A new ordinance in San Francisco allows homeowners to sell accessory dwelling units (ADUs) as separately owned condominiums. This policy aims to alleviate the city’s housing shortage and enable homeowners to leverage their equity. Previously, homeowners could only rent ADUs, which deterred investment due to the burdens of managing tenants and high construction costs. The law, effective for ADUs built after May 1, 2025, is a response to a state mandate for building 82,000 new homes and is intended to protect existing tenants from displacement.
Accessory dwelling units (ADUs), also known as in-law units, can now be sold independently as condos, allowing homeowners to tap into their equity amid a housing crisis.
With an average cost of $225,000 to $500,000 for the design, permitting, and construction of an ADU, the new ordinance provides homeowners a way to recoup these costs quickly.
The new ordinance limits the sale of ADUs to those constructed after May 1, 2025, which aims to prevent the displacement of existing tenants.
San Francisco is under a state mandate to build 82,000 new homes, making the legalization of selling ADUs a key part of addressing the housing shortage.
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