For years, accessory dwelling units—ADUs—have been one of the few ways Berkeley homeowners could expand their homes without dramatically altering the character of a neighborhood. Backyard cottages, garage conversions, and lower-level units have allowed families to create space for extended relatives, generate rental income, or add flexibility to properties that otherwise had little room to evolve.

But there has always been a constraint: no matter how complete or home-like an ADU was, it could not be sold separately from the main house.

That changed in early 2026, when the City adopted a new ordinance allowing certain Berkeley ADU sales independently rather than remaining permanently tied to the primary residence. This is an important policy shift with real implications for homeowners, buyers, and the long-term shape of Berkeley’s housing market.

A History of Relaxing ADU Rules to Create More Housing

For most of the past decade, Berkeley has been gradually rolling back restrictions that once limited ADU development. These changes were driven by the recognition that housing costs in the Bay Area are among the highest in the country and that more flexible housing types are needed to grow housing supply without massive redevelopment.

One crucial shift was aligning Berkeley’s ADU regulations with California state law. Under Government Code Sections 66314–66339, cities are required to allow ADUs “by right” without discretionary review, and to process permits for compliant projects within a set timeframe. Berkeley adopted updated ADU and Junior ADU standards reflecting these statewide reforms, which eliminated many layers of discretionary review and made the permitting process more simple for homeowners.

Berkeley’s ADU standards also eased local development limitations. For example:

• Reduced or modified setback requirements allow detached ADUs more flexibility in placement, including reduced front, rear, and side setbacks when certain conditions are met, so long as minimum safety spacing is maintained (e.g., as little as five feet from the front line if necessary to fit an 800-square-foot unit).
• Parking requirements were relaxed, building on state and local reforms that limited or eliminated mandatory parking for accessory units, especially near transit. Berkeley’s policies now allow replacement or flexible parking configurations, and in many cases no additional parking is required for ADUs.
• No minimum lot size is required for ADUs, removing another barrier that once kept secondary units out of smaller lots.
• Permit reviews are subject to clear timelines, with zoning certificates and building permits processed without discretionary approval so long as the project meets objective standards.

These reforms reduced common obstacles and made it easier for homeowners to proceed with ADU projects. They reflect a broader evolution in Berkeley’s housing approach, where policies have increasingly favored streamlined housing production over lengthy approvals.

The Different Types of ADUs—and What They Mean in Practice

Not all ADUs are created equal, and understanding the differences is important—especially now that separate sale is on the table.

Detached ADUs are standalone structures, often backyard cottages. These tend to feel the most like small single-family homes, with the greatest physical separation from the primary residence. From a resale perspective, detached ADUs are often the clearest candidates for separate ownership because they offer privacy, independent access, and fewer shared systems.

Attached ADUs are built as additions to the primary house, sometimes over a garage or off the rear of the structure. These units can function very well as independent homes, but shared walls and infrastructure can add complexity when considering future sale or condo conversion.

Garage conversion ADUs repurpose existing garages into living space. These are common in Berkeley, where older homes often have detached or semi-detached garages. While typically less expensive to build, they may involve tradeoffs around parking replacement and layout that can affect long-term value. Also, many garage ADUs were built without the benefits of permits which may make them ineligible for independent sale.

Interior ADUs, sometimes called basement or lower-level units, are carved out of existing living space within the main structure. These units are often the most affordable to create, but they tend to feel the most “attached” to the primary home. Separate sale is possible in some cases, but sound separation, access, and shared utilities become especially important considerations.

Junior ADUs (JADUs) are smaller units—often created within the primary residence using existing space—and are subject to additional limitations. In practice, JADUs are less likely to be candidates for separate sale and are better understood as flexible living arrangements rather than independent housing assets.

Each of these ADU types plays a different role in Berkeley’s housing ecosystem. The new sales rule doesn’t erase those differences, but it does give homeowners with certain configurations—particularly detached and well-designed attached ADUs—a new set of options.

How ADUs Worked in Berkeley Until Now

Historically, ADUs in Berkeley were legally “accessory” in every sense. Even if a unit had its own entrance, kitchen, bathroom, utilities, and outdoor space, ownership could not be separated from the primary home. If you built an ADU, your options were essentially to rent it, use it for family, or sell the entire property.

That framework strongly influenced the economics. Building an ADU in Berkeley can be expensive. Between design, permitting, construction, and site-specific constraints, projects often reach well into six figures. For many homeowners, the numbers only penciled out if they planned to hold the property long-term or rely on rental income to justify the investment. The City’s prior ADU guidance reflected that assumption, emphasizing rental use and long-term integration with the main dwelling.

What the New ADU Sales Rule Allows

Under the updated rules, qualifying ADUs may now be sold separately from the primary home, most commonly through a condominium structure. The property remains on a single parcel, but ownership can be divided so that the ADU and the main house become distinct legal units.

This local change stems from California Assembly Bill 1033, passed in 2024, which allows—but does not require—cities to permit separate ADU sales. Berkeley chose to opt in, joining a small but growing group of California cities experimenting with this approach. The City’s staff presentations and ordinance text outline the framework, eligibility requirements, and procedural details for these conversions.

Importantly, not every ADU will qualify automatically. Units must be legally permitted, meet current building and safety standards, and comply with the City’s conversion process. In some cases—particularly where rent control applies—tenants may have a right of first refusal before a unit can be marketed publicly. The City debated broader tenant protections during the ordinance’s adoption, ultimately settling on a more limited set of requirements.

Why This Matters in a Constrained Housing Market

Berkeley’s housing constraints are structural and longstanding. Limited land, zoning restrictions, seismic and fire considerations, and strong neighborhood preservation norms all restrict new construction. At the same time, median home prices routinely put traditional single-family ownership out of reach for many buyers.

What makes the ADU sales rule meaningful is that it introduces a new ownership pathway without requiring large new developments. Rather than adding height or density, it unlocks value and supply within the existing fabric of residential neighborhoods.

A separately sold ADU becomes something Berkeley has very little of: a small, ownership-oriented home in an established neighborhood. For buyers who value location, walkability, and community over square footage, that can be a compelling alternative to condos in larger buildings or homes farther from the city core.

How This Changes the Equation for Homeowners

For homeowners, the most important change is optionality. An ADU is no longer only a rental or a long-term hold. It can now function as a distinct asset with its own exit strategy.

That opens the door to scenarios that were previously off the table: selling an ADU to fund retirement, keeping the main house while unlocking equity, or building an ADU with a future sale in mind rather than relying exclusively on rental income. It may also influence how ADUs are designed. When a unit may eventually be sold, considerations like privacy, sound separation, outdoor space, utility metering, and independent access become far more important.

Over time, I expect we’ll see ADUs designed less like secondary spaces and more like compact, standalone homes.

What This Means for Buyers

From a buyer’s perspective, separately sold ADUs introduce a new category of housing in Berkeley. These units are likely to appeal to first-time buyers, downsizers, and people who want to live in Berkeley but don’t need—or can’t afford—a traditional single-family home.

That said, this is still an emerging market. Financing standards for ADU condominiums are evolving. Appraisal data will be limited at first. HOA structures, insurance, and shared maintenance responsibilities will vary from property to property. Early transactions will require careful review, realistic expectations, and experienced guidance.

The Practical Constraints Still Matter

It’s important to be clear about what this policy does not do. It does not lower construction costs. It does not eliminate permitting complexity. It does not instantly create affordability at scale.

Building an ADU in Berkeley remains a significant undertaking, and converting one for separate sale adds another layer of legal and logistical work. Lenders are still adapting to this product type. Utility separation can be complex. Condo documents must be drafted carefully. Not every property configuration will make sense for a sale.

As with most meaningful housing changes, the impact will be incremental rather than immediate.

Why This Policy Feels Different

What stands out to me about Berkeley’s ADU sales rule is not just the mechanics, but the mindset behind it. It recognizes that housing solutions don’t always come from large projects or sweeping rezonings. Sometimes they come from removing a single constraint that has long limited how people use and value their homes.

By allowing ADUs to stand on their own legally, Berkeley has reframed them from purely “accessory” spaces into potential homes in their own right. Over time, that reframing could influence how homeowners plan for aging in place, how architects design small spaces, and how buyers imagine their first step into the Berkeley market.

Looking Ahead—and How to Learn More

I don’t expect this change to transform Berkeley overnight. Early adopters will likely be homeowners with well-located properties and the resources to navigate a new process. But as resale data accumulates and lending standards become clearer, I expect this model to gain traction.

If you own property in Berkeley and are wondering whether an existing or planned ADU might qualify for separate sale—or if you’re a buyer curious about what this new housing option could look like in practice—I’d be glad to talk through the details. The rules are new, the implications are nuanced, and the opportunities require careful analysis.

You can reach out to me directly to start a conversation. Sometimes the most meaningful housing changes arrive quietly. This feels like one of those moments—and it’s worth understanding how it might apply to you.