The proposal originally aimed at removing occupancy limitations to increase affordable housing is further refined in the House and takes a sharper aim at short-term rentals effect on the housing market.
SB 5235 passed the House as a striking floor amendment—diverging
significantly from the proposal that passed the Senate. Now the Senate will need to agree to the changes for the bill to pass the Legislature.
As passed the House, SB 5235 makes the following changes to the statutes regulating land use of accessory dwelling units (ADU) that were put into law by the 2020 Legislature:
- Cities may not require owner occupancy of any housing or dwelling unit on a lot containing an ADU, unless the ADU is being offered or used for short-term rental, except that:
- Cities may impose an owner occupancy requirement for the first year after initial occupation of the unit or primary residence following permitting; and
- Cities may impose an owner occupancy requirement for an additional period if such a requirement is supported by findings adopted by the city after at least two public hearings are held on the proposal and final regulations directly address
feedback from the community. Such an additional period of owner occupancy restrictions must be geographically limited and not apply to all residential zones.
- Cities that impose owner occupancy requirements on lots containing ADUs must provide for a hardship exemption when the owner no longer occupies the primary residence due to one of a list of hardships in the bill.
- Cities may adopt ordinances, development regulations, and other official controls, including the imposition of fees, impact fees, or taxes, or the waiver of taxes, fees, or specific regulations, to encourage use of ADUs for long-term housing when
combined with effective binding commitments or covenants that the ADUs will not be regularly offered for short-term rental. The city must have an audit program to ensure compliance.
- Cities have until two years after their comprehensive plan update to amend ADU ordinances and regulations. Cities that do not make changes will be preempted by the new statute.
While the law that passed last year provided for a safe harbor for cities that made recent changes to their ADU ordinances and regulations, SB 5235 provides no such relief.
In addition to the changes above, SB 5235 prohibits a city or town from regulating the number of unrelated persons that may occupy a household or dwelling unit, except for those currently allowed by state law or health and safety regulations.