How Do the New ADU Laws Impact You?


The state of California recently passed a series of laws regarding the construction of ADUs. Here are the changes you need to know about.

On October 9, three laws were passed by the state of California that intend to address the housing crisis by relaxing restrictions on accessory dwelling units (ADUs): Senate Bill 13, Assembly Bill 68, and Assembly Bill 881.

Within these three laws, three specific changes were enacted that you need to know.

The first is that ADUs don’t have to be owner-occupied. Previously, you had to occupy part of the property to build an ADU on it or convert a garage into an ADU—whether it was the main house or the ADU, itself. Now, you don’t have to. Also, you’ll no longer have to deal with size restrictions on the lot before you start building. The total floor area of an attached accessory dwelling unit shall not exceed 50% of the proposed or existing primary dwelling living area, or 1,200 square feet.

Second, you’re allowed to have two ADUs on a property. Now, for example, if you have a detached garage that you converted into an ADU, you can build another detached ADU, even if it’s in a single-family home zoning area. Also, if you already have a duplex and a separately built garage and you’re located in a multifamily resident zoning area, you can build on top of that garage—as long as it makes sense foundationally.

This is good news for anyone looking to invest in real estate
Lastly, the city can’t go against state law. Also, the city has to lower the impact development fee and the utility company has to lower the connection fee for the water and sewer lines. Additionally, the city has to respond to building permit applications within 60 days. If they don’t respond within 60 days, their approval is implied, and you’re free to start building.

In a nutshell, this is good news for anyone looking to invest in real estate or anyone who already has an ADU built within the zones mentioned above. My advice is to hang on to that property and sell it later on—tax-free!

If you have any questions about this or any other real estate topic, don’t hesitate to reach out to me. I’d love to help you.

What Does the Passing of the Tenant Protection Act Mean for Landlords?


What does AB-1482 (the Tenant Protection Act) mean for landlords in California? Let’s discuss.

The Tenant Protection Act (AB-1482) was just signed into California law, and this has many landlords wondering about the implications of this move. There are a couple of key changes to keep in mind.

The first is the new 5% annual rent increase cap. This cap does account for local inflation, which is about 3.8% in the Los Angeles area, so the “true” cap is actually closer to 8.8%. So long as your increases don’t exceed this limit (which is retroactively effective as of March 2019), you shouldn’t have any issues.


Landlords can still evict problematic tenants, but they will now need to present evidence to the court before doing so.

The second important change to keep in mind is the new “just-cause” eviction standards. This doesn’t mean that you will no longer be able to evict problematic tenants—just that you will need to present evidence to the court before doing so.

Another change to remember is that landlords now need to pay one month’s worth of a tenant’s rent to help them vacate the property whenever you’re doing remodeling projects.

Finally, landlords should realize that, under AB-1482, any Los Angeles properties that are more than 15 years old will be subject to rent control.

These points combined basically sum up what you need to know about the Tenant Protection Act, but if you have any other questions or would like more information, please feel free to give me a call or send me an email. I look forward to hearing from you soon.

How the Real Estate Industry Compared to the S&P in the Last Decade


How did the real estate industry compare to the S&P 500 between 2007 and 2016?

Last time, I discussed the last decade of the stock market with a focus on the S&P 500. After getting some great feedback on the topic, today I’ve decided to focus on another decade—the years between 2007 and 2016, aka the Great Recession, when about 5% of all homeowners had their homes foreclosed upon and many lost a fortune in real estate.

Here’s the data for Los Angeles County for that turbulent decade:

In 2007, the median home price was $525,000. By 2016, the median home price was $569,000. That’s roughly an 8.4% growth during that timeframe. The housing market was able to dig itself out from the crash, from 2011 to 2015, with the real gain happening between 2015 and 2016. This is especially true for those homeowners who purchased right before the crash of 2007. This amounts to an annual growth of 0.84%. In this paragraph: Overall, it looks like the real estate industry got ahead of the S&P 500 during that decade. This makes sense, since real estate is an industry that has a certain amount of control.

Unlike the stock market, the real estate industry has leverage on its side.

However, unlike the stock market, the real estate industry has leverage on its side. The basic down payment in real estate is 20%, so if you take that 0.84% growth and multiply it times five, you get roughly a 4.2% growth for that timeframe. 

Now let’s take a look at how the S&P 500 fared between 2007 and 2016.

In 2007, the S&P 500 index was 1,424. By 2016, the index was 1,918. That’s a cumulative growth of 34.8%, or an annual growth of 3.4%, without taking into account the 1% annual fees.

Overall, it looks like the real estate industry got ahead of the S&P 500 during that decade. This makes sense, since real estate is an industry that gives you a certain amount of control.

If you have any questions or feedback about this topic, I’d love to hear from you. Feel free to reach out to me anytime.