California faces a significant challenge in its housing market: a shortage of affordable units. This shortage is partly due to unpermitted construction, where residential units have been built without the necessary permits and inspections. Senate Bill 1226 (SB 1226), introduced in the 2017-2018 legislative session, aimed to address this issue by easing the process for legalizing existing unpermitted accessory dwelling units (ADUs).

Background: The Prevalence of Unpermitted Construction
ADUs are secondary housing units on a single-family property, often taking the form of a granny flat, basement conversion, or garage apartment. They provide additional living space and can be a source of rental income for homeowners. However, constructing an ADU requires obtaining permits and undergoing inspections to ensure structural safety, habitability, and compliance with building codes. Because of the expenses involved, a substantial number of ADUs have been built without permits. Estimates suggest hundreds of thousands of unpermitted ADUs exist in California.

This prevalence can be attributed to several factors:
• High Permit Costs: The permitting process for ADUs can be expensive, involving application fees, plan reviews, and inspections. These costs can be particularly burdensome for homeowners with limited resources.
• Navigational Complexity: The permitting process can be complex and time-consuming, requiring homeowners to navigate regulations and interact with various agencies.
• Fear of Non-Compliance: Some homeowners may be hesitant to apply for permits if they fear their existing unit might not meet current building codes, leading to potential demolition or expensive retrofitting.

These factors create a situation where unpermitted construction persists, leading to potential safety hazards for occupants and hindering efforts to increase the overall housing stock.

SB 1226: Providing a Path to Legalization
Senate Bill 1226, authored by Senator Patricia Bates, was signed into law in 2018. It was sponsored by the city of Encinitas and Mayor Catherine S. Blakespear, but the bill is intended to reduce ADU barriers across the state. The bill directs the California Building Standards Commission to adopt a standard clarifying the role of local governments to permit an existing ADU based on the year the ADU was constructed.
If, for example, an ADU was constructed in 1995, the local Building Official could use the 1995 building code to issue a permit. This would allow unpermitted ADUs to be brought up to code and made available on the housing market.

The bill’s key provisions included:
• Granting Discretion to Building Officials: The bill clarified that local building officials have the authority to determine the construction date of an unpermitted ADU. This allowed officials to apply the building code standards that were in effect at the time of construction, rather than requiring compliance with the latest, potentially more expensive standards.
• Streamlining Legalization Process: SB 122 established a process for homeowners to legalize existing unpermitted ADUs. This process typically involved paying a fee, undergoing inspections to ensure basic safety standards are met, and potentially making minor modifications to comply with the applicable building code from the construction period.
• Promoting Safety and Transparency: By providing a pathway to legalization, SB 1226 encouraged homeowners to bring their unpermitted units up to code, improving overall safety for occupants. Additionally, legalization brought these units into the official housing records, increasing transparency in the housing market.

Effects of SB 1226: Addressing the Housing Shortage
The passage of SB 1226 marked a significant step towards addressing California’s housing shortage. The bill’s effects can be analyzed through its impact on homeowners, renters, and the overall housing market.

Benefits for Homeowners:
• Reduced Costs: Legalizing an unpermitted ADU allowed homeowners to formally rent out the unit and generate additional income. Additionally, by applying the building code in effect at the time of construction, the legalization process could potentially be less expensive than full compliance with the latest standards.
• Increased Property Value: A legalized ADU can increase the overall value of a property, as it becomes a permitted and recognized living space.

Benefits for Renters:
• Increased Housing Options: SB 1226 facilitated the legalization of existing ADUs, potentially adding to the available rental housing stock. This can help ease pressure on the rental market, particularly in areas with high housing demand.
• Improved Safety: The legalization process often involved inspections to ensure basic safety standards, potentially improving the quality and safety of available rental units.

Benefits for the Housing Market:
• Increased Transparency: Legalization brought previously unacknowledged units into the official housing records, providing a more accurate picture of the available housing stock.
• Improved Safety Standards: By encouraging compliance with existing building codes, SB 1226 potentially contributed to an overall improvement in the safety of California’s housing options.

However, it’s important to acknowledge potential limitations of SB 1226. The bill did not eliminate the permitting process entirely. Homeowners still had to navigate a legalization process, potentially involving inspections and minor modifications. Additionally, the bill focused on existing unpermitted units and did not necessarily address the underlying factors that lead to unpermitted construction in the first place.

Conclusion: A Step Forward, More Work Needed
California Senate Bill 1226 (SB 1226) stands as a positive step towards addressing the issue of unpermitted construction and increasing the availability of safe and legal housing options. The bill provided a path for homeowners to legalize existing ADUs, potentially reducing costs, increasing property values, and creating additional rental units. It also contributed to improved safety standards and increased transparency in the housing market. However, SB 1226 is not a complete solution. The high costs and complexities associated with obtaining permits for new ADU construction remain a barrier. Addressing these issues could further incentivize the creation of new legal ADUs and contribute more significantly to alleviating the housing shortage.

By addressing these areas alongside the framework established by SB 1226, California can create a more favorable environment for the development of safe and legal ADUs. This can contribute significantly to increasing the availability of affordable housing options, fostering a more vibrant housing market, and ultimately improving the overall living conditions for Californians.