California’s new Assembly Bill 1033 introduces a significant change to the housing market by allowing homeowners to sell accessory dwelling units (ADUs), commonly known as granny flats, as separate entities like condominiums. This legislative move, spearheaded by Assemblyman Phil Ting, aims to alleviate the state’s housing shortage by increasing the stock of affordable homes.
The law enables property owners in participating municipalities to construct and sell ADUs independently on their property. This process is akin to selling condominiums, where owners must inform local utilities and establish a homeowners association for managing shared spaces and property maintenance. This structure creates a dual property tax scenario, where the main house and ADU are taxed separately.
The intent behind AB 1033 is to make homeownership more accessible, especially in urban areas where space is limited, and traditional single-family homes are expensive. By facilitating the sale of ADUs, the law could help diversify the housing market, offering more affordable options for first-time buyers, young families, and individuals seeking to downsize.
The law is also seen as a financial boon for retirees, who, having paid off their mortgages, can now leverage their property to generate additional income by selling or renting out ADUs. This can provide them with a substantial financial cushion without the need to leave their homes.
The concept of selling ADUs as separate units has already gained traction in other states like Oregon, Texas, and Washington, with Seattle notably increasing its ADU permits after easing construction regulations. The success in these areas suggests a promising outlook for California’s new approach to addressing its housing crisis through ADUs.
By allowing the sale of ADUs, California is taking a step towards creating more flexible and inclusive housing options, potentially transforming the real estate landscape to better meet the needs of its diverse population.
Source Name: LA Times
