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Critics argue California\u2019s housing reforms have failed because the state\u2019s housing shortage persists. But that\u2019s the wrong measure of success. The real question is whether those reforms are changing the way cities produce housing, and new data on accessory dwelling units suggests they are.<\/p>\n
Just last week, I wrote about California\u2019s increasingly aggressive enforcement of state housing law through lawsuits against jurisdictions that continue to resist their legal obligations. <\/p>\n
New reporting from the San Francisco Chronicle <\/a>provides another piece of that story. It shows that one of the state\u2019s most successful housing reforms\u2014the streamlining of accessory dwelling units\u2014is reshaping development patterns, even in affluent communities that have historically built very little housing. At the same time, it reveals why California still has more work to do if it hopes to solve the broader affordability crisis.<\/p>\n The Chronicle analyzed housing permit data reported to the California Department of Housing and Community Development and found that accessory dwelling units have become a significant component of new housing production across California. <\/p>\n In the Bay Area, ADUs accounted for just 8 percent of newly permitted homes in 2019. By 2025, that figure had climbed to 18 percent. Statewide, ADUs represented roughly 26 percent of all newly permitted homes last year.<\/p>\n Beginning in 2016, California lawmakers passed a series of reforms that steadily dismantled local barriers to ADU construction. Cities lost much of their authority to deny qualifying ADUs through discretionary review, burdensome parking requirements, owner-occupancy mandates and other restrictions that had long made building a backyard home difficult or impossible.<\/p>\n Unlike larger residential developments that often remain vulnerable to political opposition and lengthy approval processes, qualifying ADUs increasingly became ministerial projects. If homeowners met objective standards, cities generally had to approve them.<\/p>\n Homeowners are building ADUs in numbers that would have been difficult to imagine a decade ago.<\/p>\n Perhaps the most striking examples come from some of California\u2019s wealthiest and historically most housing-resistant communities.<\/p>\n According to the Chronicle, Hillsborough permitted 58 housing units last year. Fifty-six of them were ADUs, meaning 97 percent of all housing approvals came through the state\u2019s streamlined ADU process.<\/p>\n Atherton approved 60 housing units, 45 of which were accessory dwelling units.<\/p>\n Mountain View and Santa Clara also relied heavily on ADUs, with every housing unit they reported last year as affordable to lower-income households consisting of accessory dwelling units.<\/p>\n Viewed one way, those numbers invite skepticism. If affluent cities are producing little beyond backyard cottages, has California really solved anything?<\/p>\n The answer is no\u2014but that is also the wrong question.<\/p>\n The relevant question is whether state law is changing local behavior.<\/p>\n For decades, communities such as Hillsborough and Atherton produced little or no housing while invoking local control, neighborhood character or infrastructure limitations. Those political dynamics proved extraordinarily difficult to overcome through persuasion alone.<\/p>\n California eventually chose a different strategy \u2013 rather than asking cities to approve more housing, lawmakers increasingly limited their ability to block it.<\/p>\n The Housing Accountability Act limits arbitrary denials of compliant housing projects. Senate Bill 35 created streamlined approvals for qualifying developments in jurisdictions falling behind on housing production. The builder\u2019s remedy created significant consequences for cities that fail to maintain compliant Housing Elements. More recently, the state has begun suing jurisdictions that refuse to comply with housing law, signaling that enforcement is no longer theoretical.<\/p>\n These reforms share a common premise: local governments retain an important planning role, but they cannot indefinitely prevent housing that serves statewide needs.<\/p>\n Increasingly, the evidence suggests that strategy is working\u2014not because California has solved its housing crisis, but because it is beginning to change how cities produce housing.<\/p>\n The state still faces an enormous housing shortage. Home prices remain among the highest in the nation. Rents continue to strain working families. Housing production remains well below the level necessary to restore affordability.<\/p>\n But the behavior of local governments is beginning to change.<\/p>\n Housing shortages are the product of decades of policy choices and thus it would be folly to think they can be reversed in a few years. What policymakers can change are the incentives and rules governing future decisions.<\/p>\n The Chronicle\u2019s reporting illustrates exactly that shift.<\/p>\n Communities that once built almost nothing are now approving housing because state law has made it substantially harder to say no.<\/p>\n That is not to suggest that building ADUs alone can solve California\u2019s housing shortage.<\/p>\n Indeed, the Chronicle\u2019s reporting highlights one of the limitations of the state\u2019s current approach.<\/p>\n Accessory dwelling units are valuable because they add gentle density without dramatically changing neighborhood character. They provide housing for renters, aging parents, adult children and caregivers while creating additional income opportunities for homeowners. They are among the least disruptive ways to increase housing supply in established neighborhoods.<\/p>\n But California\u2019s shortage is measured in millions of homes.<\/p>\n Backyard cottages cannot substitute for apartments near transit, mixed-income developments, townhomes, duplexes and other forms of missing-middle housing.<\/p>\n The Chronicle also notes another important caveat.<\/p>\n A 2021 UC Berkeley survey found that only about half of responding ADU owners rented their units to tenants. Many others used them for family members, guests or short-term rentals.<\/p>\n Some critics argue those findings diminish the value of ADUs as an affordability strategy, but that criticism overlooks how housing markets function.<\/p>\n Every household living in an ADU is one less household competing for existing housing elsewhere. A retired parent moving into a backyard cottage may free up another home. An adult child who remains on a family property may avoid competing for a scarce apartment. Even when ADUs are occupied by relatives rather than traditional tenants, they still absorb housing demand that would otherwise place additional pressure on an already constrained market.<\/p>\n That does not eliminate the need for larger developments.<\/p>\n It simply demonstrates why ADUs should be viewed as one important piece of a broader housing strategy rather than dismissed because they are not, by themselves, sufficient.<\/p>\n The larger lesson is that California\u2019s most successful housing reforms have one thing in common: they remove opportunities for unnecessary local obstruction.<\/p>\n Whether it is ADU legislation, the Housing Accountability Act, Senate Bill 35, Housing Element enforcement or the builder\u2019s remedy, the state has increasingly concluded that local governments cannot be trusted to address a statewide housing shortage if they retain unlimited discretion to reject new homes.<\/p>\n The Chronicle\u2018s reporting suggests that change is already producing measurable results. Many jurisdictions remain reluctant participants, with some producing little beyond ADUs, but even that reflects a significant shift from the near-total resistance to housing that characterized many affluent communities just a decade ago.<\/p>\n Critics often judge California\u2019s housing reforms by asking whether they have already solved the housing crisis \u2013 that was never a realistic benchmark.<\/p>\n The better question is whether those reforms are changing the incentives that created the crisis in the first place.<\/p>\n The growing evidence\u2014from state enforcement actions to the remarkable rise of accessory dwelling units\u2014suggests they are.<\/p>\n The ship is turning.<\/p>\n The challenge now is ensuring California does not mistake early progress for final success. The state has demonstrated that when it limits unnecessary local barriers, housing gets built. The next phase of reform must build on that success by making it easier to produce housing at every scale\u2014from ADUs to duplexes, apartments and larger mixed-income communities.<\/p>\n California\u2019s housing shortage was created one local decision at a time over many decades.<\/p>\n It will be solved the same way\u2014except now, increasingly, those local decisions are being shaped by state laws that are beginning to change the outcome.<\/p>\n To comment please go to one of these social media platforms:<\/p>\n Facebook: https:\/\/www.facebook.com\/DavisVanguard<\/a><\/p>\n LinkedIn: https:\/\/www.linkedin.com\/company\/peoples-vanguard-of-davis-inc\/<\/a><\/p>\n Instagram: https:\/\/www.instagram.com\/davisvanguard\/<\/a><\/p>\n X: https:\/\/x.com\/davisvanguard<\/a><\/p>\n Bluesky: https:\/\/bsky.app\/profile\/vanguardnewsgroup.bsky.social<\/a><\/p>\n Subscribe <\/a>to the Vanguard News letters.\u00a0 To make a tax-deductible donation, please visit davisvanguard.org\/donate<\/a> or give directly through ActBlue<\/a>.\u00a0 Your support will ensure that the vital work of the Vanguard continues.<\/p>\n Categories: Breaking News<\/a> Housing<\/a> Opinion<\/a> State of California<\/a> Tags: Accessory Dwelling Units<\/a> ADUs<\/a> california housing<\/a> Housing Affordability<\/a> Housing Element Law<\/a> housing policy<\/a> Land use reform<\/a> local control<\/a>