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Owners of illegal ADUs won’t face fines, penalties

San Jose residents who disregarded regulations and illegally built or converted garages, sheds or other types of in-law units, have been given a penalty-free pathway to turn them into safe, legal dwellings.

A new amnesty program approved unanimously by the San Jose City Council on Tuesday gives owners of illegal granny or in-law units — also known as accessory dwelling units — the opportunity to bring them up to code without paying the typical fees and fines for violating the permit process.

The two-year program is part of an ongoing effort within the city — and the region as a whole — to boost its housing stock by pushing the production of easy and affordable additional units on a property. In turn, the number of building permits issued by the city for in-law units has grown ten-fold over the past four years — from just 39 in 2016 up to 416 in 2019.

“ADUs are low-hanging fruit for creating affordable housing in San Jose,” Councilmember Pam Foley said during the meeting. “It’s an easy opportunity for us to build additional housing and for folks to create housing opportunities for people aging in place, for millennials who need a cheaper place to live and for giving a homeowner the ability to earn an additional source of income.”

San Jose is the latest in the Bay Area — behind San Francisco, San Mateo County and Santa Cruz County — to establish an ADU amnesty initiative.

Under the city’s new program, which will be launched on Jan. 21, third-party inspectors will visit the units of interested homeowners and determine whether it presents any zoning, safety or health violations based on the regulations in place when the unit was constructed.

The city will overlook some acute and non-life threatening violations found by inspectors, such as a unit being built too close to the edge of the property, and homeowners may be granted a permit without paying a fine or making any changes.

But if inspectors find violations that pose serious safety or health concerns, they will be required to report those to the city and forced to make the necessary repairs before obtaining a permit. Violations that could result in enforcement include hazardous wiring, structural hazards, inadequate fire protections and exits, lack of sanitation or water and the presence of gas appliances in sleeping rooms, according to the city.

City officials say homeowners who take part in the program will benefit from increased property values, better insurance coverage and added legitimacy when it comes to finding tenants for their units. The city estimates that at least 150 property owners will take advantage of the program within the next year and a half, and that those who qualify for a financial hardship could save an estimated $5,862 in costs for plan reviews and permit fees, according to a city report.

Some councilmembers, however, voiced concern on whether residents would be willing to participate. Councilmember Sylvia Arenas stressed that sending a concise message out to residents about the city’s enforcement tactics is vital to the program’s success.

“I can see someone not coming forward because the rules are not clear,” Arenas said. “So I just think we should be very blunt about the rules.”

Aiming to avoid catching residents off guard, the city plans to distribute a checklist to interested homeowners that will detail which types of violations would need to be remedied before a permit is issued and suggestions on how to fix them.

“We’re going to be sure to make it’s clear in the checklist so that our potential customers will know that this is the expectation and these are the list of life safety issues that must be addressed before a unit can be permitted,” Rosalynn Hughey, director of the city’s planning, building and code enforcement department, told the council.

Homeowners who earn less than about $50,000 per year or charge a monthly rent of $2,081 or less for their units will qualify for a small business financial hardship exemption and will not be required to pay a business tax, permit fees or park impact fees for the unit to acquire their permits.

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