AB 68 Accessory Dwelling Units

Investors Are Utilizing AB 68 To Add Tremendous Value to Their Multifamily Properties.

Local investors are taking advantage of California’s ADU (“Granny Flat”) Bill in a very big way.

What is California Assembly Bill 68 (AB 68)?

Passed by the California State Assembly in 2019, AB 68 legalized the widespread construction of “Granny Flats,” or Accessory Dwelling Units (ADUs), as easy-to-build affordable housing. ADUs are small, independent homes that are built alongside (or sometimes, within) an existing single- or multifamily home. In addition to traditional ADUs, AB 68 also legalized “junior” ADUs of 500 square feet or smaller, which must be built entirely within an existing home and have a functioning kitchen and bathroom.

Prior to AB 68, cities across California erected substantial barriers to their construction, including high fees, land use and permitting obstacles, and other “red tape.”

AB 68 addressed all these issues by:

  • Reducing the maximum time for approved permits from 120 days to 60
  • Eliminating local ordinances that had the effect of banning ADU construction, such as minimum lot sizes and floor area ratios
  • Eliminating the requirement that garages converted to ADUs include 1:1 replacement parking
  • Allowing by-right approval (i.e., minimal process) for both an ADU and a JADU
  • Prohibiting cities from banning short-term rentals in ministerially-approved ADUs
  • Granting the state’s Department of Housing and Community Development the authority to evaluated whether local agencies’ ADU ordinances comply with state law
  • Existing single-family properties in California have the potential for roughly 1.8 million new ADUs.
  • Roughly 85 percent of these are single-family homes where building an ADU pencils out according to current construction costs and rents; the remainder are sites ideal for both an ADU and JADU

ADUs in the Los Angeles Multifamily Market

We have recently seen numerous clients of ours utilize AB 68 for their local multifamily properties by building one or even multiple ADUs on-site, in areas such as storage rooms, laundry rooms, attics, basements, garages, and soft story parking areas (as pictured above) – or as fully detached structures.

From an income and value standpoint, it makes perfect sense for most investors. You can generate additional (and meaningful) cash flow for the property while adding tremendous value. Put very simply – if multifamily properties in your area are selling for $450,000/unit and you can build additional unit for $250,000/unit (which is about the going rate for ADU construction), why wouldn’t you?

Accessory Dwelling Units Los Angeles Multifamily

California Housing Bills SB 9 and SB 10 Explained

Duplex Zoning Coming to a Single Family Neighborhood Near You

CA Governor Gavin Newsom this week signed a pair of bills into law that effectively put an end to traditional single-family zoning restrictions in most neighborhoods statewide.

Senate Bills 9 and 10, which take effect Jan. 1, 2022, will make it easier for Californians to build more than one housing unit on many properties that for decades have been reserved exclusively for single-family homes and will give cities greater flexibility to place small apartment complexes in neighborhoods near public transit.

Although the laws represent two new approaches toward alleviating the state’s housing crisis, experts say neither is likely to produce the number of units needed to fully resolve it.

Here are answers to some questions you may have about these new laws.

What is Senate Bill 9?

Senate Bill 9 is the most controversial of the two new laws. It allows property owners to split a single-family lot into two lots, add a second home to their lot or split their lot into two and place duplexes on each. The last option would create four housing units on a property currently limited to a single-family house.

The new law will mark a shift from current policies that allow only two large units — a stand-alone house and an accessory dwelling unit — on single-family lots, as well as an attached junior unit no larger than 500 square feet.

Under the new law, cities and counties across California will be required to approve development proposals that meet specified size and design standards.

What are the caveats?

The law is designed to create additional housing while also preserving low-income, affordable units.

A proposed project under this new law cannot result in the demolition or alteration of affordable or rent-controlled housing or market-rate housing that has been occupied by a tenant in the past three years. Properties listed as historic landmarks or those located within a historic district are off-limits for new development. Wetlands, farmland and properties at high risk of fire or flooding are also exempt.

If someone chooses to split their property in two, each new lot must be at least 1,200 square feet, according to the new law.

Any unit created as a result of the law cannot be used for short-term rentals. They must be rented for a term longer than 30 days.

Who can do this?

Homeowners or landlords can apply to upzone their properties through their local jurisdiction, but only if they plan to live on the property for a while.

Property owners must sign an affidavit stating they will occupy one of the housing units as their primary residence for at least three years after splitting their property or adding additional units.

Does this law allow for offices and new housing units on single-family properties?

No. Any new units created under SB 9 must only be used for residential purposes.

Do cities and counties have to abide by this new law?

Under SB 9, local government officials may only deny a development application if they find that the proposed project would have a “specific, adverse impact” on “public health and safety or the physical environment” and there are no feasible and satisfactory mitigation options.

Will local rules about maximum square footage, building height and parking apply?

Proposals under this new law must adhere to objective zoning and design review standards established by local cities and counties. Developments must still follow local zoning rules such as those governing height and yard size requirements.

No parking is required for additional units if the property is within a half-mile of a major public transit stop. However, a local agency can require up to one parking space per unit if there are no frequent transit stops nearby.

Will this law put a dent in California’s housing shortage?

A recent study by the Terner Center for Housing Innovation at UC Berkeley estimated that just 5.4% of the state’s current single-family lots has the potential to be developed under SB 9, making construction of up to 714,000 new housing units financially feasible. That’s only a fraction of the 3.5 million new housing units Gov. Newsom wants to see built by 2025.

What is Senate Bill 10? 

Senate Bill 10 eases the process for local governments to rezone neighborhoods near mass transit or in urban areas to increase density with apartment complexes of up to 10 units per property. The new legislation also allows cities to bypass lengthy review requirements under the California Environmental Quality Act in an attempt to help reduce costs and the time it takes for projects to be approved.

Originally authored by Maggie Angst of Mercury News on September 17, 2021

Accessory Dwelling Units

New Laws Allow Multifamily Owners to Add Units via ADUs (Accessory Dwelling Units)

Several California laws adopted in 2019 to facilitate accessory dwelling units (ADUs) directly benefit multifamily owners. The primary laws of interest are Assembly Bill 68 (Ting)Assembly Bill 881 (Bloom), and Senate Bill 13 (Wieckowski). The three bills overlap significantly and amend California Government Code Section 65852.2. We anticipate that many multifamily owners will be able to quickly create additional units within their existing multifamily projects based on these recent changes.


The biggest opportunity for multifamily owners is found in Government Code Section 65852.2(e), which was expressly amended to provide for the ministerial and administrative (i.e., no CEQA or public hearing) approval of ADUs for multifamily owners in the following two instances:

  1. The conversion of unused space within existing multifamily structures to ADUs, such as storage rooms, boiler rooms, passageways, attics, basements, or garages, for a total increase of up to 25% of the existing multifamily dwelling units, and
  2. The addition of two detached ADUs on the same lot containing existing multifamily dwellings, which ADUs can be up to 16 feet in height and must have at least 4-foot rear and side setbacks.

The local agency must act on an application within 60 days (reduced from 120 days) and the application is deemed approved if not acted upon within such timeframe. Local agencies cannot impose  a minimum lot size or, until January 1, 2025, an owner-occupant requirement.


The local agency cannot require parking for the ADU if:

  1. The ADU is located within one-half mile walking distance of public transit,
  2. When there is a car share vehicle located within one block of the ADU, or
  3. The ADU is located within an architecturally and historically significant historic district.

For units that do not meet the exemptions above, parking requirements are capped at one space per ADU. If a garage, carport, or covered parking structure is demolished in conjunction with the construction of an ADU, the local agency may not require the replacement of such parking spaces.


Local agencies also cannot impose impact fees on ADUs less than 750 square feet. For ADUs over 750 square feet, the impact fees must be proportional to the primary dwelling unit.  Additionally, connection fees cannot exceed the reasonable cost of providing the service.

Relevant Excerpts from Government Code Section 65852.2

  • When a garage, carport, or covered parking structure is demolished in conjunction with the construction of an accessory dwelling unit or converted to an accessory dwelling unit, the local agency shall not require that those off-street parking spaces be replaced.
  • Notwithstanding any other law, a local agency, whether or not it has adopted an ordinance governing accessory dwelling units in accordance with subdivision (a), shall not impose parking standards for an accessory dwelling unit in any of the following instances:
  1. The accessory dwelling unit is located within one-half mile walking distance of public transit.
  2.  The accessory dwelling unit is located within an architecturally and historically significant historic district.
  3. The accessory dwelling unit is part of the proposed or existing primary residence or an accessory structure.
  4.  When on-street parking permits are required but not offered to the occupant of the accessory dwelling unit.
  5.  When there is a car share vehicle located within one block of the accessory dwelling unit.
  • Notwithstanding subdivisions (a) to (d), inclusive, a local agency shall ministerially approve an application for a building permit within a residential or mixed-use zone to create any of the following:

(C)(i) Multiple accessory dwelling units within the portions of existing multifamily dwelling structures that are not used as livable space, including, but not limited to, storage rooms, boiler rooms, passageways, attics, basements, or garages, if each unit complies with state building standards for dwellings.

(ii) A local agency shall allow at least one accessory dwelling unit within an existing multifamily dwelling and shall allow up to 25 percent of the existing multifamily dwelling units.

(D) Not more than two accessory dwelling units that are located on a lot that has an existing multifamily dwelling, but are detached from that multifamily dwelling and are subject to a height limit of 16 feet and four-foot rear yard and side setbacks.

  •  A local agency, special district, or water corporation shall not impose any impact fee upon the development of an accessory dwelling unit less than 750 square feet. Any impact fees charged for an accessory dwelling unit of 750 square feet or more shall be charged proportionately in relation to the square footage of the primary dwelling unit.
  •  For an accessory dwelling unit that is not described in subparagraph (A) of paragraph (1) of subdivision (e), a local agency, special district, or water corporation may require a new or separate utility connection directly between the accessory dwelling unit and the utility. Consistent with Section 66013, the connection may be subject to a connection fee or capacity charge that shall be proportionate to the burden of the proposed accessory dwelling unit, based upon either its square feet or the number of its drainage fixture unit (DFU) values, as defined in the Uniform Plumbing Code adopted and published by the International Association of Plumbing and Mechanical Officials, upon the water or sewer system. This fee or charge shall not exceed the reasonable cost of providing this service.