With increasing frequency, developers, property owners and concerned neighbors have been seeking assistance in navigating the impact of new ADU laws that went into effect in January 2025.
California continues to aggressively reshape its housing landscape to address the housing crisis, and the latest round of legislation regarding accessory dwelling units (ADUs) to take effect are a part of that effort. While new laws that make way for more ADUs and junior ADUs (JADUs) across the state create new opportunities for developers, they also bring heightened scrutiny, legal challenges and questions around local control and neighborhood impact — particularly in high-demand areas like San Diego County.
For property owners, builders and investors navigating these developments, understanding the nuances of these new laws — and working with legal professionals who do — is more critical than ever.
A Growing Pathway for Development
ADUs, often referred to as “granny flats,” and JADUs are small, independent living units located on the same property as a primary residence. New California legislation continues to expand where and how ADUs can be built.
Three new laws that took effect in January 2025 are especially notable:
- Assembly Bill 2533 expands protections for unpermitted ADUs and JADUs built before 2020, making it easier for owners to legalize them — provided the structures meet basic health and safety standards.
- Senate Bill 1211 makes major changes to parking requirements, limiting when cities can mandate off-street or replacement parking. It also clarifies what qualifies as “livable space” and significantly increases the number of detached ADUs allowed on lots with existing multifamily dwellings — from two to up to eight, or as many as there are primary units, whichever is fewer.
- SB 1077 requires the California Coastal Commission and Department of Housing and Community Development to provide clear guidance for ADU and JADU development in coastal zones, long a source of confusion due to overlapping state and local coastal regulations. Guidance is expected by mid-2026, but developers working in these zones should closely monitor this process now.
One City Pushing the ADU Limits — Then Pulling Back?
The City of San Diego has been at the forefront of ADU-friendly policies, including a “bonus” ADU program that incentivized affordable housing by allowing developers to build one market-rate unit for every deed-restricted affordable ADU. In practice, this led to high-density projects on lots originally zoned for single-family homes — such as several controversial developments in Clairemont, one of which includes the addition of 17 ADUs currently under construction.
The backlash has been swift. Neighborhood groups have sued the City and developers, citing lack of transparency, strained infrastructure and what they view as exploitation of loopholes. In response, the City Council recently voted to roll back parts of the bonus program. While it’s not a full reversal, it signals a shift toward more cautious implementation — a tension that developers will need to navigate moving forward.
Opportunities Meet Regulatory Complexity
For developers, the changes in 2025 offer clear advantages. More units can mean more value — especially on lots with existing multifamily dwellings or in areas where parking regulations previously limited infill development. But the regulatory landscape remains complex:
- Setbacks, height restrictions and design rules still vary across jurisdictions.
- Coastal zone properties remain subject to additional scrutiny and evolving rules.
- Legalizing older, unpermitted units now requires new disclosures and documentation.
San Diego’s rollback of its bonus ADU policy is a reminder that local politics and community pressure can quickly reshape how — and whether — state-level laws are enforced on the ground.
The Legal Landscape: Why Experienced Guidance Matters
The 2025 ADU laws reflect California’s ongoing efforts to meet housing demand while simplifying the permitting process. But “simplified” doesn’t mean “simple.” Developers still face a maze of local, state and — in coastal zones — federal environmental regulations. Legal challenges, shifting interpretations of “affordable housing” and disputes over infrastructure burdens add further risk.
Working with professionals who understand both the letter of the law and the practical realities of development is essential. Whether it’s securing the right permits, protecting a project from neighborhood opposition or confirming a property’s “previously conforming” status, informed guidance can help developers move forward with confidence.
As California continues to balance housing needs with local oversight, ADU development will remain both an opportunity and a flashpoint. For developers and investors willing to perform their due diligence and align with experienced legal advisors, 2025’s new laws offer meaningful chances to expand housing — and business — in a state that desperately needs both.
If you have questions about how the new ADU rules affect your projects, contact the author of this article, DMW Land Use Consultant Eve Mazzarella or another member of our real estate team. We work closely with developers, property owners and contractors across California to navigate regulatory changes and minimize legal risk.