There is a great variety of ways to upgrade your living environment. Creating Accessory Dwelling Units (ADUs) is one of them. Plenty of people have back houses, so-called granny flats, casitas, or in-law units, and they don’t know how to efficiently use these spaces. This is when ADUs come in place. Affordable housing still is a big issue for most homeowners, especially when extra work or living space is much needed. There are special services that can help you turn your old underutilized garage, a backyard, or any other vacant facility into a high-quality dwelling unit at affordable prices.
If you have been seeking to expand your housing options recently, this piece is definitely for you. As ADUs become more and more popular all over the country, we decided to accumulate the most frequently asked questions on the topic and are now bringing the answers to your attention.
Why Would I Want to Build an ADU?
A Home and Community Preferences Survey made in 2019. The researchers had interviewed a group of people aged 50-plus, and the results had shown that most of them consider building an ADU in the nearest future. The most common reasons behind it were the following ones:
- to provide a home for a significant other in need of care;
- to provide affordable housing for relatives or close friends;
- to create a safer and more comfortable environment by having someone live nearby;
- to create extra space for receiving guests and having them stay over;
- to increase their housing value in the market;
- to create space for a caregiver to live;
- to get income from leasing the place to tenants.
Can One legally Build an ADU?
Today, the answer is absolute. California authorities passed a series of laws back in 2016 that effectively removed a ban on building ADUs on the territory of already existing single-family houses. Three years later, the local legislature accepted Assembly Bill 68, which removed some restrictions regarding ADUs. Now, it is allowed to build them on multi-family properties as well, including duplexes.
If you want to find more information on the newly established norms and procedures, do get acquainted with the Bill text.
Are an ADU and a Guest House Any Different?
An ADU does differ greatly from a guest house. The latter is a permanently constructed unit without any kind of cooking facilities, which makes it subordinate to the main building. It can exist as an attached or detached accessory building, but one cannot rent or lease a guest house separately from the main dwelling unit. New California regulations do not affect guest houses. However, the state laws may now enable homeowners to convert their guest houses into ADUs, provided certain conditions.
How Much Space Do I Need to Build an ADU?
A mediocre ADU requires a backyard accommodation of approximately 20’ x 24’ footprint available for construction works and a minimum of seven-feet of сlearance from the main house. You may as well use your existing old garage for this purpose and redecorate it, or remove it completely with a brand new ADU. If your backyard has enough land, you can create a new ADU construction along with existing facilities.
How Much Does It Cost to Build an ADU?
Nowadays, companies use innovative building techniques that allow for cutting construction costs significantly. You can contact a company representative and negotiate ADU installation appliances at a fixed price. You also can find the website of the company you like most and use an online calculator to estimate the approximate pricing. Some services even provide a free comprehensive inspection of the property and suggest the cheapest solutions based on the findings. Additional costs may occur regarding new property security insurance.
How Long Does It Usually Take to Build an ADU?
Construction companies tend to install several ADUs in the same area simultaneously to cut expenditures and make the construction process more efficient. This means that they will not start working until they get all the papers signed. Homeowners need to take that into account. Therefore, you might ask around if your neighbors need an ADU as well to help speed the construction process. Provided there are no other obstacles, and an ADU takes about six weeks to build
What If the ADU Looks too Unwieldy?
If you are worried about the fact that a new facility might take up too much space on an otherwise small piece of land, worry no more. ADUs were designed to include smaller homes with minimal visual impact on the general neighborhood look. They often get community approval much easier than multistoried apartment buildings.
How Do You Manage Parking Situation?
Most zoning codes do address the amount and placement of parking lots. Some of them do not even require any additional parking spaces for ADUs. The best option here would be to find some middle ground and try to negotiate the possibility of tandem parking or on-street parking.
Can I Design My ADU However I Want?
ADUs can come in any design you want. But, there are certain standards when it comes to a specific neighborhood. The local norms may dictate the ADU’s roof shape, siding type, and some other visual features that need to match the primary dwelling style. Some local codes make exceptions for one-story and internal ADUs that do not affect the general neighborhood image.
Are There Any Construction Setbacks?
Many communities do have requirements for detached ADUs. The new dwelling units have to be discreet and be located either behind the primary building or far enough from the street. See your local code requirements for more details and specifications. This rule may not apply to neighborhoods with large property possessions and bigger backyards. Those communities may have way more flexible setbacks and placement strategies.
Can One Rent or Lease an ADU?
As we have briefly mentioned above, one of the greatest advantages of an ADU compared to guesthouses is the ability to rent or lease it. If you own an ADU, you can get a good steady income, depending on the rental rates in your area. Certain home refinancing options may help you lease the ADU at a much better rate. You may search for them online and get familiar with the programs.
Is an ADU Dependant on the Owner?
Some city jurisdictions require that the property owners live on-site of the ADU, either in the primary house or other facility located on the property. This is a common way of addressing concerns that in the absence of the landlords, the ADUs might fall into disrepair and negatively impact the neighborhood image.
Do ADUs Work For a Long-Term Rent?
Most ADUs happen to work better for short-term rental agreements. The dwelling units are usually small, and the owners tend to live on-site, which is not always very convenient for the tenant. People use the ADUs during vacation getaways and other occasions but very rarely for a long-term stay. However, serving as short-term rental dwellings, the ADUs undermine their basic objective of making local housing affordable.
Is It Possible to Deduct ADU Related Income From Taxes?
Such a possibility does exist. Some programs of Finance of America suggest rental property owners and homeowners that choose them to deduct a certain share of their rental mortgage interest, insurance costs, property taxes, and utilities spending.
Will the ADU Affect the Owner’s Insurance?
A newly established ADU owner needs to contact his or her insurance company representative and inform them of the fact of a potential tenancy. The company employees will increase your annual contribution to cover new expenses and liability. Some insurance companies provide a $1 million coverage on the ADU for the entire lease term.
Will the Property Tax Go Up Once an ADU Is Built?
They will, but not too much, so do not get alarmed. When you finish the construction works, local authorities will perform a blended assessment, which, in turn, does not affect the value of your existing property in any way. The assessment concerns the construction costs, which are then added to your original property value. Normally, property taxes tend to increase by only 1,1 percent of the total cost of the alterations made, which is an annual couple of hundred dollars extra.
Can A Managing Company Take Care of the Lease?
The construction company may offer you management services for your new dwelling unit. For a certain share of your income, they will find you perfect tenants, facilitate legal procedures, and maintain your property in order. If you are busy and do not want to get involved with the tenants yourself, you may find this offer attractive.
What About the Environment?
ADUs require way fewer natural resources to build and maintain than full-sized dwelling units. They also consume significantly less energy for both heating and cooling. You may find it fascinating that all ADU types tend to have the lowest operating costs, and therefore, produce less harm for the environment.
Do the ADUs Suit People of All Ages?
As we undergo some changes over time, our housing does too. You can adapt your ADU to suit your relevant, up-to-date need and requirements. One can use an ADU for different uses, household types, income levels or employment, and, of course, stages of life. All ADUs are age-friendly. Thus, young people can resolve affordable housing issues; families can provide extra space for their elderly loved ones, and generally expand beyond their main home.
What Happens to the ADU If I Decide to Sell My House?
An ADU is a great investment that pays off in a long-term perspective. You may not want to say goodbye to it. But if such a necessity occurs, you can sell your property for a much higher price with an ADU. A recent survey data analysis shows that an average ADU can help increase your housing value by at least $140,000. And that is a pretty good-looking nimber.
Building Accessory Dwelling Units is a good American tradition. Back in the days, settlers used to build a small dwelling unit first while still building a bigger house. Nowadays, ADUs have proven to be a great solution for improving the existing infrastructure and making small living spaces more functional. They are environment-friendly and respect the local lifestyle.
With the rapid growth of suburban areas, the ADUs help resolve an important housing issue. As more and more people move to the suburbs, the demand for real estate increases significantly, and so does its value. Affordable housing has been a serious issue for California lately. That is why, over the past few years, local governments and municipalities have supported so many ADU-related initiatives. The legislation responds to the social demand, lifts most of the existing restrictions regarding ADUs construction, and is planning to take further action in this direction.
Before building an ADU, we strongly advise you to do market research and examine the existing proposals. Check if any of your neighbors are planning on building an ADU and cooperate with them on this matter. As we have mentioned above, construction companies tend to take multiple orders in the same area, and having several orders simultaneously can significantly boost up the construction process.
Remember that you can use any underutilized facility you own to convert it into a functional and cozy Accessory Dwelling Unit. If you have a spare basement, an empty garage, an old existing unit, or even some extra backyard space, you can always give it a new life. ADUs are very multifunctional. You can create them to be an extra workspace, a place for your guests to stay overnight, a new home for elderly loved ones, an affordable housing option for young families or those in need, or a workshop of your own. All of these options are available to modern homeowners.
The local legislature now supports most of the ADU-related initiatives. But we suggest you go through the newest zoning codes’ and planners’ editions just to make sure that they do not impose any restrictions or prohibitions.
We sincerely hope you found this piece informative. If you happen to have any more questions, check out our latest refreshments on the topic.