ADU Ordinance Update
City Council
August 17, 2026
2 Background and Purpose
• Discuss State Law Changes for ADU/JADUs
• Consideration of draft ordinance tonight;
• Discuss Staff Recommendation/Next Steps from
Council feedback
3 State Law Changes
• Assembly Bill 1154
• JADU short-term rental not allowed
• Owner occupancy changes
• Senate Bill (SB) 9
• 60-day timeline to submit adopted ordinance
• 30-day timeline to respond to HCD comments
• Null and Void if missed
• SB 543
• “Interior living space” for calculating FAR/lot coverage, fees • Create appeal process for ADU/JADU applications
• Allows four total second units (three ADU, one JADU)
• Shortens review timelines 30 days -> 15 days
4 Interior Living Space Calculation
Current: Exterior Stud Wall New: Interior Wall Face*
*Proposed Ordinance: Excludes ADU/JADU exterior walls from site FAR/lot coverage
5 Unit Allowance
Previous State law allowances (Table 1):
• For Single Family:
• 1 converted ADU* (attached or detached) and 1
detached ADU
• 1 JADU
• For Multi-Family:
• 2 detached ADUs with proposed multi-family
structure*
• Up to 8 detached ADUs or existing number of
units on site, whichever is less*
• Up to 25% of attached units through conversion*
New State law allowances:
• For Single Family:
• 1 attached ADU*, 1 detached ADU, 1 converted
ADU* (attached or detached)
• 1 attached JADU
• For Multi-Family: Unchanged
*No maximum size for these types of units
6 ADU/JADU Appeal Process
1. Staff reviews and provides list of missing items (incomplete) and how they can be remedied; or City denies application
2. Applicant appeals staff incompleteness/denial decision – starts 60- day timeframe to provide final written determination
a) Applicant must submit appeal form with written reasons for appeal and pay appeal fee ($618/application – FY 25/26)
3. Appeal, w/ accompanying staff report and attachments, will be placed on Council Consent w/in 45 days
a) Any pulled item must be addressed w/in 60-days from when original appeal was submitted
7 Consider Increasing Max Size to 1,200 SF
Local Regulations allow:
1. Up to 1,000 sf ADU w/ minimum two-bedroom unit
2. Proposed ordinance will increase to 1,200 sf w/ minimum two-bedroom unit
City Data:
1. 950 applications since 2020
a) Three projects exceed 1,000 sf (conversion). No clear indication that there is a trend toward largest unit size possible
8 Consider Separate Sale of ADUs
• Separate sale for ADUs are currently allowed when
developed by qualifying non-profit (2024)
• Cities can extend this allowance voluntarily (so far, roughly 10 CA jurisdictions have done this)
• Early adopters (e.g. San Jose, Santa Cruz, Martinez)
have not seen many applications
a) San Jose has approved two and are reviewing
two more
b) Barriers noted by these jurisdictions are:
i. Requirements for lien-owner consent
ii. Application fees/process
9 Consider Separate Sale of ADUs (Cont.)
• If adopted, draft ordinance allows three ADUs to be sold separately from the primary home and be processed ministerially – like SB 9 applications
a) JADUs cannot be sold separately
b) As an opt-in program, the City can apply additional objective requirements:
i. Require a hearing process (discretionary review)
ii. Require units be used only for residential purposes (e.g. no daycare or other commercial use)
iii. Require units be deed restricted to certain AMI
categories
iv. Allow less ADUs to be sold separately
c) PTC recommends staff return with more regional
information when available; recommends no action at this time
10 Corrects two errors related to the front yard
setback:
• Deletes text that was inadvertently
added and not part of the existing or
proposed ordinance (Single Family)
• Deletes existing code language and
reference to compliance with front yard
setback, which is impermissible under
State law (Multi-Family)
Supplemental Memo
11 • Recommend approval of the draft ordinance provided in the Supplemental Report • Provide direction to staff regarding the sale of ADUs and other J/ADU related policies
Recommended Motion and Next Steps
11 Garrett Sauls
Principal Planner
[email protected]
650-329-2471
Additional Diagrams for FAR/Lot Coverage Calculation
Current: Exterior Stud Wall Local Architect Preference: Exclude Interior Walls • Since 2020:
1. 950 ADU applications submitted
2. Average of 106 permits issued per year since 2020
3. Between 2020-2022, 145 ADU/JADUs received final inspection
4. Between 2023-present, 387 ADU/JADUs received final inspection
5. 7 expired permits
6. ADU Dashboard Information on Housing Webpage:
https://www.paloalto.gov/City-Hall/Housing
7. ADU Pre-Approval Webpage:
https://www.paloalto.gov/Departments/Planning-Development- Services/Accessory-Dwelling-Units
ADU Data