People looking to buy a starter home in Berkeley may be able to purchase a backyard cottage as an independent condo by mid-2025 under a new local policy on accessory dwelling units.
Berkeley City Council unanimously voted last week to opt-in to state Assembly Bill 1033, which lawmakers passed last October to allow homeowners to sell ADUs like condominiums. ADUs include “granny flats,” garage conversions and other types of units attached or unattached to the main single-family home, duplex or multiplex.
According to Councilmember Rashi Kesarwani, who authored the resolution, Berkeley is the first city in the state to adopt the law. She said it paves the way for “entirely optional” sales that could allow homebuyers to build equity in an otherwise unapproachable landscape.
According to the state Department of Housing and Community Development, 95 Berkeley ADUs were permitted in 2023, in addition to 602 since 2016. The number of permits each year shot up in 2016 after the state passed laws to ease the path for building ADUs.
In Berkeley, the median home sale price is about $1.4 million, according to data from real estate sites, with an average price of $803 per square foot. ADUs in Berkeley range from micro-units to 2-bedroom homes of 1,000 square feet, meaning the price tag for an ADU-turned-condo could be between $200,000 and $800,000.
Kesarwani said she has a constituent in West Berkeley who built a 500-square-foot backyard unit for their adult child. She said the new policy opens up many possibilities for this homeowner and their children, who could now sell the ADU.
“Maybe (the child’s) income grows and they may choose to get a different home, or they may choose to remain in that smaller backyard cottage and build equity and get their piece of the ‘California Dream,’” Kesarwani said.
Or, she said the property owner could sell the “naturally” cheaper home — due to its small size — to a healthcare worker, teacher or other community member.
While the change lessens the control property owners and neighbors have over nearby lots, she stressed that most ADU set-ups are already familiar and commonplace.
“I don’t want people to presume that this is somehow an invasion of privacy or a big change from what’s already happening,” she said.
The city still needs to clarify many details, like how trash service and utilities would be managed. Staff will work over the next year to update the city’s ADU ordinance.
The new policy would require the creation of a homeowner’s association to manage all utilities and maintenance. The properties, now regarded as two separate condos, would also have separate property taxes.
Oregon, Texas and Seattle were some of the first states to “condo-ize” ADUs earlier this year.