Is an ADU for You?

With housing costs on the rise, homelessness at an all-time high, housing stock and rental supply at an all-time low, and construction costs on a steady climb, Angelenos are looking for timely and practical solutions to LA’s affordable housing crisis. While no single solution exists (yet), there are ways to chip away at the multifaceted housing shortage; one such way is the Accessory Dwelling Unit (ADU).

So, what makes a living space an ADU?

A practical yet innovative option, an ADU is not only relatively affordable but sustainable. Also known as a granny flat, in-law unit, backyard apartment, secondary unit, et al., the living space must first meet certain requirements to be considered a legitimate ADU. As an independent living space for one or more people, an ADU must include living, sleeping, and eating areas, as well as a kitchen and bathroom. Furthermore, it can be attached or detached from the existing or proposed primary residence, or it can be a converted existing space within the main house. Moreover, only one ADU is permitted on the property of the primary residence.

Size matters when it comes to an ADU.

Per California state law, a detached ADU cannot exceed 800 square feet and must be no more than 16 feet high, with a minimum side and rear setback of 4 feet. Los Angeles, however, allows up to 1200 square feet and up to two stories. Attached ADUs cannot exceed the primary structure’s height or 50% of its square footage. Additional parking is required if the ADU is more than a half mile from public transportation. No additional parking is needed if the ADU is a converted garage or carport. Likewise, an ADU cannot be sold separately from the primary residence and is exempt from HOA construction restrictions.

What does a homeowner stand to gain with an ADU?

The benefits of ADU construction are varied and many. To start, ADUs are more affordable than conventional new-builds as homeowners aren’t required to purchase additional land, invest in significant new infrastructure, provide structured parking, or install elevators. In addition, wood-frame construction keeps building costs relatively low. While an ADU is still a somewhat substantial investment, it does increase a property’s value, is viewed as an asset to potential buyers, and can be a reliable source of income as a short or long-term rental for homeowners.

An ADU can offer as much living space as many new-build apartments or condominiums and are readily suitable for individuals, couples, and small families. ADUs are also good options for housing family members, including adult children, parents, and other relatives, or an on-site caregiver such as a nurse or nanny. An excellent housing source for aging parents, ADUs give homeowners the opportunity and flexibility to share independent living spaces with older family members, allowing them to age in place as they require more care and attention.

There is another option.

In addition to the ADU, homeowners have the option of a Junior Accessory Unit (JADU), which involves a conversion of existing space that is contained entirely within a proposed or existing single-family structure, including an attached garage. What sets it apart from your standard ADU is it can’t be larger than 500 square feet but may share central systems and a bathroom with the main residence. Although it must include a kitchen, it can be basic and utilize small plug-in appliances. The unit, however, must have a separate entrance from the primary residence.

JADU benefits include reduced construction/development costs, no additional parking requirements, and no added stress on the infrastructure and utilities because a JADU does not expand the home’s existing space within the residence or increase its planned occupancy. The home must be owner-occupied, and as with the ADU, it cannot be sold separately and is exempt from HOA restrictions on construction.

State grants and financial incentives for ADU construction only sweeten the deal.

Some local government agencies, nonprofits, and other institutions offer grants and financial incentives to encourage more ADU construction. One such program is the California Housing Finance Agency ADU Grant, which offers up to $40K for predevelopment and non-reoccurring closing costs related to ADU construction to homeowners with low or moderate income. Predevelopment costs include permits, architectural designs, site prep, soil tests, energy reports, property surveys, and impact fees.

Another incentive comes via the LA ADU Accelerator Program, backed by Bloomberg Philanthropies Mayors Challenge. In exchange for qualified tenant screening and referrals, stable rental payments, and tenant case management, homeowners in the City of LA willing to provide stable and affordable housing via their ADUs are paired with reliable tenants who are older adults and seniors.

As the need for more affordable housing options only increases, expect more of these incentives to proliferate. Homeowners are encouraged to check their local government agencies, financial institutions, and nonprofits for current grants and programs.

While the ADU option isn’t the only solution to our housing issues, encouraging more homeowners to consider adding an accessory unit to their property is one viable and low-impact way to deal with our current housing crisis. A two three birds with one stone option, an ADU not only provides much-needed rental housing for our LA residents but also provides homeowners with additional income while simultaneously increasing their property’s value and desirability.