Assembly Bill 1033 is a new state law that went into effect this year that allows the separate sale of auxiliary dwelling units built on a residential property. With a vast number of large lots in La Jolla, this may be appealing to a portion of property owners and has the potential to transform neighborhoods in some areas.
At the core of AB 1033 lies the concept of “condoization,” a term commonly used to describe the process of splitting a traditional single-family residential-zoned lot into a multiple-family lot.
Condoization entails more than just a physical division; it involves a legal restructuring of ownership rights, granting separate parties the ability to own distinct portions of the same single-family lot. In other words, it will allow a property owner to turn a portion of the lot into a condominium complex, with conditions, covenants and restrictions (CC&Rs) and a homeowners association (HOA).
Similar to Senate Bill 10 — a state law allowing up to 10 units per parcel without California Environmental Quality Act (CEQA) oversight — individual cities would have the freedom to decide whether they want to opt into AB 1033, giving property owners the option to sell their ADUs.
Selling ADUs as separate properties is not a new concept and is already adopted in other locations, including Seattle, Austin, Texas, Portland, Ore., and Princeton, N.J. — all in an effort to alleviate their widespread housing crises.
Assembly Bill 1033 carries implications for private property rights. On one hand, some property owners may argue they possess the legal right to divide their lot and sell their ADUs individually. On the other hand, others may express concerns, stating they didn’t purchase their homes with the intent of living next to multiple units or a condominium complex.
With limited neighborhood parking, traffic congestion, streets needing repairs and a strained infrastructure in the La Jolla area, there’s likely to be considerable discussion and debate surrounding AB 1033 this year, and the San Diego City Council will have to decide whether to opt into the program or oppose it through a vote.
Nevertheless, it’s crucial to recognize that a “no” vote today may not necessarily remain a “no” vote in the future.
Mark Powell is a real estate broker and co-founder and owner of Discovery Property Group.