Large ADU dilemma

[Kalanie Tran]

I recently purchased a SFH in highland village that comes with a huge ADU about 800sqft on top level, and 800sqft on bottom. Top level is already mostly done and in turnkey condition, rent ready. Bottom, still needs work. My question for local folks, how strict is the city in terms of permitting and allowing the use of ADU as a rental? I was told by the city employee that even if I got a permit for the property, only the owner can live in it. That seems weird to me, I mean…why does it matter if owner live in it, or if it's a rental? If caught unpermitted, what's the worse scenario?

I appreciate any local insights on this..