Senator Newman is Energizing California’s Housing with ADU Tax Exemption
Sacramento, Calif. — Senator Josh Newman (D-Fullerton) today introduced Senate Bill 1164 (SB 1164), which will help address California’s housing shortage by creating additional incentives for the construction of Accessory Dwelling Units (ADUs) across the state. The bill will accelerate the construction of ADUs by exempting new ADU construction from immediate property tax assessments.
According to the Department of Housing and Community Development, California faces an annual shortfall of 100,000 housing units, which underscores the urgent need for innovative approaches to increasing housing supply. ADU construction has emerged as a promising source of affordable new housing, particularly in neighborhoods where traditional development may not be feasible.
Despite efforts to streamline ADU construction, obstacles persist for property owners, partly due to property tax reassessment requirements. Right now, new additions to properties, including ADUs, trigger immediate property tax increases based on the assessed value of the addition. This new financial burden discourages homeowners from pursuing ADU construction, even when they otherwise might have been inclined to do so.
SB 1164 will remove this disincentive by allowing property owners to claim an exemption from property tax reassessment for ADU construction until 15 years have passed or when the property changes hands. The bill will encourage ADU construction without imposing additional costs or mandates on localities by aligning the state’s housing goals with homeowners’ financial considerations.
SB 1164 will be a vital tool in the state’s efforts to increase housing affordability and availability, promoting sustainable growth and addressing the diverse housing needs of Californians. Senator Newman emphasized the importance, saying, “This legislation is an important and practical step toward addressing California’s housing crisis. Providing property tax exemptions for ADU construction will empower homeowners to add to California’s housing supply without incurring undue financial burdens. My hope is that once implemented, SB 1164 will play a vital role in promoting sustainable growth and increasing housing affordability across California.”
To schedule an interview with Senator Newman, contact Brian Wheatley at 916.651.4029.
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State Senator Josh Newman represents the 29th Senate District, which is comprised of portions of Los Angeles County, Orange County, and San Bernardino County. The 29th District includes all or parts of the cities of Anaheim, Brea, Buena Park, Chino Hills, City of Industry, Cypress, Diamond Bar, Fullerton, La Habra, La Palma, Placentia, Rowland Heights, Stanton, Walnut, West Covina and Yorba Linda. Senator Newman is a former United States Army officer, businessperson, and veterans’ advocate, and lives in Fullerton with his wife and daughter.