Research

The ADU Scorecard: Grading ADU Ordinances in California

Interim Report – February 1, 2020
Authors: Karen Chapple, Audrey Lieberworth, Eric Hernandez, Dori Ganetsos, Alejo Alvarado and Josie Morgan

Introduction

     Across the United States, but especially in California, a shortage of housing is creating affordability challenges for communities.[i] One potential solution is increasing the production of accessory dwelling units (ADUs), which are separate small dwellings embedded within single-family residential properties. Also known as secondary units, granny flats, and in-law units, and often located in converted garages or basements, ADUs are a low-cost and readily implementable approach to infill development, particularly in high-cost cities characterized by little to no vacant land and an abundance of single-family lots.[ii] In a 2016 McKinsey report, researchers estimate that California could add up to 790,000 housing units if homeowners are willing to adapt their properties to accommodate ADUs.[iii]

     However, with the exception of a few cities like Los Angeles, widespread construction of ADUs has not yet materialized.[iv] Zoning laws, particularly from the post-World War II era, have limited ADU development across the United States.[v] Even when states have attempted to undo restrictive zoning practices, local governments still impose burdensome regulatory requirements and delay enactment of local laws. Barriers such as lot regulations and fees can make ADU construction physically impossible and deter homeowners who already face issues such as neighbor opposition to new construction, existence of minor code violations, or lack of financing to cover design and construction costs.[vi]

     Thus, California has launched a concerted effort to create ADU ordinances that facilitate production. In 2003, the California State Legislature passed Assembly Bill 1866, which required that every state jurisdiction have a ministerial process for approving secondary units. Still, at that time many jurisdictions enacted ADU ordinances that were unduly complex and restrictive.[vii] Thus, in 2016, state legislators, supported by the Bay Area Council, began enacting a new set of reforms that addressed parking requirements, setbacks, fees, and other barriers (see Appendix).

     This report introduces an ADU scorecard that aims to evaluate the robustness of ADU ordinances in over 200 jurisdictions in California based on an A to F grading system. The standardized grading method allows cities to compare their ADU laws with other municipalities, and better understand the homeowner experience in building ADUs within their jurisdictions. The ADU scorecard accounts for 15 different ADU requirements, assessing their compliance with state law and user-friendliness for homeowners.[viii]A valuable tool for policymakers, the ADU scorecard can help cities shape ADU requirements by teaching about ADU ordinance practices in ‘good-grade’ jurisdictions. These provide important examples as cities must revise their ordinances again in coming years to comply with new state laws.

     After a brief discussion of our methods, this report describes the overall findings for California jurisdictions. We then highlight model practices in Berkeley, Eureka, Sebastopol, and San Diego. A conclusion summarizes recently passed legislation and next steps.

Methodology

     For this report, we reviewed the 201 ordinances received by California’s Department of Housing and Community Development (HCD) by September 6, 2019. We evaluated the ordinances that had been submitted to HCD, and when information was missing from an ordinance (e.g., for data on fees), we searched the jurisdiction’s website. With some 540 municipalities and counties expected to submit ordinances, this represents 37.2 percent of the state. In some cases, jurisdictions have modified their ordinances but failed to notify the state; we have evaluated an additional three ordinances in this category, for a total of 204. But when jurisdictions fail to submit an ordinance, State law governs their ADU regulations. When jurisdictions default to state standards, but did not submit an ordinance, we do not provide a grade.[ix]

     In order to “grade” the ordinances, we created a rubric to score the ADU regulations of each city or county. There are 16 equally weighted criteria (see the “Grades” tab of this webpage for grading criteria and rubric). Some of these come from the legislation passed in 2016 or 2017, while others come from the 2019 reforms. Three of these offer opportunities to gain extra credit, which include Parking Requirements for ADUs, and Maximum Size for Attached and Detached ADUs.[x] Each criterion is valued between 5-20 points, with the exception of Additional Layers of Entitlement or Review, for which jurisdictions may only receive negative points. Points within each grading criteria are cumulative. We added the scores for each of the criteria to get a final numerical score for each jurisdiction, which we then used to construct a curve and assign letter grades.

     A good grade reflects a regulatory environment friendly to ADU construction. Jurisdictions with high scores do not impose excessive zoning and permitting barriers that could get in the way of ADU construction. A bad grade reflects a regulatory environment that places unnecessary and/or significant barriers in the way of homeowners constructing ADUs. Jurisdictions with low grades generally have burdensome regulatory requirements that restrict ADU construction despite the requirements of the state ADU ordinance.

How Is California Doing?

     With some exceptions, California’s jurisdictions are not producing very good ADU ordinances (see Figures 1 and 2 below, full map here, and list of grades in the “Grades” tab of this webpage). The mean and median ADU ordinance grade in California is C+. Not surprisingly, grades varied across the state. California’s rural region did relatively well, with an average B- score among its jurisdictions.[xi]
Figure 1. San Francisco Bay Area and Capitol Region
Figure 2. Southern California
     Grades tend to reflect success in getting ADUs permitted: there is a positive correlation (r = 0.25) between a jurisdiction’s grade and how many ADUs it permitted in 2018. Larger municipalities that have already boosted their ADU production received scores in the A- or B range. A case in point is Los Angeles County, with an A-, which permitted 706 ADUs in 2018, and San Francisco, with an A-, permitted 364 ADUs.      Across California, jurisdictions tend to score points for allowing generous ADU sizes, as well as including detailed language such as about junior ADUs (JADUs).[xii] Where jurisdictions fall short is in adding additional layers of review or entitlements, or charging extra fees ranging from impact fees for parks, to fees for utility connections, to permitting fees such as address recording (Figure 3). In general, Northern Californian jurisdictions perform worst in terms of these onerous requirements.     
Figure 3. Points assessed for fees and review process by region.

     Many jurisdictions in the southern half of the state adopt a variety of other measures that may slow ADU production. Inland Empire jurisdictions stand out for high minimum lot sizes, low height limits, challenging setback regulations, and arduous parking requirements. Height limits are also problematic in Los Angeles County jurisdictions, and high minimum lot sizes are a barrier in neighboring Orange County jurisdictions as well. Jurisdictions in the Capitol and San Diego regions do not do well in terms of height limits and parking requirements. Many jurisdictions in the Central Valley and rural parts of the state have ordinances which are extremely vague, and others have overly strict setback regulations. Almost all jurisdictions in the state have owner occupancy requirements of some kind. But there are exceptions, as we see in the next section.

Models to Follow

Berkeley: A Work in Progress

Berkeley is a city located on the eastern side of the San Francisco Bay in Northern California. The city is 17.69 square miles, and in 2017, the city’s population was estimated at 122,324.

     Berkeley provides an example of a jurisdiction that – in response to community organizing — continually tweaks its ordinance in order to spur more construction. Though it is not a very good model (scoring a B-), its ordinance is improving gradually. Berkeley was one of the first cities to pass supportive ADU legislation, but over the years very little construction resulted. To help spur ADU construction locally, Berkeley City Council Member Ben Bartlett established an advisory ADU Task Force. The Task Force membership includes local community members who are also realtors, architects, planners, developers, mortgage specialists, and ADU advocates. It has been working collaboratively with the broader Berkeley community and City Council to advance ADU policy and construction in the city.

     Berkeley’s first revisions to its ADU ordinance were adopted in 2017, and, in response to local advocacy efforts, the City updated its ordinance again in 2018. The amended ordinance received high marks for increasing maximum ADU sizes from 750 to 850 square feet, and for eliminating the parking requirement. This is because the 2016 state laws prohibit parking requirements for ADUs within half a mile of public transit, and all Berkeley homes are located within half a mile of transit. Berkeley also allows four feet side and rear setbacks for ADUs, which is smaller than most jurisdictions across the state. In addition, the City does not mention lot size minimum requirements and allows ADUs on single-family parcels in all zoning districts with a few exceptions. To clarify the development process for applicants, the Berkeley Planning Department posted ADU guidance documents online, including a flow chart, table of development standards, and responses to frequently asked questions.

     Relaxing state ADU laws in 2016 has had a significant impact in Berkeley. In 2016, Berkeley permitted 14 ADUs, increasing to 57 in 2017, and 137 in 2018, according to the City’s 2018 Annual Housing Element Progress Report. However, there are still steps that local homeowners and advocates would like to see taken to make it easier to build ADUs, such as increasing height limits and enforcing the 120-day planning permit approval process. Berkeley is currently in the process of updating its ordinance to comply with the new 2019 state ADU legislation.

Eureka: A Rural Outlier

The city of Eureka is located along the coast of Humboldt County in Northern California. It is the largest coastal city (14.45 square miles) between San Francisco, CA, and Portland, OR, with a population of 27,177 (2017).

     Eureka stands out among small towns in California’s rural north for its generous ordinance and outreach efforts. Eureka received high scores for its ADU ordinance, which was adopted in 2019. The City does not impose parking requirements for ADUs, nor does it require replacement parking when an existing covered parking space is eliminated in conjunction with the creation of an ADU. Additionally, the City allows large maximum ADU sizes (1,200 square feet) without using language that limits maximum percent increase, and does not mention owner occupancy or minimum lot size requirements. Eureka’s ADU ordinance also includes Junior ADU language, and states that ADUs are permitted in any zoning district where detached single-family homes are a permitted land use. Furthermore, in September 2018, the City of Eureka and partnering agencies held a two-day ADU Fair to educate and inspire single-family homeowners to build ADUs.

     Eliminating common barriers that homeowners face in ADU development, as well as growing public awareness about the importance of ADUs, has been critical. According to Eureka’s 2018 Annual Housing Element Progress Report, just 14 ADUs were built that year. However, the City recognizes that it needs to do more than just revise its ordinance, and is pursuing additional steps. Currently, the City is working to design a pilot program that will help homeowners identify solutions for financing ADUs. The City also recently updated its Housing Element, and ADU development was highlighted as a key strategy to increase housing. There are approximately 6,000 single-family residential parcels in Eureka, and only 5% already house an ADU, which means that the creation of ADUs could constitute a substantial opportunity for local housing development.

City of San Diego: Financing Affordable ADUs

The city of San Diego is located along the CA coastline, approximately 120 miles south of Los Angeles. San Diego is 372.39 square miles, and its population was estimated at 1.42 million in 2017.

     Though it received a relatively high score for its 2017 ordinance, San Diego stands out for its efforts to educate homeowners and assist with finance, particularly for low-income residents. Some of the important features of its ADU (Companion Unit) program are eliminating the owner occupancy requirement, relaxing parking requirements, and expanding the zones where ADUs are permitted. Additionally, the City allows large maximum ADU sizes (up to 1,200 square feet) and construction of Junior ADUs, and has eliminated development impact fees. The City has also conducted extensive community outreach to describe the regulations and ADU development process to homeowners, and posted a number of online resources for the public. These include a helpful 42-page ADU handbook and a fact sheet with information about ADU development standards and responses to frequently asked questions.

     Another important feature is that San Diego has established subsidy programs to assist homeowners with ADU development. During the 2018-2019 fiscal year, the City set aside a $300,000 fund to help homeowners cover water and sewer fees. The City has increased the amount of available funding to $800,000 for the 2019-2020 fiscal year. In addition, the City’s Housing Commission is launching a pilot program to build 40 ADUs of varying sizes and designs for low income tenants. The ADUs will be built adjacent to single-family dwellings on land that the Commission owns. The purpose of this program is to identify costs, development timelines, the construction process, and potential hurdles in advance of launching a loan program in Spring 2020 to help low income homeowners build ADUs on their property.

     In response to these measures, the City has witnessed an astronomical rise in the number of ADUs built in the past few years. According to the City’s Annual Housing Element Progress Report, 215 ADUs were constructed in 2018 alone. However, homeowners are still concerned about permitting challenges in the Coastal Zone, which prohibit more widespread construction of ADUs.

Sebastopol: Model User-Friendly Ordinance

Sebastopol is a small city located in Sonoma County in Northern California. It is just 1.86 square miles in size, and in 2017 Sebastopol’s population was estimated at 7,666 residents

     Sebastopol runs a model ADU program, as exemplified by its overall permissiveness in terms of ADU construction and active promotion of ADUs. Its high-scoring ADU ordinance was first adopted in 2017 and later amended in 2018. It does not impose any parking requirements on new ADUs, exempts ADUs from the city’s residential lot coverage requirements, and allows two story ADUs to be constructed up to 25 feet tall. In addition to allowing ADUs in all residential zoning districts, Sebastopol also allows an ADU to be constructed on any parcel already containing an existing single-family home, regardless of whether or not that parcel is currently zoned for residential uses. The ordinance allows for the construction of junior ADUs.  Sebastopol does not require owner occupancy for either the primary unit or the standard accessory dwelling unit. Sebastopol’s 2018 amendments increased the maximum permissible unit size for ADUs proposed on lots greater than 10,000 square feet from 840 square feet to 1,000 square feet. Additionally, Sebastopol is already in the process of updating its ordinance to comply with the new 2019 state ADU legislation.

     The City developed supporting documents making the ADU requirements more user-friendly and easier to understand for property owners. Notably, these documents contain detailed information about the types of fees, e.g., sample fee amounts for an 840 square foot unit, that a property owner should expect to pay upon Building Permit issuance. In addition to developing online resources, Sebastopol collaborated with Sonoma County in 2018 to host a “Raise the Roof” housing fair and expo. This event helped spread awareness about ADUs and JADUs to 150 attendees, and demonstrates Sebastopol’s commitment to promoting ADUs as a viable tool to address the housing crisis. Since Sebastopol’s ADU program began, the City lowered the fees associated with both standard ADUs and Junior ADUs to make them more financially feasible to construct. The City’s ordinance also promotes manufactured and mobile home ADUs as a viable construction typology. According to Sebastopol’s Annual Housing Element Report, 16 ADUs were constructed in 2018.

Next Steps

     New state legislation that will go into effect on January 1, 2020 will force cities to remove some of the remaining barriers to ADU construction. Per Assembly Bill (AB) 68, localities will no longer be able to require a minimum lot size, rear and side setback more than 4 feet, or replacement parking when converting a garage to an ADU. Senate Bill (SB) 13 will remove impact fees for ADUs less than 750 square feet and adjust them proportional to the unit size if larger. SB 13 and Assembly Bill 881 also remove owner-occupancy requirements for five years. In addressing these new requirements, jurisdictions will be able to improve their ordinances (and grades!) substantially.

     Equally importantly, new state legislation provides a pathway to bring unpermitted units up to code (SB 13), allows for a JADU and ADU on the same lot (AB 68), prohibits common interest developments from prohibiting ADUs (AB 670), pushes the state and localities to encourage affordable ADU rentals (AB 671), enforces ordinance non-compliance via the Attorney General’s office (AB 68), and allows Habitat for Humanity, to sell deed-restricted land to eligible low-income homeowners (AB 587). Hopefully future legislation will address the few barriers that remain, such as lot coverage regulations, height limits, and multiple standard ADUs on a lot, as well as create new financial incentives for construction.

     California has come a long way, but as this report shows, passing new legislation is insufficient. Many jurisdictions remain out of compliance or simply missing in action, and only a handful are modeling best practices. Here at UC Berkeley’s Center for Community Innovation, we will continue monitoring compliance, updating grades on an ongoing basis as new ordinances come in. Moving forward, we will create an interactive web portal (http://www.aducalifornia.org) that will allow us to collect more information on barriers from local officials and residents. Together, we can scale up ADU production in California.

Acknowledgements

     We are grateful to Debbie Sanderson, and Josh Abrams (Baird + Driskell Community Planning) for their invaluable feedback. We also thank Madeline Livingstone, Alison Spencer, Kathleen Kong, and Zoe Riering-Czekalla for their research assistance.

Appendix

The first three bills (SB 1069, AB 2299, and AB 2406) came into effect on January 1, 2017, with the following provisions:

  • reducing parking requirements to one space per bedroom or unit;
  • allowing parking in tandem or setbacks;
  • exempting parking requirements under certain conditions, such as proximity to public transit;
  • removing sprinkler requirements;
  • prohibiting cities from requiring new utility connections (or capacity charges for internal ADUs);
  • allowing ADUs within existing space ministerially;
  • permitting ADUs up to 1,200 in floor area;
  • eliminating setback requirements for existing garages; and
  • authorizing local governments to permit junior ADUs (JADUs), or efficiency units within the main house.

 

The Legislature passed another set of ADU provisions effective January 1, 2018 (SB 229 and AB 494). In addition to clarifying some aspects of the previous bills, these included:

  • allowing new single-family home construction to include an ADU;
  • permitting new ADUs in all zoning districts that allow single-family uses;
  • modifying fees from utilities, such as water districts, to be proportional in scale to ADU size;
  • further reducing the parking required to just one space; and
  • allowing lot configuration for replacement parking.

 

Finally, a new law (SB 1226) effective January 1, 2019 provides a path to legality for ADUs built without a building permit, by complying with building standards in effect at the time the unit was constructed.

[i] Elizabeth Kneebone and Mark Trainer, How Housing Supply Shapes Access to Entry-Level Homeownership, Terner Center for Housing Innovation, Berkeley, 2019. Elizabeth Kneebone and Mark Trainer, How Housing Supply Shapes Access to Opportunity for Renters, (Berkeley, Terner Center for Housing Innovation, 2019).
[ii]Chapple, Karen, Jake Wegmann, Alison Nemirow, and Colin Dentel-Post. “Yes in my backyard: Mobilizing the market for secondary units.” (Berkeley, Center for Community Innovation, 2012).
[iii]Jonathan Woetzel, Jan Mischke, Shannon Peloquin, and Daniel Weisfield, A Tool Kit to Close California’s Housing Gap: 3.5 Million Homes by 2025, (New York, McKinsey Global Institute, 2016, https://www.mckinsey.com/~/media/McKinsey/Featured%20Insights/Urbanization/Closing%20Californias%20housing%20gap/Closing-Californias-housing-gap-Full-report.ashx
[iv]Notable exceptions are Portland and Vancouver. See Chapple, Karen, Jake Wegmann, Farzad Mashhood, and Rebecca Coleman. “Jumpstarting the market for accessory dwelling units: Lessons learned from Portland, Seattle, and Vancouver.” (2017).
[v]For examples, see http://www.accessorydwellings.org.
[vi] Chapple et al. 2012.
[vii] IBID.
[viii] There are 15 ADU requirements assessed. However, the Maximum Size for Attached ADUs is graded separately from the Maximum Size for Detached ADUs, given that there are commonly different maximum size limits imposed based on the proposed unit typology. This created 16 total individual grading criteria.
[ix] Presumably, by following state standards, they deserve a good grade; but without the ordinance, we have insufficient evidence to assess their implementation.
[x] Jurisdictions received extra credit for Parking Requirements for ADUs if they reduce parking barriers beyond what is required in CA ADU law. For example, not requiring parking for ADUs that are studios (with zero bedrooms) or allowing parking in tandem and/or setbacks. We also gave jurisdictions extra credit for Maximum Size for Attached and Detached ADUs if they did not include the language limiting the maximum size percent increase for either or both criteria. This is another indicator that the jurisdiction is reducing barriers to ADU development.
[xi] In this report, we organize our findings using the regions designated by California’s Tax Credit Allocation Committee, available here: https://www.treasurer.ca.gov/ctcac/apportionment/presentation.pdf. We modify the geographies slightly; for instance, we present San Francisco as part of the Bay Area region, not as a stand-alone geography.
[xii] A JADU is an independent living unit of less than 500 square feet carved out of a single-family residence via the conversion of an existing room.