California City Pioneers New Home Ownership Model

San José, California completed the first sale of an accessory dwelling unit (ADU) as an independent property, thanks to a law signed by Governor Gavin Newsom. The sale was enabled by AB 1033, passed in October 2023, which allows local governments to authorize the separate sale of ADUs.

The two-bedroom home sold for $530,000 and features a private entrance, parking, and no homeowners association fees. This new approach to home sales could change how these types of properties are developed and marketed, offering a more accessible path to ownership.

AlphaX RE Capital, the developer, plans to build hundreds more ADUs in the coming years, working with both individual landowners and existing properties. Several other California cities, including San Diego, San Francisco, and Santa Monica, are also developing regulations to allow independent ADU sales. The state hopes this will broaden access to housing.