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New Law Permits California Property Owners to Sell ADUs Like Condos

Advocates for the new law see this helping people who are looking to buy starter homes amid California's housing shortage and high prices, while lightening the burden of homeowners.

An ADU in Seattle, where the law has precedent, photo: The Sightline Institute

In what is being described as an attempt to fuel "more home ownership," last week California passed AB 1033, a new law that would allow property owners to construct and sell accessory dwelling units, aka ADUs, to another party on their property under the same rules that govern condos.

Previously, an ADU built on one's property could only be rented out. The new law seeks to allow more people the ability to buy a home of their home by purchasing an ADU on the land owned by another.

ADUs are common in California, often glimpsed as guest houses or converted garages, based behind bigger houses owned by the property owner. The new law, as reported by The L.A. Times, will only take effect in cities that "opt-in" to the law governing ADUs under the same rules as condos.

ADUs will have different property taxes from the homes they're built beside, and each property will be required to form a homeowners association to asses costs for maintenance of shared spaces between the home and ADUs.

Advocates for the new law see this helping people looking to buy starter homes amid California's housing shortage and high prices while lightening the burden of homeowners, especially elderly ones who may have paid off their homes but have relatively little income. Homeowners may also choose to move into their ADUs and sell their main home for the funds.

Such a law has been instituted in states like Texas and Oregon, and cities like Seattle, which has seen a resulting increase in permits for property owners to construct ADUs.

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