In an effort to increase housing availability, the San Francisco Board of Supervisors has unanimously passed an ordinance that permits property owners to create in-law units on their lots that can be sold separately as condominiums.
The legislation aims to significantly boost the number of accessory dwelling units (ADUs) across the city.
Between 2020 and 2024, San Francisco saw the addition of only approximately 1,300 in-law units, according to city data.
District 4 Supervisor Joel Engardio sponsored the ordinance, which introduces compelling incentives for homeowners to add an ADU — a move that has previously seen limited interest due to restrictions on selling units.
Under the new law, only owners of single-family homes or condominiums with fewer than four units are eligible.
It also applies to newly constructed single-family homes or condo projects, though in-law units eligible for sale must be built after May 1, 2025.
Engardio described the legislation as a way for homeowners, particularly low-income immigrants who purchased homes decades ago, to unlock the “generational wealth” present in their property without the necessity of moving or selling.
He emphasized, “It’s taking the one asset that you have that is the most valuable, and maximizing it.”
While it is uncertain whether this legislation will assist Engardio in his upcoming recall election in September, it is expected to benefit homeowners in the city’s western and southern neighborhoods, including Sunset, Richmond, and the Excelsior, where single-family homes predominate.
Approximately 62 percent of residences in the Sunset and Parkside neighborhoods are owner-occupied, nearly double the citywide average based on the 2023 Census American Community Survey.
A report from the Sunset Chinese Cultural District highlighted the financial struggles of many elderly homeowners, stating that they are often “house-rich, cash-poor, and disconnected from their families as younger generations are forced to move from the communities they grew up in.”
The report urged the city to explore legislation that would allow ADUs to be individually titled and sold separately.
Engardio articulated the ordinance’s aim of increasing the supply of affordable entry-level homes and moving toward the city’s goal of constructing 82,000 housing units by 2031, all without raising building heights, a topic that has garnered substantial pushback from local residents.
“This does nothing to change the height of anything in the neighborhood,” Engardio asserted.
He explained that the concept revolves around creating a single-story structure in the backyard of existing homes.
To address concerns regarding displacement of rent-controlled tenants in older ADUs, the ordinance restricts the sale to new units.
Nearly a decade ago, San Francisco began permitting ADUs in all zoning districts, which led to a rapid increase in building permits, rising from just 34 in 2015 to 217 in 2016, according to city records.
Despite the introduction of various incentive programs in recent years, including an executive directive from then-Mayor London Breed to expedite ADU approvals and a pilot program aimed at eliminating ADU building inspection fees for a year, significant growth in ADUs has not materialized.
Engardio is optimistic about the new ordinance, believing that allowing homeowners to sell ADUs as separate properties will enable them to recuperate development costs more quickly than relying solely on rental income.
He is also considering additional legislation that could allow homeowners to defer building permit fees for one or two years post-construction.
This would provide further incentive for homeowners to start building without the upfront payment of fees.
“It just gives more incentive for people to get started and get it built and not having to pay all the fees up front,” he stated.
Engardio concluded, “Not everyone’s going to want to do this, but it’s just creating an option.
We want to make sure families have all the options available so they can stay in San Francisco.”
image source from：missionlocal
