Since San Jose recently became the first city in California to allow the sale of accessory dwelling units (ADUs) like condos, affordable housing advocates say it increases the supply of living spaces for residents that were previously priced out.
The state long restricted the sale of ADUs — also known as granny flats and backyard houses — as detached residences until Gov. Gavin Newsom signed Assembly Bill 1033 last year, allowing cities to break away from the ban. With more than 1,400 new ADUs built since 2019 and thousands more in development across San Jose, city leaders are hoping to ease the affordable housing crisis with the help of existing homeowners.
Classifying ADUs as condos to increase homeownership gained traction in cities like Austin, Texas, and Seattle, Washington, Rafael Perez, board president of the nonprofit affordable housing advocacy organization Little House Coalitionhe said. The statewide organization, which works to remove barriers to more affordable and sustainable housing, advocated for AB 1033 and created a model policy that San Jose used to draft its local legislation.
With San Jose adopting the strategy, Perez said more cities across the country will take notice.
“How much does a home sell for in the neighborhood you’re visiting? ADU condos tend to be between 40% and 60% of that price,” he told San José Spotlight. “We’re in conversations with other jurisdictions that are looking toward the San José model to see what needs to be done to implement their own ordinances.”
Todd Langton, executive director of homeless nonprofit Agape Silicon Valley, said he’s excited about the policy. But he’s also concerned about the possibility of large corporations buying up a large number of ADUs similar to the mass purchase of single-family homes across the Bay Area.
“These investors will buy these homes and leave them vacant, and all they’re looking for is appreciation in value,” Langton told San José Spotlight. “Hopefully that doesn’t happen and we ban institutional buyers from these ADUs.”
Most condos in San Jose currently cost less than $750,000, according to real estate listing site Red fin.
They used to be called starter homes, STIMULATE But opportunities for first-time homeowners have dried up as median home prices soar and residential zoning in San Jose remains limited to single-family homes, state policy director Michael Lane said.
Solo 6% of San José’s residential land It is zoned for multi-family housing developments like apartments, and the imbalance continues to put pressure on the city’s housing supply.
“The new ordinance provides the gentle density we need in San Jose without disrupting much of the existing neighborhood, so it blended in very well,” Lane told San José Spotlight. “This provides additional options for both prospective homebuyers and property owners throughout the city.”
Mayor Matt Mahan said AB 1033, which allows cities to launch the sale of ADUs as condos, helps keep the American dream alive for aspiring homeowners.
“San Jose will continue to lead the way, but we can’t solve this crisis alone; I look forward to seeing other California cities follow suit,” Mahan said.
Contact Vicente Vera at [email protected] or follow @VicenteJVera on X, formerly known as Twitter.
