Context
I have been building ADUs for the past 4 years on both single family homes and multifamily properties. In doing so, I have learned a lot of important information I would be happy to share with you!
Whether you are a Homeowner wanting to build an ADU or an Investor wanting to add value to your multifamily property with ADUs, don't hesitate to reach out.
What is an ADU?
An Accessory Dwelling Unit (ADU) is a self-contained living space with key features including:
-
Its own entrance, separate from the main dwelling.
-
A kitchen.
-
A bathroom and sleeping area.
ADUs are typically found on single-family residential lots but can also be built on multi-family residential lots. They are known by various names such as granny units, in-law units, second dwelling units, backyard cottages, guest houses, carriage houses, casitas, and tiny houses on wheels (THOWs). ADUs come in different designs, including detached houses, garage conversions, basement conversions, conversions of part of an existing residence, or additions to an existing residence.
Types of ADUs
How many ADUs can you build?
On a single-family home
State law allows for one ADU plus one Junior ADU (JADU) per single-family lot, however, adding a JADU requires owner-occupancy of either the JADU or the primary dwelling. Furthermore, JADUs can only be created by converting space within the existing walls of a single-family residence (including attached garages), which is not an option on all properties.
On a multifamily property
One can build "by right" 2 detached ADUs and 1 or more converted ADUs. The allowable number of converted ADUs is equal to 25% of the existing unit count. This means for example: on a 4-unit property that has tuck under parking or a basement you could build 1 converted ADU. On a 8-units property you could convert 2 ADUs and so on. The good news is that the calculation is often rounded up. So on a 5-units property, you could convert 2 ADUs.
Site built or Prefab?
ADUs can be site-built (traditional construction), Prefabricated (in a factory), or Panelized (Panels that are assembled on-site). The most common types are site-built and penalized. There are pros and cons to both.
Prefab ADUs can be slightly cheaper (10%-15%) and have a shorter timeline. About 4-6 months for the construction phase instead of 9 months for traditional construction.
Why ADUs Have Become Popular
In recent years, ADUs have gained popularity due to legislative changes aimed at reducing restrictions and streamlining the permit process. For instance:
-
In 2020, California passed laws to ease ADU regulations, making permits quicker and less expensive.
-
In 2023, legislation limited jurisdictions from blocking ADUs due to unpermitted work unless it poses a health or safety hazard.
-
Automatic approval is granted for certain types of ADUs, including conversions and new detached ADUs under specific size and height limits.
Benefits of ADUs
ADUs offer numerous benefits:
-
Rental income potential and tax advantages.
-
Proximity for extended families while maintaining privacy.
-
Aging in place for seniors.
-
Flexibility for various living arrangements.
-
Additional living or workspace options.
-
Personal outdoor space and increased property value.
-
Affordable construction and sustainable housing options.
-
Meeting the demand for smaller household sizes and affordable housing.
Cons of ADUs
However, there are also drawbacks to consider:
-
Financial costs and potential impacts on property value.
-
Changes in rental and zoning laws.
-
Space limitations and parking requirements.
-
Privacy concerns and potential neighbor conflicts.
-
Ongoing maintenance and management responsibilities.
-
Impact on property resale and buyer preferences.
Preapproved ADU plans
Cities like San Jose offer preapproved ADU vendor lists, showcasing various designs and starting prices. Costs can vary based on ADU type, construction method, location, and additional features.
Cost Of Building an ADU
The cost of constructing an ADU can vary significantly. Typically, kitchens and bathrooms are the most expensive per square foot in a residence. A smaller self-contained living space often allocates more floor space to these high-cost rooms, resulting in a higher building cost per square foot. A rough estimate of building a residence in Silicon Valley is around $400 per square foot, although it can often exceed that substantially.
Many vendors with preapproved plans from the City of San Jose provide starting prices. For example, information from Abodu's website (as of 2/28/2024) is provided below. It's advisable to contact them for the most current information.
When considering building an ADU, it's essential to first determine your goals. You might find that your needs are better met by purchasing a new house that fulfills those requirements. However, an independent detached home could be necessary to achieve your specific goals.
Major cost factors include the type of ADU (detached ADUs typically require more labor and materials), the use of prefabricated units (which can be less costly and quicker to build), and the expenses associated with architectural plans, engineering reports, and inspections (usually around 10-15% of the total cost). Additionally, local building contractor rates fluctuate based on demand, affecting overall project costs.
Can I convert my garage that sits on the property line to an ADU?
Yes, you can convert your garage into an ADU if it is a legal structure. However, you must ensure that it meets current building and fire codes as it will be considered a change in use.
Can I convert my basement to an ADU?
Certainly, you can convert your basement into either an ADU or a Junior ADU. This process requires compliance with building codes, including having adequate ceiling heights and appropriately sized windows for ingress and egress.
Code enforcement has cited me for an illegal unit. What can I do?
If you've been cited for an illegal unit, most jurisdictions will require you to either revert the space back to its original permitted use or convert it into habitable space. The new ADU laws offer a path to legalize such units that didn’t exist before. It's advisable to consult legal counsel, especially if you have a current tenant, to navigate the process effectively.
I have a non-permitted unit that I believe was built to building code. How do I legalize it?
Your non-permitted unit might qualify for an amnesty program if there are no Health and Safety Violations and if such a program exists in your jurisdiction. Even without an amnesty program, you may be able to legalize the unit through the ADU process, considering when it was constructed and its compliance with building codes from that era.
I own a single-family home in a homeowner’s association. Can I add an ADU?
Yes, homeowners associations must allow ADUs and provide a reasonable design review process. In case of issues with your HOA, contacting the California Department of Housing and Community Development is recommended.
Am I required to provide parking spaces for residents of an ADU?
Generally, no. Parking spaces for an ADU may not be required if public transportation is available within a certain distance from the residence, with options like street parking or tandem driveway parking permissible.
What are the ADU size limits?
ADU size limits vary, but California state law generally limits ADUs to 1,200 sq. ft., with local jurisdictions allowing up to 850 sq. ft. for a studio/one-bedroom and up to 1,000 sq. ft. for a 2-bedroom ADU. Conversion of existing space usually doesn't have strict size limits.
Do I have to pay impact fees on an ADU?
ADUs of 750 sq. ft. or less are usually exempt from impact fees, but square footage exceeding that may be subject to local impact fees, which can vary significantly.
Does an ADU require separate utilities?
Separate utilities for ADUs are not mandatory, but you may need to upgrade utilities to meet additional demand. Installing separate meters for rental ADUs might be preferable.
Do I need fire sprinklers in my ADU?
Under state law, sprinklers are only required in an ADU if the primary dwelling also has them. Some local jurisdictions may impose additional requirements, but these might conflict with state laws regarding ADU regulations.