What is AB1033?
AB1033 is a California state law passed in October 2023 that aims to promote affordable homeownership by allowing ADUs to undergo condominium conversion. This means that, subject to local government passing an ordinance to allow it, ADUs could potentially be sold as individual units, much like condos. The bill’s primary goal is to increase the availability of affordable housing options and to provide homeowners with more flexibility in managing their properties.
A significant aspect of AB 1033 is the provision that allows ADUs to be sold or conveyed separately from the primary residence under specific conditions. ADUs can be sold separately when developed by a qualified nonprofit corporation, if they adhere to certain affordability and occupancy restrictions. Importantly, the bill does not limit the ability of ADUs to be sold or conveyed separately as condominiums, subject to local ordinances that permit this sale by homeowners (not just non-profits). This provision represents a substantial shift from the state’s previous stance and opens up new possibilities for homeowners and potential buyers alike, particularly in the realm of affordable housing.
Why consider selling an ADU from the main property with AB 1033 California?
Homeowners now have the option to convert their ADUs into condominiums, providing a unique opportunity to sell these units separately. This flexibility can be particularly appealing in high-demand housing markets. Developers might see this as an opportunity to cater to a new segment of the market, focusing on creating ADU projects that are designed from the outset to be sold as individual units.
The ability to sell ADUs separately could impact property valuations, potentially increasing the overall value of properties with ADUs. This could also affect the affordability aspect, a key consideration in many ADU developments.
You may also want to learn about SB9, which enables a lot split and development of additional units.
Can you sell an ADU in San Diego?
No, you cannot sell an ADU in San Diego. As of April 2024, no cities in Greater San Diego currently allow selling ADUs separately from the main home.
The ability to sell ADUs separately hinges on the decisions of local governments. In Greater San Diego, the response has been varied. For instance, National City has expressed interest in exploring this option, but there are no formal regulations in place yet. Other cities in the region are also contemplating this change, but it’s a developing area, and concrete policies are yet to be established.
Further reading: https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202320240AB1033
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