Current law allows one or more Accessory Dwelling Units (ADUs) on any parcel that allows a house, but so far ADUs in Sonoma Valley are not delivering affordability. Often ADUs are not rented on the open market, but instead used for family members, visitors, or parties. When ADUs are on the open market, they command rents too high for middle- or lower-income people who live or work in Sonoma Valley. 

Yet, it should be easier to create affordability in ADUs than in many homes, because ADUs are mostly smaller in size, ranging from 500 sq ft to 1200 sq ft. Sonoma Valley has many properties that can accommodate an ADU or two, compared to limited opportunity for infill development on greenfield properties.

Several avenues should be pursued to increase the affordability of Sonoma Valley’s ADUs:

Provide Pre-Approved Plans for Modular and Prefab ADUs

Reduce the cost and time required for permitting and building ADUs by pre-approving a range of lower-cost building plans. The City already has pre-approved conventional stick-built ADU plans.

Provide Tax Incentives or Vouchers for ADUs Rented Affordably

Anecdotally, many people in Sonoma Valley appear to be interested in building an ADU to rent out affordably, so they can feel they are helping resolve the local housing crisis, but they cannot afford to do so without assistance. To establish an incentive program for below-market rental ADUs, the City and County would have to develop affordability criteria and accountability measures. The local governments would need a cost-benefit assessment to understand whether this program would add enough affordable units to offset the direct costs (foregone tax revenue or new voucher payments)to their jurisdiction, plus the cost to develop, publicize, monitor, and enforce the program.

  • Allow the separate sale or conveyance of an ADU from the primary residence, as allowed by AB 1033. AB 1033 can help create a more affordable option among for-sale housing options. It also can help property owners generate additional income or to downsize while still living on their original property.

     The major provisions of AB 1033 are:

    • Allows ADUs to be sold separately from the primary residence, as a standalone unit, similar to a condominium.  

    • Specifies that ADUs can be converted into condominiums, creating separate property titles for the ADU and the primary residence.  

    • Grants local governments authority to adopt ordinances that permit the separate sale of ADUs while complying with local zoning and building codes. 

    • Affordability: AB 1033 does not require owner occupancy, which would be a good way to curb corporate speculation of housing units that aren’t subject to an affordability covenant. It appears that owner-occupancy requirements can be instituted for ADUs after January 1, 2025. 

    • Mortgage and Title Concerns: AB 1033 does not address how the sale of an ADU might affect existing mortgages or titles. Homeowners considering selling an ADU should consult with a real estate professional to avoid potential complications, such as triggering the due-on-sale clause of their mortgage.

    • Regulatory Landscape: The bill's broad language has raised concerns about creating loopholes for new construction standards and complicating homeowner relationships with federal loan terms. There's a risk that without clear guidelines, the process of selling or conveying an ADU could become fraught with legal and financial challenges.

    • Conflicts with existing zoning code. For example, the City would need to change the zoning code, for example to allow “flag” lots that currently are banned.

    Local governments need to take action if they want to use the provisions of AB 1033. This is a new program in California, so the City and County should examine the experience of San Jose, Seattle, Oregon, and Texas before adopting something. 

    In addition to the housing policy partners regularly operating in Sonoma Valley, the Napa Sonoma ADU Center may provide advocacy support and help craft template resolution language.

  • Because ADUs are already allowed on so many parcels, it would be smart to understand better what changes would be most effective at reducing the rental price of ADUs. A survey of ADU owners, or more generally of residential real estate owners, could reveal their motivations and price points.