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California's escalating housing affordability crisis has prompted a groundbreaking legislative change. With the signing of Assembly Bill 1033 by Governor Gavin Newsom on October 14, the path to selling accessory dwelling units (ADUs) separately from the primary residence has been unlocked, potentially revolutionizing the state's housing market.

The Genesis of AB 1033

Initially, ADUs, such as backyard cottages or converted garages, were firmly attached to the property deed of the main residence, denying homeowners the option to sell them independently. This restriction not only limited flexibility for homeowners but also constrained the potential for expanding affordable housing options. AB 1033, crafted by Assemblymember Phil Ting, directly challenges this status quo.

The Mechanics of Condo-ization

The heart of AB 1033 lies in its allowance for what's colloquially known as "condo-ization." This process transforms the property ownership model, enabling individual units within a single property – in this case, ADUs – to be owned and potentially sold separately. Condo-ization is not just about physical division but is a legal reconfiguration of ownership rights, allowing distinct parties to own different parts of the same property.

Impact on Housing Affordability

The move to permit the sale of ADUs independently is a major stride towards alleviating the housing crunch. As Al Salguero from the Orange County Assessor’s Office pointed out, this strategy significantly contributes to the affordable housing segment, offering more options for homeowners and renters alike. It presents a unique opportunity: homeowners can now choose to keep, rent out, or sell their ADUs or main residences as individual units, thus injecting much-needed flexibility and inventory into the housing market.

Local Autonomy and Its Consequences

Despite the state law providing a framework, the actual implementation of ADU condo-ization falls under local jurisdictions. Each city and county in California has the discretion to develop and enforce rules governing this transformation. This decentralization means that the practicality and ease of converting ADUs into separate saleable units will vary widely across different areas, potentially leading to a patchwork of regulatory environments.

Looking Forward

With the passage of AB 1033, the door is now open for a significant shift in California’s residential property market. For homeowners, this means an unprecedented level of control and flexibility over their property assets. For renters and potential buyers, it promises more diverse and possibly more affordable housing options.

The full effect of AB 1033 will unfold as municipalities roll out their respective guidelines and homeowners begin exploring this new possibility. The landscape of California's housing market is poised for change, and with this legislative move, the golden state might just have found a creative solution to one of its most pressing problems - the affordability and availability of housing.

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