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of conversation over the past
ultifamily Property Owners
By Basil Starr and Manraj Multani, The Palari Group
ccessory Dwelling Units (a/k/a, ADUs) have been a hot topic
• The addition of two detached ADUs on the same lot containing existing multifamily dwellings, which ADUs can be up to 16 feet in height and must have at least 4-foot rear and side setbacks.
Another major change includes a faster review process. Local agencies must act on an application within 60 days (reduced from 120 days) and the application is deemed approved if not acted upon within such timeframe. Local agencies also cannot impose a minimum lot size or, until January 1, 2025, an owner-occupant requirement to construct an ADU.
Adding ADUs to your apartment building is an excellent way to add value and make the highest and best use of your existing multifamily property investment. In fact, ADUs are one of the safest investments you can make as they provide financial security in a slowing housing market or economic downturn. While construction may be somewhat expensive, the value created based on increased rental income makes it profitable investment. Imagine increasing the number of your rental units by 20% – 40% without buying any new properties! It is also a great opportunity to make other improvements that will make your overall property more attractive to potential tenants.
• Increased Income – By adding an accessory dwelling unit or “ADU” to your property, you are adding another rentable unit and increasing your monthly rental income and cash flow. Please turn to page 86
few years as California tackles the challenge of building new housing in areas that are high in demand and low in supply.
California regulators have found ADUs to be a newfound solution to this housing crisis as they provide a potential income opportunity for current homeowners while providing an affordable place to live for renters. As a result, “ADU law has been revised to improve its effectiveness at creating more housing units, reducing barriers, better streamlining of approval processes, and expanding capacity to accommodate the development of ADUs and Junior Accessory Dwelling Units,” said David Crompton, Chief of Planning at the City of Danville, California in a report to that City’s City Council.
Whether you are looking to build an ADU or rent one, here’s what you need to know about the major changes that went into effect January 2020. The biggest opportunity for multifamily owners is found in Government Code Section 65852.2(e), which was expressly amended to provide for the ministerial and administrative (e.g., environmental barriers per CEQA or public hearings) approval of ADUs for multifamily owners in the following two instances (with no local limits):
• The conversion of unused space within existing multifamily structures to ADUs, such as storage rooms, boiler rooms, passageways, attics, basements, or garages, for a total increase of up to 25% of the existing multifamily dwelling units, and

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