New Law Aims to Open Up Housing Inventory

The Bay Area’s real estate picture may soon change dramatically, thanks to a new California law that now makes it easier to build second residential units on single-family properties. Called accessory dwelling units (ADUs), these structures are ideal for limited income tenants like students, the elderly or disabled, and even health-care providers who need to live on-site to care for patients. These separate structures can have full kitchens and bathrooms and be up to 1,200 square feet. However, for each new bedroom that is built in the secondary unit, there must be one parking space provided. ADUs may be attached or separate from the main house, or even carved out of space inside the principal residence. While they may be rented as standalone units, ADUs cannot be sold separately from the main residence. The new law could be a boon to homeowners who plan to sell down the road. In the past, if such structures were not permitted, they could not be included in the property’s total square footage. They also caused problems with both county records and comparative market analyses due to discrepancies of the property size. In anticipation of the new law, MLSListings, the multiple listing service (MLS) for Silicon Valley and the coastal regions, has been working for months on adapting MLS fields to accommodate secondary dwellings. Sellers will soon be able to include the square footage for their ADU and buyers will be able to search for homes that offer a separate living unit on mlslistings.com. ADUs are a welcome market addition and could go a long way in easing the inventory and affordability challenges in California.