Unpermitted ADU surge

[Reese Shulman]

The San Francisco Bay Area housing shortage has prompted a lot of homeowners and investors to add Accessory Dwelling Units (ADUs) to their properties. A Stanford study revealed that over 75% of the ADUs built in San Jose between 2016 and 2020 did not have a permit and are therefore illegal housing units.

The lengthy permitting process, high construction costs, and shortage of tradespeople are some of the factors motivating property owners and contractors to take on the risk of building, renting to tenants, and/or housing family & friends in an illegal unit.

[Dan H.]

With SB13 allowing bootlegged safe units and the likely extension to the 5 year window due to the shortage of units, I am unsure there is much risk in the near term.  

Never the less, if I was adding an ADU, I would add it with permits etc. to have a legal unit. However, buying a safe bootlegged unit at the price that reflects unpermitted work could be tempting.

Best wishes