New Laws Make ADUs Easier

What’s all the buzz about Accessory Dwelling Units (ADUs) and the new California laws promoting them in 2020? One of the numerous new laws coming into effect January 2020 makes it much easier to build ADUs in existing residential neighborhoods.

Up until now, families who have wanted to add an ADU (commonly referred to as in-law units, granny flats, detached cottages) had to endure a process of public hearings and permit regulations that could take 18 months to two years. No more. Due to the housing shortage being felt across the state, homeowners are now allowed to get permits to build an ADU on their properties in 60 days — without any public hearings or neighbor notifications.

In general, the permit fees have been reduced, parking requirements have been reduced or eliminated, and so long as your ADU is under 1,200 square feet, a building permit can be secured in 60 days or less. This new law has far-ranging consequences and might make creating an ADU on your property a good decision for you in 2020.

The uses of ADUs are myriad and can be adjusted over time as the housing needs of your family change. Most obviously, you can rent out the unit to a tenant and enjoy the extra income. Many families use ADUs to provide housing for an aging parent or a post-college child. Still, other uses include a guest house for visiting relatives or a home office. A well-designed ADU can accommodate all of these functions and flexibly rotate between each function.

Urban Building Workshop has three prototypes we are offering as a single point of contact solution for a family seeking to build an ADU on their property. We handle all the design, engineering, permitting and building for a fixed sum. This takes the headache out of the process and potentially allows you to go from start to finish (collecting rent) in under a year.

A quick survey of rents in Southern Marin indicates that a one-bedroom ADU would rent for between $2,600 and $3,200 per month. Assuming tax and insurance costs of around $450 a month and a rent of $2,900, that is an annualized return of 7.4 percent. Not bad!

And, for many people who have substantial equity in their homes, it’s possible a HELOC could be used to pay for some or all the cost of the ADU. Even after the mortgage payment, you’d be putting money in your pocket.

Further, as values for new homes in Southern Marin are approaching $1,000 per square foot, spending $460 to $500 per square foot to build an ADU is clearly a value-enhancing decision should you decide to sell your home.