The Housing Crisis Reaches Our Backyard

Whether you call it a granny flat, converted garage, an in-law unit, or by its formal name Accessory Dwelling Unit (ADU) it’s in high demand. For homeowners, the most common motivation for ADU development is rental income potential, followed by the prospect of flexible living space for multi-generational households. If you’re thinking of building an ADU, here’s what you need to know.

On January 1st, it became easier to build ADUs in California, thanks to a package of new bills. The state is motivated to find ways to help ease the housing shortage across the state. The laws reduce the costs and burdens previously associated with building ADUs. Some highlights of the new laws include a requirement for applications to be approved within 60 days and owners are no longer to be required to live at the property. Some types of ADUs are eligible for automatic approval, including conversions of existing spaces within the home or ADUs no larger than 800 square feet.

Aside from adding more space, one benefit of adding an ADU is the potential increase in the value of your home. As housing shortages increase, the rise in ADUs grows. One study in Portland, Oregon found that adding an ADU provided an average of 51% increase in value.