Rule Changes From AB 835 in California Could Shift the Multifamily Market in Big Ways
Summary
California is considering changes to building codes (AB 835) that could allow single-staircase multifamily buildings, potentially increasing housing supply and cash flow for landlords. However, this change is debated because of safety concerns. Hosts should monitor local building code developments and consider adding ADUs or upgrading existing units to boost cash flow.
Key Insights
- •The Pew Charitable Trusts estimates single-stair four-to-six-unit buildings cost 6% to 13% less to build.
- •Single-family housing starts hit an 11-month low in mid-2025, while multifamily starts soared 30.6% in June compared with the previous year.
- •AB 835 seeks to allow single-stair multifamily buildings with more than three units, potentially reducing construction costs.
Action Items
- ✓Monitor local building code developments related to multifamily housing and staircase requirements.Effort: lowImpact: low
- ✓Implement a classic value-add strategy by upgrading kitchens and bathrooms to increase rents.Effort: mediumImpact: medium
- ✓Consider adding ADUs (Accessory Dwelling Units) on your existing lot if zoning and space allow to generate more cash flow.Effort: mediumImpact: medium
Common Mistakes
- ⚠Retrofitting apartment buildings to accommodate new building code changes is usually far more expensive than it’s worth.
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