Want to build a ‘granny unit’? Here’s how new rules affect SLO County homeowners
Could a new housing boom be coming to the backyards of San Luis Obispo County?
In response to a 2020 change in state law designed to encourage construction of less-expensive housing, the county and local city governments are adjusting their accessory dwelling unit regulations.
Accessory dwelling units are also commonly called ADUs or “granny units.”
SLO County jurisdictions are adjusting local laws to adhere to state legislation, and additions of secondary homes on properties could provide a new source of income for property owners.
A primary change in the new law is that owners won’t be required to live on their property to have a secondary dwelling, opening the door for property investments among those who don’t want to share yard space.
Under the old state law, local jurisdictions could require owners to live on the property, which SLO had enforced until this year.
“I think a lot of people will be applying for ADUs because of the removal of the owner occupancy requirement,” said Lindsey Harn, a SLO-based Realtor, who owns a home with a secondary dwelling. “It will be interesting to see if the city can keep up with applications.”
How California housing law has changed
State accessory dwelling units (ADUs) laws changed with Gov. Gavin Newsom’s signature on four bills that became effective Jan. 1.
The legislation includes a variety of new provisions, such as: more lenient parking requirements, larger secondary dwellings, and a faster mandated planning review process.
Local governments such as the city of SLO and SLO County already have adjusted their policies to conform to California’s law, adding measures allowable within the new framework.
Other local cities in the South County and North County will be tackling their ordinances over the next few months.
Some of California’s changes to streamline building include:
▪ No owner occupancy requirement in connection to any ADU applications until 2025
▪ Restricting a city’s ability to require replacement parking when a garage or carport is converted or demolished to create an ADU
▪ Requiring that ADUs be reviewed within 60 days when consistent with stated standards (previously 120 days)
▪ Allowing ADUs to be established on lots with existing multifamily structures
▪ Granting permits without director’s review (called ministerial approval) if a project meets all established city planning and zoning standards when a secondary home is 16 feet in height or less
▪ Limiting the rear and side setback to four feet from the property line.
Additionally, the new state law also allows for a junior accessory dwelling (JDA) unit that’s no more than 500 square feet and contained within a single-family residence. JDAs may include separate sanitation facilities or shared facilities with the existing structure.
“The construction of accessory dwelling units (ADUs) can help cities meet their housing goals and increase the state’s affordable housing supply,” Newsom’s office stated in a press release.
Here’s how local cities are adjusting their regulations to accommodate ADUs:
San Luis Obispo
At its March 2 meeting, San Luis Obispo’s City Council formally amended a host of its ADU laws, which previously required owner occupancy on a property with ADUs, among other restrictions.
The city estimates it will add 30 to 50 new units per year under the new regulations.
During a temporary lapse in San Luis Obispo’s old policy because of a change to state law in 2017, the city received 77 applications for ADUs during a six-month window when no owner occupancy was required, indicating high investor interest.
The city allows ADUs of up to 1,000 square feet as long as applications meet general planning and zoning laws and then up to 1,200 square feet based on planning director review of specific applications and variable individual zoning laws within the city.
The architectural style and form, as well as materials, must match the existing housing on a property.
And the new law allows up to 25 feet in height above existing garages without city planning discretionary review or a public hearing.
Otherwise the city will allow 16 feet and under for secondary dwellings, with the discretion to allow taller buildings with the city planning director’s approval, considering setbacks from neighboring properties and specific height limits under existing SLO’s zoning law.
Previously, San Luis Obispo allowed up to only 800 square feet without additional planning review. No limits on bedrooms are required under new California law.
The balance between not overcrowding neighborhoods, leading to noise and parking issues, while providing needed new housing, has long been a delicate balance for the city.
“I am opposed to easing restrictions on granny units,” said Barbara Atkinson, a SLO resident, in a Feb. 3 letter to the city. “This is like the era of greed where so many backyard units were built — no parking, no land. It’s just not the solution.”
Councilmember Carlyn Christianson sees a shift towards increasing ADU housing overall as a necessity to meet housing demands.
“I think the state eventually may get rid of the single-family residential zoning period, but for right now there still is some expectation from our single-family resident property owners that we’re not going to get too crowded,” Christianson said at a February meeting.
SLO’s sewer lateral replacement policy
In areas of the city where wastewater collection systems are constrained and don’t have capacity to accept additional wastewater flows, San Luis Obispo has a sewer offset program for applicants of new ADUs that allows replacing an old sewer lateral on a neighboring property.
Constrained areas include about 7,000 of the city’s 12,000 private sewer laterals, such as the Laguna Lake area, a core southern section of downtown, and the neighborhood off Foothill Boulevard closest to Bishop Peak.
Piping on private properties is getting old, breaking down and causing unsanitary overflows, particularly in times of very rainy weather.
The city already introduced a policy last year triggering property owners’ replacement of sewer laterals under certain circumstances, such as a change of ownership or building permit applications for a bathroom or kitchen. Sewer later replacements can cost up to $10,000.
“Our plan to address this is multi-faceted, but a big part of the strategy is to deal with inflow from old sewer laterals,” said Michael Codron, the city’s community development director. “During storm events, rainwater takes up capacity in our collection system.”
Cristina Pires, a SLO resident in a wastewater constrained zone, said in an email that she supports the sewer lateral replacement program but not the city’s offset policy when it comes to ADUs in constrained areas.
“What I do not support and am in total disbelief about is the requirement to change out a neighbor’s lateral in order to build on your own property,” Pires said. “... We are adding units to our property in order to afford to live in SLO. And now we have to knock on someone’s door and give them $10,000?”
Codron added it’s always a balance between neighborhood crowding concerns and housing demands, which he said is “evolving.”
“It’s an ongoing issue and an evolution in terms of the housing crisis and the large amounts of areas designated single-family homes,” Codron said. “ADUs are one of the ways to have more housing capabilities.”
SLO County
County supervisors lifted several restrictions on accessory dwelling units in response to the state law on Jan. 28, making it easier for property owners to build secondary homes as large as 1,200 square feet in unincorporated areas such as Los Osos, Cambria, Cayucos, Santa Margarita and Nipomo.
The old ordinance only allowed accessory dwelling units on lots 6,000 square feet or larger in specific land use zones, and required additional designated parking. Those requirements have all been scratched.
Building in Los Osos has a specific water offset requirement. Those seeking a building permit have to complete projects that save 150 gallons per day within the Los Osos Groundwater Basin for each accessory dwelling unit. That could look like retrofitting old washing machines, for example.
The new ordinance will go into effect for inland areas of the county starting Feb. 28. Unincorporated areas in the coastal zone will not be effective until the regulations are approved by the Coastal Commission.
South County cities
Each South County city is in the midst of developing new accessory dwelling regulations.
Jeff Winklepleck, Pismo Beach’s community development director, said that over the next few months, the staff will need to figure out how to create new city standards that also meet Coastal Commission laws, since the new policy will require Coastal Commission review.
Winklepleck said Pismo Beach hasn’t received many ADU applications in recent years.
“We have a handful every year,” Winklepleck said. “Lots are fairly small here. Unless you’re converting a garage, there’s not a lot of room to drop these things in.”
Grover Beach City Manager Matt Bronson said the city is working on a revised ADU ordinance reflecting updated state laws with plans “to take it to our Planning Commission in March and City Council in April.”
The city will be looking at a variety of issues including height, colors and materials, said Bruce Buckingham, Grover Beach’s community development director.
In Arroyo Grande, the city is still developing the details of “what the City Council will consider with respect to changes to the city’s ADU ordinance.”
“The details of the ordinance amendments will also be based on input from the Planning Commission,” said Whitney McDonald, the city’s community development director, in an email. “We are aiming to have a discussion before the Commission within the next month or two.”
McDonald said it’s “unknown whether the ordinance changes will address height, colors or materials,” but added certain changes regarding setbacks will likely be necessary due to the recent state legislation.
North County cities
In the North County, neither Atascadero nor Paso Robles have moved forward with new accessory dwelling unit policies, although updates are on both cities’ radars this year.
“We have been considering updates to our ADU code for a while now,” Phil Dunsmore, Atascadero community development director, said in an email. “The state keeps changing the laws, so it’s good that we have waited.”
Atascadero leaders would like to start working on an update this year, Dunsmore said. However, the city has additional priorities, including revising its Housing Element and planning to possibly narrow El Camino Real down to two lanes.
The city currently allows accessory dwelling units of up to 1,200 square feet, Dunsmore said.
Paso Robles is also hoping to consider a revised ordinance later this year. City staff and the city attorney are still reviewing all of the state changes, said Warren Frace, community development director.
The city is already complying with the state’s fee waiver requirement, Frace said.
A homeowner’s ADU perspective
Lindsey Harn, a Realtor with San Luis Obispo-based Richardson Properties, owns a property near Cal Poly that she rents to students.
In 2017, she applied for an ADU permit during a temporary period when state laws changed and owner occupancy wasn’t required during an interim period until SLO’s council adopted a new owner occupancy requirement (now undone by the new state law).
Harn said that her conversion of an illegal garage to a two-bedroom, one bathroom secondary dwelling made good financial sense, and has worked out well.
Her upgrades using a licensed contractor improved the living space by adding insulation, heating and cooling, and bringing it to code.
Harn said she rents her ADU for $1,600 per month and she spent roughly $80,000 in construction and permitting.
“I love it,” Harn said. “The benefits outweigh the costs. It has made this property safer and more habitable.... And if you can build an ADU that pays for half of your property’s mortgage (through rent), that makes good financial sense.”
Don Love, an Atascadero-based architect, said he has seen garage conversation costs come in at around $100,000 but costs depend on the age of the property and needed work.
Love said that on the cheaper end of detached ADUs he’d project between $150,000 and $250,000, and bids have come in at more than $300,000.
Love added that costs also depend on egress (tenant entry in and out), and building complexities such as leveling floors and any need to add sewer lines.
San Luis Obispo County permitting, inspection and plan check fees generally amount to between $3,000 and $5,000, Love said.
The average building permit fee cost for the five most recently issued ADU building permits in SLO is $6,586, said Vanessa Nichols, the city’s permit services coordinator.
But contingencies such as archaeological studies can add cost and time, builders say.
“I’ve gotten five jobs on ADUs in the last two weeks, especially some close to Cal Poly’s campus, where the rent pencils out,” Love said. “I understand the concerns people have with parking, but we’re also in a housing crisis now. I think it will work itself.”
This story was originally published March 5, 2020 at 5:15 AM.
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