SJ: San Jose Becomes First City In State To Allow Property Owners To Sell Accessory Dwelling Units

San Jose homeowners can now sell their accessory dwelling units as separate property.

This week the city became the first in the state to opt into a new law that allows ADUs and the land underneath them to be sold as their own lot.

ADUs have been targeted as one way to ease the housing crisis in California by lawmakers in a series of laws that made changes such as easing construction and conversion requirements and speeding up the permit process. The latest law, AB 1033, allows homeowners to split their lot and sell an ADU as a condo if local jurisdictions opt in.

Assemblymember Phil Ting, D-San Francisco, who authored the law, said it will also allow property owners to get value out of property without taking out a loan.

"This is one way to get equity out of your home without going into debt," Ting said in a phone interview on Friday.

Ting spoke earlier in the day at a press conference at a San Jose home along with San Jose Mayor Matt Mahan celebrating the city ordinance that took effect on Thursday.

"We are eager to create a generation not just of renters, but of homeowners," Mahan said.

The city has built nearly 1,400 new ADUs in the last five years, representing about a quarter of its housing stock in that time, and thousands more have been permitted, according to Mahan.

Both Mahan and Ting said they hoped other jurisdictions would follow suit. So did housing advocate Rafael Perez, board president of the nonprofit organization Casita Coalition, who also spoke at the press conference.

"ADU condos have proven successful elsewhere, providing much-needed inventory that is more affordable than traditional single-family homes," Perez said.

"Families in San Jose will now have more options for housing themselves and other generations on properties with an ADU," he said.

The move also drew support from the Santa Clara County Association of Realtors. The Association's president, Michelle Perry, said in a statement that ADUs have been a successful way to create new affordable housing.

"AB 1033 permits cities the opportunity to approve the conversion of ADUs to for sale housing offering a viable pathway to homeownership," Perry said.

Dan Kearnan, who hosted Friday's conference, said the changes in state and local law had allowed him to take advantage of the property he moved into in 2018.

"I looked out at our backyard, which had not been developed, and said, 'what can I do with this large property?'"

He said he installed the ADU in 2021 and had been renting it out. Now, his in-laws will be moving in, for better or worse, he joked, allowing them to become homeowners in Silicon Valley after being priced out of the market.

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