Ethan Varian
The Mercury News
July 8, 2026 - 7:43 am
San Jose is location to the archetypal accessory dwelling portion sold arsenic a separately owned condo successful California, metropolis officials said, mounting a imaginable template for a much affordable way to homeownership. But a lengthy rollout raises questions astir whether the exemplary tin go a scalable solution to the state’s lodging situation — the merchantability comes much than 2 years aft the authorities made specified transactions possible.
The 749-square-foot, two-bedroom ADU connected Josefina Street adjacent downtown closed past period for $530,000. That’s astir a 4th of Santa Clara County’s eye-popping $2.1 cardinal median single-family location terms successful May, according to the California Association of Realtors. Real property brokerage Redfin last period listed San Jose among the 10 astir costly U.S. lodging markets, based connected the stock of median income needed to spend to bargain a home.
ADUs, besides known arsenic in-law units oregon granny flats, typically person up to 1,200 quadrate feet of surviving abstraction and indispensable see a room sink, cooking appliance and abstracted bathroom.
The merchantability was made imaginable by a authorities instrumentality passed successful 2023, AB 1033, which allows homeowners to person ADUs into condos and merchantability them separately from the main property, alternatively than conscionable renting them out. Under the law, ADU condos travel with their ain spot taxation bills, but necessitate an HOA statement with the superior homeowner for communal elements, specified arsenic roofs oregon driveways.
City officials said the Josefina spot is 1 of 2 ADU condos approved successful San Jose, with 2 much nether review. Officials expect much conversions successful the aboriginal but declined to supply an estimate. It’s unclear however galore ADU condo conversions and income person been completed statewide. The authorities does not look to way that data.
To boost ADU condo operation and sales, San Jose has sought to streamline permitting for operation and conversions. The metropolis has besides assigned 2 gathering section employees to assistance homeowners navigate the process.
City officials were incapable to marque the unit’s purchaser and seller disposable Monday.
While ADU condos whitethorn connection a caller accidental for first-time homebuyers and others struggling to spend a location successful the Bay Area, imaginable roadblocks remain.
For one, cities indispensable opt successful to AB 1033 to let the conversions. And adjacent aft San Jose became the archetypal metropolis to greenlight ADU condos successful July 2024 — the authorities instrumentality took effect astatine the commencement of 2024 — it took different 2 years to implicit the archetypal sale.
Part of the hold whitethorn beryllium that homeowners are inactive learning that selling an ADU arsenic a condo is an option. Some whitethorn besides beryllium deterred by the request and outgo of obtaining easements, subdivisions and different permitting requirements for a sale.
“These are other steps that a homeowner has to instrumentality successful summation to gathering an ADU,” said David Garcia, lawman manager of the UC Berkeley Terner Center for Housing Innovation.
Homeowners besides sometimes conflict to unafraid loans to physique ADUs, Garcia said.
Despite the financing challenges, caller authorities lodging laws person helped spur an ADU roar statewide successful caller years. In 2025, California cities and counties permitted astir 32,000 ADUs, up from astir 9,000 successful 2018, according to data from the authorities lodging department. San Jose approved 502 past year, up from 192 successful 2018.
Even so, galore section governments, including San Jose, are down docket successful gathering their state-mandated lodging goals, peculiarly for low- and middle-income housing.
Overall, the Bay Area is connected the hook for approving much than 441,000 caller units betwixt 2023 and 2031. At the extremity of past year, a 4th of the mode done the eight-year lodging cycle, the portion had permitted lone astir 14% of that goal, according to the lodging section data.
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