Terner Center Blog: No Limits

Regulating ADUs in California: Local Approaches & Outcomes

Posted on by Deirdre Pfeiffer

This is the second installment in a working paper series that utilizes the Terner Center California Residential Land Use Survey to assess the implications of California’s state and local policy for housing. The working paper series is published jointly by the CALIFORNIA ASSOCIATION OF REALTORS®’s Center for California Real Estate and the Terner Center for Housing Innovation at UC Berkeley. This paper series will examine a number of topics related to land use regulation; from the feasibility of ADU production to trends in segregation. Read the full paper here.


Regulating ADUs in California: Local Approaches and Outcomes

By Dr. Deirdre Pfeiffer, Associate Professor at Arizona State University and Visiting Scholar at the UCLA Ziman Center for Real Estate


Accessory Dwelling Units (ADUs) are often cited as an untapped housing type in the push to increase housing supply and improve affordability. These small units—typically built on lots with an existing single family home—can densify the single-family neighborhoods that dominate California cities and often house caretakers, family members, or renters at more affordable rent levels. Despite the rising prominence of ADUs, little is known about the types of communities that build them or how local policies can incentivize or stymie their production.

To explore these questions, I relied on ADU regulation and permitting data from the Terner Center California Residential Land Use Survey. I constructed an ADU Regulation Index, which measures the relative restrictiveness of California localities by compiling data on minimum lot size ratios, maximum unit size, off-street parking spaces required, and fees exacted on ADUs. I found:

Localities display three distinct approaches to ADUs

Localities with different demographic and housing market conditions treated ADUs differently. My research uncovered three community types:

  1. Threatened and Restrictive: Localities with lower household incomes, declining incomes in the 2010s, lower housing values, higher rates of poverty, and higher proportions of Latinxs tended to have the most restrictive regulations on ADUs. These localities, which represented an estimated 32% of California localities, processed ADU applications less frequently than the rest of the sample.
  2. Prosperous and Moderate: Only an estimated 14% of localities fall into this category, which consists of the most advantaged communities. These places house higher proportions of Whites, Asians and Pacific Islanders, and seniors, and typically implement more moderate restrictions on ADUs.
  3. Diverse and Flexible: The most common category (an estimated 54% of localities) captures places that are whiter and wealthier than the Threatened and Restrictive communities, but more diverse and less advantaged when compared to Prosperous and Moderate localities. These communities were the most likely to have adopted an ADU ordinance and processed ADU applications more frequently.

ADU regulations varied by geography

Mapping the regulatory restrictiveness of localities, as measured by my ADU Regulation Index, surfaces a radiating pattern. Localities located farther away from urban hubs like Los Angeles and San Francisco, as well as jurisdictions in the Central Valley, were more likely to be restrictive.

Figure 1: ADU Regulation Index

Source: Mawhorter & Reid (2018)

Jurisdictions with adopted ordinances and less restrictive regulations permitted more ADUs

Controlling for key characteristics, localities that adopted ADU ordinances were twice as likely to have frequent ADU applications than those without. Similarly, localities located in the top quartile of the ADU Regulation Index—indicating lighter levels of regulation—were 67% more likely to have frequent ADU applications than those in the bottom quartile.

The frequency of ADU applications is not significantly associated with housing affordability or aging in place

I did not find a statistically significant relationship between the frequency of ADU applications and housing affordability or the rate of aging in place. Theoretically, localities with higher housing costs could see more demand for housing units, including ADUs, which may obscure any affordability-promoting effects. Longitudinal research is needed to explore this relationship in more detail.

Policymakers can take concrete steps to encourage ADU production

My research surfaces three takeaways for policymakers wishing to incentivize ADUs and promote housing affordability:

  1. Policymakers should build tools to support different types of communities. More research is needed to investigate what motivates the varying approaches to ADU regulation. The diversity of California communities means that policymakers may need to use a range of tools to encourage ADU production.
  2. Localities can incentivize ADUs by passing ordinances with less restrictive regulations. Localities with ADU ordinances and lighter restrictions received more ADU applications, and my research surfaced a particularly strong relationship between waiving off-street parking requirements and the frequency of ADU applications.
  3. ADU production represents one tool of many to improve housing affordability. Localities can also implement policies that show statistically significant effects on rental affordability, such as affordable housing construction.

New Amendments to SB 50 Change Approach to Identifying “Sensitive Communities”

On April 24, SB 50 went before the Senate Governance and Finance committee. While it passed the committee 6-1, the resulting amendments made significant changes to the bill. Some of the biggest changes include what is essentially a carve out for smaller counties like Marin and Santa Barbara as well as a reduction in the number of bus stops that would meet the “high quality” transit requirements.[1] In this blog, we focus on a third major change: the definition and implementation of the “sensitive communities” provision in the proposed law. The goal underlying the “sensitive communities” provision in the bill…


Calibrating Policy to Ensure Success—An Analysis of Assembly Bill 1485

Posted on by Terner Center

The 2019 California legislative session has been a busy one for housing thus far. Dozens of bills have been introduced that aim in some way to alleviate the ongoing housing challenges across the state. It seems likely that this year’s package of housing bills could rival the 2017 housing package, depending on how upcoming committee hearings and negotiations progress. Some of the bills proposed so far could have significant impacts on our ability to build new housing. To this point, it is critically important to understand how to ensure new policies can achieve their goal of facilitating more housing development…


Housing Policies in California Cities: Seeking Local Solutions to a Statewide Shortfall

Posted on by Sarah Mawhorter

This is the first installment in a working paper series that utilizes the Terner Center California Residential Land Use Survey to assess the implications of California’s state and local policy for housing. The working paper series is published jointly by the CALIFORNIA ASSOCIATION OF REALTORS®’s Center for California Real Estate and the Terner Center for Housing Innovation at UC Berkeley. This paper series will examine a number of topics related to land use regulation; from the feasibility of ADU production to trends in segregation. Read the full paper here. Housing Policies in California Cities: Seeking Local Solutions to a Statewide…


Unpacking the Growth in San Francisco’s Vacancies

Posted on by Paige Dow

As part of our commitment to the education and professional development of UC Berkeley students, the Terner Center highlights exceptional student work that connects to our mission and research agenda. The analyses and policy proposals put forth in these projects may not be reflective of the official position of the Terner Center. This piece is the fourth in a series by recent graduates of the City and Regional Planning and Public Policy graduate programs at UC Berkeley. The full report is available here. High vacancy rates typically signal a weak housing market, where supply has outrun demand, and rents have stagnated. However,…


Estimating the Impact of an Anti-Gouging Rent Cap in California

Posted on by Terner Center

Last spring, the Terner Center published a brief on a handful of tenant protection ideas in California titled “Finding Common Ground on Rent Control.” The brief discussed policy ideas for consideration as an alternative to the prevailing “all or nothing” dialogue on the repeal of the Costa-Hawkins Rental Housing Act--a state law that places restrictions on local rent control ordinances. Proposition 10’s defeat at the ballot box has meant that the fight over repeal has passed for the time being. But the conversation around what to do in the face of resounding tenant pressures has not. In fact, the ongoing…


The End of the Mortgage “Dark Age”?

Posted on by Alison Mills

As part of our commitment to the education and professional development of UC Berkeley students, the Terner Center highlights exceptional student work that connects to our mission and research agenda. The analyses and policy proposals put forth in these projects may not be reflective of the official position of the Terner Center. This piece is the fourth in a series by recent graduates of the City and Regional Planning and Public Policy graduate programs at UC Berkeley. The full report is available here. The End of the Mortgage “Dark Age”? Fintech and the Equity Implications of Disruptive Technology in the U.S. Residential…


Strengthening Feasibility Studies for Inclusionary Housing Policies

Posted on by Terner Center

Paired with other public investments and financing products, inclusionary zoning policies can increase the supply of affordable housing, particularly in high-cost regions. Inclusionary policies work by requiring or offering incentives to developers to include below-market-rate (BMR) units in new housing developments, or pay a fee to an affordable housing fund in the city’s budget. These policies also can include offsets to developers, such as density bonuses or permitting streamlining. As Grounded Solutions Network and Lincoln Land Institute identified in a recent study, over 800 jurisdictions in the United States currently have inclusionary zoning programs. Yet these policies can be controversial,…


Announcing New Resources for Understanding Land Use in California

Posted on by Terner Center

Local land use--the accumulated set of decisions and policies about whether, how, and what we build--is a current that runs throughout much of our work here at the Terner Center. Land use policy not only shapes the supply of housing in a region, but is also deeply intertwined with sustainability, economic mobility, and access to neighborhoods and opportunity. Made possible by funding from the Department of Housing and Community Development, in 2017 the Terner Center launched a survey of planners across the state to learn more about local land use policy contexts in California. Today we are delighted to release…


InnovateHousing: New Ideas on the Future of Home

Posted on by Terner Center

In the face of a national housing crisis, where an unprecedented number of families are struggling to afford a home, can technology and the tech sector offer solutions? This was a key question animating InnovateHousing: New Ideas on the Future of Home, co-hosted by the Terner Center and Fannie Mae on Thursday, November 8th. The conference was invitation-only, but also accessible via a livestream. It brought together over four hundred people in-person and virtually, with a huge diversity of stakeholders and sectors represented on the panels and in the audience, including policymakers, entrepreneurs, lenders, developers, academics, and advocates. In opening…