Would an ADU be Beneficial to You?
What is an ADU?
The latest trend to address the housing shortage in California is expanding upon your own property. This can be achieved in a number of ways, such as: converting your garage to be a living space with a kitchen and bathroom, making your home into two separate living spaces, or adding a separate stand alone structure in your backyard.
These examples are known as building an ADU, an Accessory Dwelling Unit.
Who does an ADU benefit?
• Caretakers: Existing homeowners with senior parents who have their own home. The senior parent sells their home to finance the building of an ADU in their adult children’s property. This is a win-win situation because the senior parents can now live independently near their adult children yet still maintain their privacy. Adult children are now nearby to care for their senior parents when they need extra care. The ADU is an improvement to the adult children’s property and helps increase the value of the entire property.
• Parents: With rental housing being so expensive in metro and nearby suburbs in California, adult children are delaying their departure from home until they can afford to rent on their own. Adult parents may want to consider constructing an ADU to provide housing to their adult children separately from their home. Since it is a totally separate dwelling with kitchen and bathroom, adult children can truly live independently and provide rental income to their parents.
• Investors: Investors may want to create a second dwelling to rent out and create income to the main property. They can buy large lots and improve them with an ADU for a higher resale value than the original sales price or they can keep the property and now have two rent producing units.
Cost Implications
Talk to an architect/contractor so you can get a serious cost estimate on the total cost of building an ADU. The cost to build an ADU includes construction costs, materials, consultation fees and all the fees that the city/county attach for the additional service load as a result of the new structure. You will also be required to pay for fire, police, and school funds as a result of future use of these services. You may be required to do land surveys, grade surveys, a certain number of plan checks, etc.
Finally, there are also property taxes to consider. Your improvement will affect your future property taxes, so ask questions to make sure you have the proper funds to construct your property.
Planning and Approval
The process is different for each city or county (if you are in an unincorporated area). Start by talking to your building and planning department, as they will let you know which of the options work for your property. Most of the guidelines tend to focus on making sure you can build away from your property line to still give your neighbors space. At which point you must ask yourself, Is your lot large enough? Are there trees that can or cannot be cleared to make use of the space? Will I still be giving space and privacy to my neighbors?
You may be able to get some answers to some of your preliminary questions, but know that the planning department will not be able to answer all your questions without a sketch of the property and knowing everything you want to do.
Final Thoughts
Ultimately, building an ADU is an extensive process that has a lot of upsides if you are willing to manage all the details and processes. I think ADU’s are certainly in the future of the real estate market in congested metropolitan areas, so definitely consider if this could be right for you too.
By Camelia V. Vera, DRE 01871575