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The Do's & Don'ts of ADU's

By Datta Khalsa

With all the focus on increasing housing density these days, there has been a seismic shift in attitudes by our local governing agencies around Accessory Dwelling Units.

For point of reference, the Accessory Dwelling Unit, more commonly referred to by its acronym “ADU” is a secondary dwelling built on the same lot as the primary residence or mixed use building there. It can be either attached or detached from the main residence, and historically it was required for the owner of the property or at least a member of their immediate family to reside in either the main home or the ADU in order for the other structure to be rented out.

Flash forward to present time, and with the passing of updated standards last year in response to the housing crisis, there is a whole new set of do’s and don’t for ADU’s, in both the County and the City of Santa Cruz. For purposes of this writing, I will focus primarily on the new standards for the City.

Under the current guidelines, ADUs can be created by building a new structure, building an addition to an existing residential structure, or converting any existing legal structure such as a garage, workshop, or guest house AKA a Conversion ADU.

On parcels developed with a single-family home, one ADU and one Junior ADU are allowed, and on parcels developed with multi-family housing (duplex, triplex, apartments, townhomes, and condos), up to two New Construction ADUs are allowed, and a minimum of one Conversion ADU, up to a maximum of 25% of the existing units.

Another big shift in policy has been the change in occupancy requirements. This began with a gradual bending of the rules several years ago when the Planning Department started granting 2-year exemptions on a case-by-case basis with an option for a 1-year extension, when an owner needed to move away for personal or business reasons.

Effective June of last year, the city approved a temporary period from 1/1/20 through 1/1/25 during which owner occupancy is not required for any new ADU permitted within the allotted timeframe, effectively allowing property owners to create legal duplexes on the properties of their Single Family Residences.

Oddly enough, previously existing ADU’s which were permitted before 2020 must still comply with the occupancy requirement, and perhaps more surprisingly, it appears that a previously illegal ADU brought into compliance before the 1/1/25 expiration date under the current program can be permitted without the need for the owner to occupy the property. Don’t ask me to explain that discrepancy, I’m not in government.

I’m also not an architect or land-use consultant, so you shouldn’t take my word for any of this, but as a real estate professional it’s my duty to apprise clients of general trends and policies affecting their property rights or values. And to further help explore the possibilities, I am happy to connect you with a qualified expert who can advise you on your particular situation.

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