In an effort to tackle California’s affordable housing crisis, San Jose will allow property owners to sell ADUs on their property.
San Jose becomes the first city in the state to move forward with the effort after the Legislature passed AB-1033 last year.
“They've become an incredibly popular option,” said San Jose Mayor Matt Mahan. “They've become one of the most common permit types for new home construction. They're arguably the most accessible form of home ownership available, and this just creates another option.”
Both parties partaking in the deal would have to form a homeowner's association and create an agreement for how the property will be cared for. They would then have to notify the utility companies that one property has effetely been split in two.
Each owner would pay their own property taxes and utilities. However, questions about how to go about the sales remain at large.
Some Bay Area realtors said they are concerned with how lenders will handle homeowners selling part of the original house before the mortgage is paid off.
Last year, San Jose issued over 460 permits allowing property owners to build ADUs on their existing property.
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While many realtors said they are going to avoid those deals all together, Holly Barr, a real estate agent with Compass, said it could be the only way for some to own a house in a sky high housing market.
“Teachers, firefighters, police officers, our service people, this is their foot in the door,” Barr said. “The 20-something who just started at a big company, 'I need to live here and I don't want to live in a condo.’ There's always going to be sellers willing to make money, and if they want to stay in their house and sell part of their house to be able to stay in their house. I also think we're always going to find buyers who are going to want to buy something that's a little less expensive.”
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If approved after a second reading, the bill would take effect July 18.
