A new law allows homeowners to sell ADUs like condos, boosting homeownership. Here’s how AB 1033 works!

California has taken a significant step in addressing its affordable housing crisis with the passage of Assembly Bill 1033 (AB 1033), known as the Accessory Dwelling Unit (ADU) Separate Conveyance Act. Signed into law on September 26, 2023, the legislation will come into effect on January 1, 2024.

AB 1033 allows local governments to pass ordinances permitting the separate sale or conveyance of ADUs from the primary residence. This means that homeowners can sell or transfer ownership of the ADU, even if they continue to own the primary residence.

Previously, California law restricted the separate sale of ADUs, which hindered their construction due to difficulties in securing financing. AB 1033 aims to make it easier for homeowners to build and sell ADUs, potentially increasing the supply of affordable housing in the state. ADUs have several advantages, including providing additional housing for family members, generating income for homeowners, increasing property values, and fostering walkable and bikeable communities.

Local governments have the discretion to adopt ordinances for the separate sale of ADUs, provided certain conditions are met, such as compliance with building codes and zoning regulations, separate utilities and addresses, and notifying the local government before any sale or transfer.

The legislation opens up new possibilities for Californians, allowing them to purchase and sell ADUs like condominiums, providing a more flexible approach to homeownership. AB 1033 is expected to benefit both retirees looking to supplement their income and young families seeking affordable starter homes. Additionally, it presents opportunities for retirees to leverage the equity in their homes while contributing to the creation of affordable housing. In participating cities, this law allows homeowners to construct and sell ADUs, fostering the hope of increasing homeownership and alleviating the housing crisis in California.