Berkeley residents could start selling their accessory dwelling units as condominiums within
the next year, as the City Council becomes one of the first in California to embrace such a change. Assembly Bill 1033 (AB 1033), a law authored by Assemblyman Phil Ting, D-San Francisco, took effect at the beginning of this year, allowing residents to sell ADUs as condos separate from their primary home.
The Berkeley City Council directed city staff to draft an ordinance authorizing the sales, pointing to the need to make homeownership more accessible in one of the Bay Area’s most expensive markets. Berkeley appears to be the first city in California to opt in to AB 1033, according to Louis Mirante, vice president of public policy at the Bay Area Council, a business-backed advocacy group that promoted the law.
San Jose is also considering implementing it. The San Jose City Council asked planning officials in December to bring them options for opting into AB 1033, with staff scheduled to present their recommendations in June.
“I think it’s a great opportunity for people to buy their first home that is relatively affordable and get their piece of the California dream,” Ting said.
Berkeley Council Member Rashi Kesarwani, who led the city’s push to adopt AB 1033, said she expects the ordinance legalizing ADU sales to come to the City Council “within a year.” She envisions teachers and health care workers being able to buy 500-square-foot homes in Berkeley, where the typical home is valued at nearly $1.5 million, according to real estate brokerage site Zillow.
Parents could also transfer an ADU-turned-condo to their adult children, allowing them to build equity. “Housing costs have grown so high, so rapidly that the shortage of homes … affects everyone, now, regardless of income,” Kesarwani said. Kesarwani also stated it’s unclear how many residents will take advantage of AB 1033. Though California lawmakers have pushed ADUs as a partial solution to the state’s housing crisis for several years, not everyone will be able to use the new law, even if their city implements it. Building an ADU can be expensive for lower and middle-income homeowners. Also, AB 1033 requires a homeowner, who is part of an existing homeowners association, to get permission from the association before converting the ADU into a condominium.
“It’s really going to be exciting to see what the impact is, (but) I’m not sure how frequently it’s going to be used,” Kesarwani said. About 410 ADUs were built in Berkeley from 2019 to 2023, including 90 last year, according to data from the California Department of Housing and Community Development. San Jose built about 1,310 ADUs since 2019, including 330 in 2023. ADU construction has exploded in California, with nearly one in five homes built being an ADU, according to the state housing department, and lawmakers passing laws making it easier to build the units.
Homeowners tend to be very supportive of ADUs —even in neighborhoods that would oppose other developments such as a duplex—said Matthew Lewis, director of communications for California YIMBY. That has him confident that AB 1033 will prove to be “a very popular initiative.” “Berkeley was not great on this as recently as four to five years ago,” Lewis added. “It was almost impossible to build an ADU.” Lewis emphasized that while ADUs add to the for-sale housing stock, they aren’t a “silver bullet”against the housing crisis. But he also believes the rise of ADUs is starting to persuade homeowners that having more neighbors isn’t a bad thing.
“There’s a culture and mind shift that ADUs are definitely helping to achieve, which is the fundamental recognition that adding more homes to a neighborhood is actually completely innocuous,” Lewis said.
Reprinted from Berkeleyside.org and with permission of the Small Property Owners of San Francisco Institute (SPOSFI) News. For more information on becoming a member of SPOSFI or to send a tax-deductible donation, please visit their website at www.smallprop.org or call (415) 647-2419.