Own or shopping for a 2-acre property in Atherton and wondering if you can add a detached guest house that actually pencils? You want flexibility and rental upside without creating title or lending headaches later. In this guide, you’ll learn how Atherton’s “bonus ADU” works on large lots, what the deed restriction really means, and how it can affect leasing, resale, and financing. Let’s dive in.
Bonus ADU in Atherton: The basics
Key allowances at a glance
- On parcels that allow single-family dwellings and are at least 2 acres, you may add one detached “bonus” ADU if you meet specific conditions. Atherton Municipal Code §17.52.040
- The bonus ADU must be deed restricted to serve either a low-income household for 15 years or a very-low-income household for 10 years. Income levels are tied to HUD/HCD limits for San Mateo County. Atherton Municipal Code §17.52.040
- You must rent the unit for at least nine months per year. Atherton Municipal Code §17.52.040
- Setbacks for accessory buildings apply, and standard ADU rules still govern size, height, and placement. Atherton ADU resource page
- These local rules layer on top of California’s ADU law. Gov. Code §65852.2
Rental and occupancy terms
- Atherton requires ADU rentals be longer than 30 days, and the bonus ADU adds a nine-month minimum lease requirement. Atherton Municipal Code §17.52.040
- State law limits local owner-occupancy rules for ADUs, but Atherton’s chapter includes specific provisions. Always confirm current requirements with the Town. Gov. Code §65852.2
Check if your lot qualifies
- Your parcel must both allow single-family dwellings and be at least 2 acres. Confirm your official lot area and zoning with Town staff or your title report. Atherton Municipal Code §17.52.040
- Atherton’s lot area rules can vary by slope and district. Verify how lot size is calculated for your property. Atherton lot-area provisions
- Start with the Town’s ADU resource page and contact Planning/Building for guidance. Atherton ADU resource page
What the deed restriction really means
A deed restriction is a recorded covenant that runs with the land and binds future owners. For a bonus ADU, it will spell out the affordability level, the 10- or 15-year term, and your obligations to lease for at least nine months annually. Municipalities typically require the covenant be recorded before final inspection or certificate of occupancy. Atherton Municipal Code §17.52.040
Monitoring and enforcement details are set in the recorded document and Town conditions. Expect requirements for tenant income verification, reporting, and remedies for noncompliance. Contact Town staff for the current monitoring process. Atherton ADU resource page
Low vs. very-low income
- Low income: deed restriction runs for 15 years.
- Very-low income: deed restriction runs for 10 years.
- Income thresholds reference HUD/HCD limits for San Mateo County. Check the latest table for the year your lease is executed. HCD income limits
Practical implications for owners
Benefits
- You can add an extra detached unit on a qualifying large lot, creating a new, regulated rental stream and contributing to Atherton’s housing goals. Atherton Municipal Code §17.52.040
Tradeoffs
- A recorded affordability covenant will appear on title for 10 or 15 years, guide who may rent the unit, and require minimum 9-month leases. Atherton Municipal Code §17.52.040
- Expect monitoring and documentation. Confirm timing, forms, and any fees with the Town. Atherton ADU resource page
- Becoming a landlord adds responsibilities. Notify your insurance carrier, and speak with a tax professional about rental income and deductions. Atherton ADU resource page
Buyers and sellers: title, value, and lending
A recorded affordability covenant is an encumbrance on title. Title companies will disclose it, and lenders will underwrite with it in mind. Mortgages on deed-restricted properties are viable but involve specific documentation and approvals, so plan ahead with your lender and escrow team. Freddie Mac guidance
Market impact varies with demand for deed-restricted rentals and the exact terms in your covenant. As a seller, disclose early and set expectations. As a buyer, review the covenant and monitoring obligations before removing contingencies. Local housing solutions overview
Process and timing overview
- Pre-application: Discuss eligibility, setbacks, and the deed-restriction requirement with Planning. Atherton ADU resource page
- Plan submittal and review: Ministerial review applies to ADUs, with statutory timelines when applications are complete. Gov. Code §65852.2
- Record the deed restriction: Town-approved covenant is typically recorded before final inspection or occupancy. Atherton Municipal Code §17.52.040
- Final inspections and leasing: Lease terms must meet the nine-month minimum and affordability requirements. Atherton Municipal Code §17.52.040
Policy context in Atherton
Atherton’s 2023–2031 housing element leans on ADUs, including deed-restricted units, to meet RHNA obligations, which helps explain the bonus ADU option on large lots. Review the Town’s housing element materials for broader context. Atherton Housing Element
As a reference point, some cities use bonus models that trade additional ADUs for on-site affordability. Details differ by jurisdiction. San Diego ADU bonus program
HOA and CC&R considerations
California law limits HOA rules that prohibit or unreasonably restrict ADUs that meet state standards. Your HOA can apply reasonable design rules, but blanket bans are generally unenforceable. Review your CC&Rs and consult counsel as needed. AB 670 / Civil Code §4751
Next steps checklist
- Confirm parcel size and zoning, including slope-related lot calculations. Atherton lot-area provisions
- Meet with Town planning staff and request the deed-restriction template and monitoring steps. Atherton ADU resource page
- Speak with your lender and title company about underwriting and closing with a recorded affordability covenant. Freddie Mac guidance
- Budget for plan check, recording, and any monitoring costs. Confirm exact fees with the Town. Atherton ADU resource page
- Pull current San Mateo County income limits before marketing or leasing the unit. HCD income limits
Ready to map out your Atherton bonus ADU strategy with discretion and speed? For clear next steps, off-market insight, and a plan that protects your long-term goals, connect with Rabeet Noor.
FAQs
Which Atherton parcels qualify for a bonus ADU?
- Parcels that allow single-family dwellings and are at least 2 acres; always verify zoning and official lot area with the Town. Atherton Municipal Code §17.52.040
What does “deed restricted” mean for a bonus ADU in Atherton?
- It is a recorded covenant that runs with the land, sets affordability and lease terms, and binds future owners; the Town requires recording as a condition of approval. Atherton Municipal Code §17.52.040
How long must the bonus ADU remain affordable, and to whom?
- Fifteen years if restricted to a low-income household or ten years for a very-low-income household, using HUD/HCD income limits for San Mateo County. Atherton Municipal Code §17.52.040
Does the deed restriction affect refinancing or sale?
- Yes. The covenant is an encumbrance on title and lenders underwrite accordingly; loans are possible but require specific documentation and approvals. Freddie Mac guidance
Who enforces income and lease compliance for a bonus ADU?
- The Town or its designee typically monitors compliance; your recorded covenant and permit conditions will outline reporting and remedies. Contact Planning for current procedures. Atherton ADU resource page
Can my HOA or CC&Rs block a compliant bonus ADU?
- Not generally; state law restricts HOAs from prohibiting ADUs that meet standards, though reasonable design rules may still apply. AB 670 / Civil Code §4751
