A homeowner in Oakland recently contacted New Avenue about permitting an unpermitted ADU on his property.
He bought the home in 2012. Seeing the value an accessory dwelling would add to the property, he built two.
Just as every homeowner on the block had done, he converted the existing garage, creating both a one-bedroom unit and a studio unit. It was a great idea, in theory. Homeowners in California have the right to add two accessory dwellings to their existing homes, and additional units can mean so much: more space for family, rental income, and increased access to housing.
There was just one problem. When the homeowner built his ADUs, he didn’t go through the full permitting process with the city. Working to follow current building codes, he left 50% of the garage’s walls in place, gutted the structure, and converted it into two units, both with bathrooms and kitchens.
He planned to rent out all three units, including the main home. To do so legally, he would need to get the new ADUs permitted, and that meant taking several steps back before moving forward.
Why not rent out an unpermitted unit?
This Oakland homeowner assumed everything would be OK if he followed the building codes to ensure his tenants’ safety. But safety isn’t the only issue.
In California, if you rent out an unpermitted unit, you don’t have the right to collect rent payments. Any contract you’ve made with your tenants is unenforceable, and you may not even be able to evict them for nonpayment.
Being the landlord of an unpermitted unit sets you up for a whole slew of legal predicaments.
The legalization dream (or nightmare, depending on where you live)
Getting permits for your already-built ADU can be simple or incredibly difficult, depending on your city’s rules.
San Jose, for example, has just approved an amnesty program for illegal ADUs. Homeowners can apply for permits easily, and many of the costs will be waived, saving applicants around $6000 each. San Francisco, Santa Cruz County, and San Mateo County have similar amnesty programs. With these programs, the application process is streamlined, safety inspections are easier to do, and waivers for non-safety issues are easier to get.
Local governments like San Jose, San Mateo County, Santa Cruz County, and San Francisco recognize that permitting illegal ADUs will help ease the housing crisis and improve life for both owners and tenants.
Unfortunately, most local governments are not yet on board.
In Oakland, New Avenue visited the city offices to learn more about the Oakland ADU owner’s problem. Our designer discovered that the homeowner will need to do a few things to get permits for his illegal ADUs:
- Do a survey and as-built drawing.
- Apply for the permit through the Zoning and Planning Department and the Building Department.
- Apply for creek protection permits because the property is in the RD-2 zone.
- Expose most of the walls’ structure to inspect the electrical work and other permit requirements; photos taken during construction are not sufficient.
- Pay additional fees. (When the construction is completed before permitting, the fees are nearly double.)
This is a lot to take on in both time and money. He’ll have to tear his new ADUs apart and pay double fees.
With the expenses and headaches involved in getting post-construction permits, it’s no wonder there are so many unpermitted accessory dwellings. (After all, everyone on our Oakland client’s block has at least one.)
Is it better to ask forgiveness than permission?
In homebuilding, the answer is a resounding no, especially for rental properties.
It’s always better to get permits before construction. A good designer will make this as easy as possible and could save you thousands of dollars.
But that doesn’t mean that all is lost if you have an unpermitted ADU.
I have an unpermitted ADU. What should I do?
First of all, don’t panic. Tens of thousands of ADUs are unpermitted, and laws are becoming more ADU-friendly all the time.
If you live in an area that makes it easy to get permits, great. We say go for it. Having a certificate of occupancy for your ADU will put your mind and your tenants’ minds at ease and protect you from the legal trauma that can arise from renting out an unpermitted space.
If you live in one of those cities that makes it harder, consider your options.
One option is to go ahead with the permitting process if you have the money to spare. It’s always best to have a permit, and a good designer who has experience in your city can help you legalize your ADU now.
Another option is to wait. We expect more cities to follow the example of San Jose in the coming months and years, so an amnesty program could be in your future.
Oakland has been very supportive of new ADU construction. New Avenue will continue to work with the city to improve the issue of legalizing existing ADUs. We are very positive and excited about the prospects for Oakland. They have a hard job getting their own laws changed and they are doing it.
What about safety?
Regardless of your approach, remember that safety is what matters the most. Even if you plan to wait for permitting, it’s a good idea to get a licensed person to check your wiring and egress to protect your family, your tenants, and your investment.
So what will happen to that Oakland homeowner?
The saga goes on, but it doesn’t look good. Instead of renting out his main home and two ADUs to three tenants as he’d planned, this homeowner will likely sell the property to a contractor who will turn it into a high-priced single-family home.
What is now three homes for three families will be reduced to one luxury house for a multimillionaire.
It’s the easiest and most cost-effective way to handle this case, but it’s not what the owner wanted for his property.
Your most powerful asset at the permitting office
When working with your city to get permits for an ADU, the smartest move is to rely on a true expert.
At New Avenue, we’ve been actively involved in permitting for years. We’ve helped shape laws and worked with city governments to effect change. Our experts have guided our clients through every step of the permitting process, in many cases saving them thousands of dollars.
Talk to us today about legalizing your ADU or building a new one.