The ordinance, enabled by a 2023 California state law, positions accessory dwelling units as potential starter homes in one of the state’s costliest markets — where 30-year fixed mortgage rates stood at 6.09% as of the week of publication — while a council majority rejected additional tenant protections before approving the measure.
Berkeley’s City Council voted 6-1 Tuesday night to allow homeowners to sell backyard cottages and basement apartments as condominiums, opening a new path to ownership in a city where the median single-family home price hovers around $1.4 million, according to Berkeleyside reporting distributed by the Associated Press.
The ordinance takes effect under AB 1033, a 2023 California state law that gave cities the authority to permit such sales. San Jose became the first city in the state to act on the law last year, the report said.
“We’re trying to create more housing inventory that’s available for less than $1 million — and hopefully substantially less than $1 million,” Councilmember Brent Blackaby said at Tuesday’s meeting.
How the ordinance works
Under the new rules, property owners may apply for fast-tracked approval to convert an accessory dwelling unit into a separately saleable condo without going through a public hearing or an appeals process. Owners also will not have to pay the fee the city typically charges for converting rental units to condos.
Homeowners will be required to submit a map to the city showing how they plan to divide their property. Tenants in ADUs covered by Berkeley’s rent control ordinance receive a three-month window to make the first offer to buy their units before an owner may sell to the public.
Accessory units have become one of Berkeley’s most prevalent forms of new housing. The city has issued just over 100 ADU building permits on average each year since 2018, according to the report. Two councilmembers — Rashi Kesarwani, who owns a home with an accessory unit, and Igor Tregub, who rents one — recused themselves from Tuesday’s deliberations.
Council splits over tenant protections
All members broadly backed the ordinance as a step toward more realistic homeownership in Berkeley. But a proposal from Councilmember Cecilia Lunaparra to add stronger tenant protections divided the council.
Lunaparra’s original amendments would have barred property owners who remove ADU tenants through a no-fault eviction from converting the unit for five years, and would have imposed the city’s Affordable Housing Mitigation Fee on conversions unless owners agreed to keep the unit under rent control if it were later rented out.
“The fundamental question right now is how to balance the stability of ADU tenants and the opportunities for potential future ADU homeowners,” Lunaparra said. “I would love to purchase a condo home in the future and start a family in Berkeley, and I’m so glad to see that council is taking concrete steps in creating these opportunities — and I do not want to displace my friends who are current young tenants in ADUs.”
Several members of Berkeley’s Rent Stabilization Board and UC Berkeley students attended the meeting in support of Lunaparra’s amendments, as did a representative from East Bay for Everyone, a pro-housing organization. The Berkeley Property Owners Association opposed the changes.
Most council members said they worried the added fees and regulations could deter property owners from converting or building ADUs in the first place. Lunaparra pared her proposal down to a single amendment that would have extended the three-month right of first refusal to all ADU tenants, not only those covered by rent control. That measure narrowly failed: Lunaparra, Councilmembers Ben Bartlett and Shoshana O’Keefe, and Mayor Adena Ishii voted in favor, leaving it one vote short of the five needed to pass. Councilmembers Terry Taplin, Blackaby, and Mark Humbert were opposed.
“I’m very committed to increasing pathways and opportunities for homeownership,” Taplin said. “I see condo conversion for ADU sales as a valuable tool, and want to be cautious to not unwittingly create impediments that would have a chilling effect on ADU production.”
The full ordinance then passed 6-1, with Lunaparra casting the lone no vote.
Affordability context
Berkeley’s housing market presents a steep barrier to buyers. The median single-family home price of roughly $1.4 million, combined with a 30-year fixed mortgage rate of 6.09% as of the week the ordinance passed, puts conventional homeownership well beyond the reach of most first-time buyers. Almost no new condominiums have been built in the city for decades, according to the Berkeleyside report. City officials said they hope ADU sales can fill that gap at a lower price point, though the degree of that reduction will depend on what sellers and buyers ultimately negotiate for individual units.