Renting an ADU in Mill Valley: Long-Term Rules to Know

Thinking about renting out an ADU in Mill Valley? The rules are clear and they favor long-term housing. You want steady income and simple compliance, not surprises. In this guide, you’ll learn the key rules that shape long-term ADU rentals in Mill Valley, how state law fits in, and practical steps to set up your unit the right way. Let’s dive in.

Quick snapshot: what’s allowed

• Mill Valley requires a recorded deed restriction for every ADU or JADU that limits rentals to at least 30 consecutive days. No short-term stays.
• California law allows you to rent an ADU even if you do not live on the property. JADUs in Mill Valley still require owner-occupancy.
• ADU permits are processed ministerially and follow state timelines. Local standards still apply for size, height, setbacks and parking.

The rulebook: state and local

State ADU basics

State law sets the floor for what cities can require. It covers things like ministerial approvals, parking limits, and setbacks for ADUs. Review the core statute in Government Code Section 65852.2 for the statewide baseline that cities must follow. Read the state ADU statute.

A 2023 change made a big difference for renting: AB 976 permanently prohibits cities from imposing owner-occupancy requirements for ADUs. See AB 976’s bill history. You can also consult the state’s ADU Handbook for implementation guidance. Visit HCD’s ADU resources.

Mill Valley’s ADU code

Mill Valley implements state law through Municipal Code Chapter 20.90. It requires a recorded deed restriction for every ADU or JADU and sets local development standards, enforcement, and JADU owner-occupancy. Review MVMC Chapter 20.90.

Long-term only: the 30-day rule

What the deed restriction says

Before final inspection, you must record a deed restriction on the property. That document states the unit cannot be rented for less than 30 consecutive days. It also includes other conditions, such as limits on selling an ADU separately except where state law allows it. See the deed restriction requirements in MVMC 20.90.

Short-term rentals are excluded

Because of the deed restriction, permitted ADUs and JADUs in Mill Valley are not eligible for short-term rental operation. Mill Valley’s short-term rental program requires registration and transient occupancy tax for eligible STRs, but deed-restricted ADUs and JADUs fall outside that program. Check the City’s STR page.

ADUs vs. JADUs in Mill Valley

• ADUs can be detached, attached, or converted from existing space. State law bars owner-occupancy requirements for these units, so you can rent long-term even if you live off-site.
• JADUs are 500 square feet or smaller and located within the primary dwelling. Mill Valley requires owner-occupancy for properties with a JADU, and the same 30-day minimum rental term applies.

Permitting and timelines

Ministerial 60-day review

For eligible ADUs, Mill Valley processes applications ministerially within the state’s 60-day review period once your application is complete. Submittal quality is key. Incomplete plans, missing utility letters, or third-party reviews can slow things down. See Mill Valley’s ADU standards.

Development standards and parking

Mill Valley adheres to state limits for setbacks, height, and parking in many cases. For example, reduced setbacks often apply to new detached ADUs, and parking is limited by state rules. Always confirm the specific dimensional standards for your lot in Chapter 20.90. Review MVMC development standards.

Fees and utilities

You will still pull building permits and coordinate with utilities. State law limits impact fees for some smaller ADUs, but water and sewer fees or availability letters may still apply. Utility interconnection can be a bottleneck, so start early.

Tenant protections and rent caps

AB 1482 at a glance

California’s Tenant Protection Act (AB 1482) limits annual rent increases for covered units and adds just-cause eviction rules. Whether your ADU is covered depends on the property type, ownership, and occupancy details. Read Civil Code Section 1947.12.

How it may apply to your ADU

• Single-family exemptions are limited and require specific ownership and a written notice to the tenant.
• When there is more than one dwelling on the lot, common exemptions can change.
• Coverage is fact-specific. Before you market your ADU, confirm whether AB 1482 applies and prepare any required notices.

Step-by-step checklist

• Confirm local rules. Email or call Mill Valley Planning and review Chapter 20.90 to align your design with the deed restriction and standards. Start with MVMC 20.90.
• Plan utilities early. Coordinate with PG&E and your water and sewer providers to set expectations on metering and scheduling. Review CPUC guidance on metering.
• Update insurance. Tell your insurer about the ADU and whether you plan to rent it. You may need landlord coverage, and tenants should carry renters insurance. Learn how ADUs affect insurance.
• Expect property tax changes. New construction value for the ADU is typically assessed and may trigger a supplemental bill. See the state’s guidance on new construction assessment.
• Check tenant law coverage. Determine if AB 1482 applies to your setup and prepare any required notices. Review Civil Code 1947.12.

Common pitfalls and enforcement

• Skipping the deed restriction. Mill Valley requires the deed restriction before final inspection. Renting without it or violating the 30-day minimum can lead to enforcement and fines.
• Assuming STRs are allowed. The deed restriction blocks any rental under 30 days for permitted ADUs and JADUs.
• Underestimating utilities. Interconnection delays are common, especially for separate meters or added service. Build this into your timeline.
• Missing annual city requests. Mill Valley may require owners to respond to ADU owner surveys for state reporting.

Financial nuts and bolts

Property taxes

An ADU is usually treated as new construction for property tax purposes. The added value of the ADU is assessed, and a supplemental bill may follow completion. Understand new construction assessments.

Insurance

Adding a rental unit changes your risk profile. Many carriers require endorsements or a landlord policy. Encourage tenants to carry renters insurance. See common insurance considerations for ADUs.

Utilities and metering

Separate meters, new service panels, or sewer capacity can affect cost and timing. Contact providers early to keep your schedule on track. Read CPUC metering information.

HOAs and CC&Rs

If your property has an HOA, review the CC&Rs. State law limits some HOA restrictions but does not eliminate all private covenants. Align early to avoid surprises. Check MVMC for local context.

Selling an ADU separately

Mill Valley’s deed restriction limits separate sale of an ADU except where state law allows. If you may want to explore this path later, plan ahead and consult the city and appropriate agencies. See MVMC deed restriction language.

Building or renting an ADU in Mill Valley is doable when you follow the rules and plan the logistics early. Focus on the 30-day minimum rental term, confirm whether AB 1482 applies, and keep utilities, insurance, and taxes on your radar. If you want a grounded perspective on value and rental potential in the North Bay, connect with Tim McKee to map your next steps.

FAQs

Can I rent my Mill Valley ADU if I do not live on the property?

• Yes. State law via AB 976 prohibits local owner-occupancy requirements for ADUs, and Mill Valley follows that rule. The 30-day minimum rental term still applies.

Are short-term rentals allowed for permitted ADUs in Mill Valley?

• No. The required deed restriction prohibits rentals under 30 consecutive days, which excludes permitted ADUs and JADUs from the City’s short-term rental program.

What is the deed restriction and when is it recorded?

• Mill Valley requires a deed restriction recorded before final inspection. It runs with the land and includes the 30-day minimum rental clause and other conditions.

How long does ADU permitting take in Mill Valley?

• For eligible projects, the City processes complete applications ministerially within the state’s 60-day review period, though utility and submittal issues can extend timelines.

Does AB 1482 rent cap apply to ADUs?

• It might. Coverage depends on ownership, occupancy, and unit configuration. Confirm whether your setup is covered and prepare any required notices.

Do JADUs follow the same occupancy rules as ADUs?

• No. JADUs in Mill Valley require owner-occupancy on the property, and they are subject to the same 30-day minimum rental term.

Will my property taxes go up after building an ADU?

• The ADU’s added value is typically assessed as new construction, which can trigger a supplemental tax bill while preserving the main home’s base year value.