Part 1: What AB 1154 Changed
Effective January 1, 2026, AB 1154 allows:
- Non-owner-occupied financing for properties with JADUs
- Consideration of JADU rental income by lenders
Previously, many lenders required owner occupancy or discounted income entirely.
What AB 1154 Did NOT Change
JADUs may still:
- Share utilities or access
- Be deed restricted
- Receive inconsistent appraisal treatment
Income treatment remains lender-specific.
Practical Takeaway
AB 1154 improves flexibility — it does not eliminate risk. JADUs remain supplemental income tools.
Part 2: What AB 1033 Allows
AB 1033 permits:
- Separate sale of ADUs as condominiums
- Parcel-level exit flexibility
What Still Applies
- Local jurisdiction approval
- Condo mapping and HOA formation
- Financing uncertainty
Local adoption will ultimately determine viability in San Diego.
Final Takeaway
AB 1033 introduces optionality, not certainty. This strategy rewards long-term planners, not short-term flippers.
The information in this blog is for general informational purposes only and should not be your sole basis for financial or investment decisions. While ACI Apartments uses reliable sources for data and analysis, you should verify all information independently. This blog is not a comprehensive report on all changes to local, state, or federal laws affecting property owners and managers. Laws may have changed or been misinterpreted since publication. Always consult legal counsel or a licensed CPA before making decisions. ACI Apartments is not liable for actions taken based on this content. Information was gathered from CoStar and SDMLS.