There is no denial about the shortage of affordable housing units in California. People across the state are in search of alternative solutions. Due to this reason, ADUs or Accessory Dwelling Units have become quite popular in the last few years.
ADUs are a small outbuilding on your land that can function as a guest house, an extra bedroom, a home office, or a personal yoga studio. This article will discuss further on what an ADU is and why people build them on their lots.
What Is an ADU?
ADU, also referred to as an accessory dwelling unit, is a secondary housing unit built on your single-family residential lot. This housing unit sits on the lot of your larger, primary home. Although the name might sound a little institutional, it is the most popular term used to describe these units across the state.
An Accessory Dwelling Unit has its living area, kitchen, and separate entrance. You can attach your ADU to the primary house garage or build an entirely different unit. These housing units make use of water and electricity from the primary home. Depending upon the state and municipality laws, the average square footing of the housing unit can range between 600 square feet and 1200 square feet.
These Accessory Dwelling Units cannot be bought or sold separately. But, they can be rented out and make a positive impact in curbing the housing crisis across the state. They can be used to provide an additional income stream through rent or to help house an additional family member. For instance, an elderly parent or relative can live in a small housing unit and need not move to an assisted living facility.
However, note that an Accessory Dwelling Unit can increase your monthly utility bills. It will also cost you money to build and upkeep this residential unit.
Why Do People Build an ADU?
An Accessory Dwelling Unit can be an apartment over your garage, a basement apartment, or a tiny house in your backyard. Irrespective of its physical form, the housing unit is part of the primary house and the owner of the main house is the owner of this unit.
Accessory Dwelling Units were quite popular before the 20th century. You could see small, beautiful cottages built in the backyard of older houses. But as people adapted to a modern lifestyle, they fell out of favor in the middle of the 20th century. However, they have again gained popularity in the past decade and attracted multiple names like granny flats or laneway houses.
There are various reasons people choose to build an Accessory Dwelling Unit in their backyard. No matter the reason, these additional units are having a positive impact on the neighborhood.
Family or Private Guest Accommodation
When you have a few family members coming down for summer vacation or a private guest visiting you, having an additional unit outside the main house offers privacy to both parties. These units have a separate bedroom, kitchen, and living area, offering minimal disruption in your daily routine.
Additionally, you can use Accessory Dwelling Units to house your elderly parents. This way, you can spend time together while maintaining your schedule and privacy. This is a better alternative for individuals than leaving their elderly in a nursing home.
Separate Work Space
With the changing work culture, more and more people choose to work from their homes. However, your productivity might take a hit when you decide to work from your bedroom. Instead, these Accessory Dwelling Units can be used as a home office, workshop, or art studio, helping you enhance your productivity and focus.
Having a separate space for client meetings can create a more professional setting than a home office in your primary house. People may choose to invest their money in building an ADU rather than renting an office space. With proper house planning and zoning, you can entirely separate your primary residence from your ADU. It can also have a separate entrance and parking space.
Short and Long Term Rental Income
Most people build Accessory Dwelling Units to generate an additional income for their families. You can structure this renting arrangement to generate short-term income to cover your expenses or generate long-term recurring revenue. This would depend upon the location of your house.
For instance, if you live in a vacation destination, you can generate an impressive short-term rental income from your accessory dwelling unit. You can use services such as Airbnb and rent out your secondary units at a premium price. However, multiple cities in California prohibit this type of rental. Therefore, it would be best to check out your city council’s restrictions on short-term rentals.
In case you live in a suburban town, you can find long-term tenants to generate a recurring rental income. Sometimes, this rental income can cover a considerable portion of your mortgage.
Increase Your Property Value
By building an accessory dwelling unit on your lot, you can significantly increase the value of your property. The money you spend on building the unit will be a smaller percentage compared to the value it adds to your overall property. If you intend to sell your home and cannot find the right offer, you can try building an ADU on your property. Adding a separate structure to your lot can attract a bigger buyer to the table.
For instance, if you live in Southern California and construct an Accessory Dwelling Unit on your property for $200,000, the resale value of your property could increase by up to $500,000. This increased value can act as a great return on your investment.
Types of ADUs You Can Build On Your Property
There are a few different types of Accessory Dwelling Units you can construct on your property. This would depend upon your use case, your local zoning laws, and your residence type.
Garage Conversion
Most houses in California have a garage attached to their homes. With the modern lifestyle, most people don’t make use of garages. Hence, you can fully convert your preexisting structure into a full-blown living space. This could include a separate bedroom and living space. You need to outfit these living structures with heating, cooling, and insulation. You also need to add a water connection for the bathroom and kitchen.
Carriage House Conversion
Carriage house conversion is built on a similar concept to garage conversion. You can convert a larger garage with high ceilings into a carriage house. In a typical carriage house, the lower half of the space remains a garage, while the upper half gets transformed into an apartment or workspace.
Detached New Construction
The most popular type of Accessory Dwelling Unit is a detached construction. It is also known as a backyard cottage or a granny pod. These are tiny houses detached from the primary home with a separate entrance, bedroom, kitchen, and living area. If you plan and design your house appropriately, you can even have a separate parking space for your ADU.
These detached constructions can be an additional living space for a family member, elderly parents, or private guests. You can also rent out the unit and make short or long-term rental income.
Basement Conversion
You can also create an additional living space by transforming your basement into an apartment. These apartments have a separate exterior entrance that is different from the primary house. However, you might have to go across the backyard to access the gate. Depending on your use, you may or may not build an entrance to the main house from inside the basement apartment.
Home Addition
You can also create an additional housing unit connected to the primary house. Depending upon the structure of your primary house, you can build this ADU as a one-story or two-story unit, which is attached to one side of your home.
Junior ADU
A smaller-sized version of an Accessory Dwelling Unit is a Junior ADU. These units are typically smaller than 500 square feet. You can choose to add a separate kitchen, bedroom, or living area to a Junior ADU or just a large bedroom and bathroom for your kids. Most parents build a Junior ADU as a playhouse for their children.
Takeaway
An Accessory Dwelling Unit acts as secondary living accommodation for your family. Depending upon your primary house structure, living space, and zoning laws, you can create a home office, art studio, or rental house in your backyard. This would depend upon your primary house structure, living space, and zoning laws.
Accessory Dwelling Units have become rather popular in recent years, as one can use them to generate an additional rental income for their family. These units also positively impact the rising housing crisis in California. However, before you decide to build a secondary unit on your lot, you should reach out to your city council and be aware of the restrictions they might impose on your unit or reach out to us to help you determine your best options.
