More than 1,400 ADUs have been built in San José over the past five years, and thanks to a new law, they can now be sold as separate condo units. Spotlight explores how this new law could change the definition of “starter home.”
At a recent economic seminar with the Silicon Valley Association of Realtors (SILVAR), we learned about changes to real estate law beginning January 1st. We’ll have a full update next week, but in the meantime, let’s focus on four new policies…
Under current law, you’re allowed to build an ADU (aka Accessory Dwelling Unit) based on your lot size and zoning regulations in your particular city. Starting in the coming year, you’ll be able to sell an ADU with your lender’s consent and other additional restrictions. Even better, the limit for small real estate claims will jump from $10,000 to $12,050!
Starting next year, the environmental hazard information you receive from realtors will have new additions about sea level rise, wildfires, and climate change. Also, if a home has been owned for less than 18 months and has a major renovation, the seller not only has to disclose the changes they made and contacts of subcontractors but also the status of all permits.
As people on the verge of retirement consider the considerable costs of staying in the Bay Area, one senior decided to take advantage of updated rules and added an ADU in her backyard that will generate enough income for her to age in place.
The Mountain View Voice has the story.
Savvy home buyers willing to spend a little more in the short term could reap a tremendous long-term reward by investing in a single-family home with an existing ADU — perfect for renting out one home while you live in the other!
Have a look at some properties that fit the bill.
According to a new analysis by Porch.com, ADUs are becoming a trendy response to the housing affordability crisis in California and the Bay Area. As of 2019, there were 1.4 million homes with an ADU nationwide, and that number is growing by 100,000 per year.
One reason for the rise is the impact that ADUs have on property values. Across America’s largest cities, homes with ADUs averaged 35% higher prices than those without. But with the average cost of an ADU in the range of $180,000 — and as much as $400,000 in the Bay Area — it may not make dollars and sense for you.
Learn more from the National Association of Realtors and contact us for a consultation.
