ADUs Sold as Condos - Soon to be Seen in Berkeley

February 23, 2025

Soon after the passage of California’s Assembly Bill 1033, which allows municipalities to craft their own rules for ADU sales, Berkeley became the first city to opt-in to the program.

This move could be a game-changer in the city’s ongoing efforts to address its housing shortage while providing new financial opportunities for homeowners.

ADUs, often built as separate, smaller units on a homeowner's property, have grown in popularity due to their ability to increase density without requiring large-scale new development. Still, the up-front investment often doesn't pencil out for the property owner, if the ADU can only be used as a rental. Or even if the finances are appealing, many Berkeley homeowners would simply not choose to be landlords.

The potential to sell ADUs as separate condos will certainly broaden the appeal of ADU construction.

The potential for ADUs to be sold individually as condominiums increases their market value, especially in an expensive city like Berkeley where even small units can command high prices.

This legislation could also provide a new form of entry-level housing in a city where affordability is a growing issue. For first-time buyers, especially those struggling to find housing at a reasonable price, the availability of standalone condos in ADUs offers a unique opportunity to enter the market. Making it easier to sell ADUs could give more people a chance to own property in Berkeley.

Additionally, the move could help homeowners, particularly seniors, generate income by selling the ADU or by downsizing to a smaller home.

Since the proposal was passed last year, the city has been working on logistical details such as how trash and other utility services would be managed. Once that is complete, home owners can begin to make use of the new law, and homebuyers can look for some fresh inventory in the market place.

Does your property qualify for the addition of an ADU? Check the city's basic guidelines and FAQs here.