ADUs can be rented to people who need a bit of help. This can be achieved in a variety of ways. Examples might include accepting housing assistance vouchers, offering a weeknight living space a for low-paid commuters, or participating in a community-based program to house those in need.

Some single family homeowners like the idea of reducing their footprint by moving into an ADU and renting the larger main house. This move can result in a significant cash flow!

A rented ADU will bring in a revenue stream that can go toward anything from retirement to investment return. Extra living space created by an ADU will be considered part of the assessed value of a property. Once it’s complete, an ADU should show up as added value in an appraisal. At that point a conventional loan could help you pay back family or other short term borrowed funds. Typically there is not a ‘reassessment’ of theproperty; and for most, a moderate property tax impact will unfold over time after an ADU.

A little extra income can help property owners offset the cost of their mortgage or monthly bills.

Be aware that being a landlord carries both legal and ethical responsibilities. You will need to understand the requirements and nuances of operating a rental unit before finding a tenant. Check with your neighborhood and municipality about the rules surrounding rental properties as there may be licenses or permits required, fees to pay, or on-going inspections that need to be completed on a mandated schedule. Note that short-term rentals of new ADUs are now disallowed by California law. The rules for rentals may change over time, so it is important to stay aware of national, state and local law.

Only hire a contractor that is fully licensed and insured.  Verify with your own insurance agent what insurance to look for.

Contractor’s licenses can be verified online.

Does the builder have experience with the type of ADU you are planning, or at least with projects of the same scale and style?

Take the time to call several! Make sure they are credible and when possible contact people you know or trust.  It may help to have a list of questions that you use for each contact.

How can your ADU serve your needs, respect your neighbors, and not compromise privacy or other existing uses.

Where is the ADU going to fit on the property? Is there open space in the yard? An existing garage that could be converted? Maybe the existing building has an underutilized accessory structure, basement or attic space that can be remodeled. There may be a range of possibilities that fit your program, budget and schedule.

How the ADU will be used will impact costs.  For example: ADUs meant for rentals should select materials for durability and visual appeal. The cost of upkeep and maintenance will result in higher bills for water, electricity, gas, trash pickup, etc.

State law limits the use of new ADUs and JADUs for short-term rentals. Local rules may be in place to regulate noise, parked vehicles, exterior banners, lights, signs, etc.

CCRs (Codes, Covenants and Restrictions) are often created at the same time a property is legally defined. Local governments do not enforce CCRs or check for compliance, but rather they are enforced by the HOA (home owner’s association) or neighbors. CCR’s can be found by reviewing the title documents associated with an original home purchase.  If these can’t be found, a title search may be needed.  Some homes don’t have such rules or associations, while others have complex requirements for changes to a property. State law exempts ADUs from certain HOA and CCR requirements.

State law, in many cases, mandates flexibility with parking requirements. When ADUs are near transit, car share, or if they’re in an historic district, additional parking will generally not be required.

Design review can occur at several levels – at a neighborhood level by homeowners associations or on a larger city or county scale by the local planning department. ADUs are given special treatment under state law for design review under certain circumstances. An architect or design professional will typically be familiar with design constraints and options that affect your property.

The size of an ADU ranges from a maximum of 1200 square feet to a minimum of 150 square feet. There is a range of options for configuration at each scale, and the size of your ADU will depend on how it will be used, your budget and the space available. State law requires a minimum of at least 800 square feet for a studio or one-bedroom and 1000 square feet for two+ bedroom units. Some communities allow more.

When adding to an existing property, there are sometimes restrictions related to the size of the parcel. This should be considered during the design.

The California Energy Code administers an additional detailed code of energy efficiency standards that applies to all residential and non-residential buildings in the state. ADUs, just like any residential property, are required to meet energy standards for construction as related to heating and cooling, light fixtures, appliances, electricity consumption and generation among other topics. Detached ADUs may be required to meet all the standards of a new home, including rooftop solar. Attached ADUs have more energy code flexibility.

Building codes are regulations governing the design, construction, remodeling and maintenance of structures. These very extensive rules list the minimum requirements to protect the health, safety and well-being of building inhabitants and their neighbors. In California, the building codes are regulated by the California Building Standards Commission. Our statewide code must be used as a minimum in all communities in California. The California code can be amended at the local level by city or county building departments who interpret and enforce the building code in their community. State law allows more lenient building code requirements for some elements of ADU construction.

Similar to the requirements for building a new home, the building code includes long lists of construction, structural, fire, and life safety requirements for ADUs whether it is a new building, remodel or garage conversion. The code covers things like structural design, fasteners, materials, construction of walls, roofs, and floors, water resistance, ventilation, lighting, doors and windows, emergency exiting, and many other issues. While there are many books designed to allow consumers to get an overview of the code, they do not substitute for a working knowledge of the code itself. Architects work with the local version of the Building Code every day and typically know how local authorities interpret and enforce it.

An ADU can provide a nearby option for aging family members while still providing personal space and separation. Alternatively, an in-home caretaker could occupy an ADU.

Sometimes we just need a little extra room to spread out! ADUs can be used as flex space adaptable for use as guest accommodations, for special events, or even as a home office or art studio. The flexibility of a separate space can allow its focus to shift over time if your needs change.

What is their pricing structure? Are costs fixed or based on time and materials used?

How are invoices structured and how often are they sent?

How does the builder communicate?

Does their approach work with your style and schedule?

Do you like the quality of their work?

If possible, check out one of their finished projects in person!

Check online resources for contractor reviews.

Every decision and selection has both cost and value considerations. When the choices are designed to work together, the whole can become more than the sum of its parts. A leap from ordinary to extraordinary design can happen on any building project of any size, and this is exactly what hiring an architect makes possible!

The design should consider easy maintenance and cleaning in its geometry and configuration.

The upfront cost of materials and the long-term maintenance of building materials should be considered. Durable, lasting materials may cost more up front, but can save money in the long run!

Careful design can help you optimize the energy use and performance of an ADU. All facets of a design can influence energy performance. Things like insulation, high performance appliances, and energy efficient windows can be implemented to help with energy use.

It’s important to consider how the project will affect your neighbors and community during construction and once the ADU is in use. We recommend talking to your neighbors early on so they are aware of your plans and in order to start a conversation about any potential conflicts.  Your local planning department may have other requirements that are based on perceived impacts to the community as a whole, but these requirements can be tempered by state laws which encourage and support most ADU projects.

What styles are you attracted to? What materials and colors will be compatible with the existing home and neighborhood? Does the ADU need to be compatible? Are you interested in a traditional design or something more contemporary? The character of your ADU may or may not be inspired by the style of your existing home.

What type of amenities are needed in your ADU? How much space should be allotted for kitchen, bath, living and sleeping space? Is extra storage needed?

What’s the optimal orientation on this property? Where should windows, doors, overhangs, and trellises be placed? Can the building be oriented to use natural heating and cooling? How can natural light can be integrated throughout the living space?

Considering the available space, how big can the ADU be? How big does it need to be to suit your anticipated present and future needs?

What is the purpose of this project? Function should be a priority when starting the design process and objectives should be clear.  When you work with an architect on defining the scope, character, opportunities, challenges, and constraints for YOUR project, you are actually shaping the ‘program’ that becomes the framework for all design decisions.

•  The type of finishes, appliances, lighting, plumbing, doors, and windows you choose directly affect the project cost. There are numerous options for each selection in a building ranging from low cost to mid to luxury high-end. These choices do add up, even in a small dwelling.
• The style of a building will also affect your budget. Details associated a specific style will have varying complexity and cost.

There are many ways to build an ADU: Conventional wood framing, steel-framed, concrete, raised foundation, slab foundation, modular, prefab, kit of parts… and so on.  Most homes in California are “wood frame” also known as “stick frame” which is usually the most flexible, affordable and adaptable form of construction for an ADU.

Generally speaking, simpler ‘boxy’ forms tend to cost less than building forms that are more complex or curvilinear. The complexity of detailing, inefficiency in material usage and challenging construction, among other considerations, can increase the cost to build complicated forms.

Smaller projects will cost less than larger projects, but keep in mind that it is not a linear equation! Usually, the cost per square foot will go up with a smaller project simply because of a lack of economy of scale.

The supply and demand of your local building market will have a significant impact on the cost to build an ADU. Architects and contractors usually have a pretty good idea of general market costs in their locale.  Local real estate values, which you can see for free online, show the great variability in existing home values based on location.

California Law requires that local jurisdictions allow an ADU to share utilities with the main house on a property. There are also some limitations on the various fees that may be imposed on new dwellings with regard to utility connections.

The fire code is designed to protect a building, its occupants and nearby structures from both building and forest fires. The rules cover separation between buildings, materials used for construction, smoke detectors, fire extinguishers, escape windows, access for firefighters and what are termed ‘urban wildland’ standards that can make homes more resistant to forest fires.

When it comes to ADUs, California law has some flexibility in the fire code. For example, ADUs do not require fire sprinklers if the main house is not sprinklered, despite the general rule that all new homes must install fire sprinklers.

Your city or county has a unique set of rules for building projects, and therefore the rules for building an ADU will be slightly different based on your location in the state. For example, coastal locations have a unique set of rules related to views, location and environmental concerns that differ greatly from those of a property in the city.

Some homeowners may find an under-used space within the existing house that can be converted to a separate living space. Existing space conversions are given some special treatment in California laws which can limit time and cost associated with building entitlements.

These are just a few ways to approach an ADU, but every ADU project is unique! Your space might come from one or several of these options combined to create a seamless and complete separate dwelling unit.

An ADU can also be added on to an existing home. This approach often takes less space than a separate building and might make utility connections easier. Access, sound isolation, and privacy should be considered, especially if the ADU is to be used as a rental.

Second Story or basement  Addition: You may be able to add space above or under an existing home or garage. Keep in mind that most single-family homes were not designed to support a second story. The process to retrofit a structure in order to support a second floor can be very involved, and this type of addition is most often more complicated and costly than a ground floor addition. Adding a basement presents its own challenges and local conditions may limit adding a floor below. Check with your local Planning Department to see if special entitlements are required for second story additions or if local conditions may make adding a basement infeasible.

For properties with enough elbow room, it may be possible to create a separate structure for an ADU. These may be designed to match the look of the main house or take on an independent design character of their own.  In some communities, a new detached ADU may trigger additional requirements for design review.