Accessory Dwelling Units
An Accessory Dwelling Unit (ADU), also known as “in-law unit” or “granny unit” is a small habitable unit built on your property that serves as a second house. They allow for increased density without needing to divide up parcels. These can be used to house family members and guests, or used to rent out for some extra income.
Many homeowners find that they have space for their immediate family, but then circumstances change, and they need a little something more. From kids wanting a space of their own while attending college, to elderly parents wanting a nice place to stay close to home, an ADU is a wonderful way to keep family close, while still allowing them the autonomy of their own place.
Building an ADU can also be a good way to make some extra monthly income. If you have the money in the bank to build an ADU, it can be a good way to supplement monthly cash flow. According to a UCSC analysis, the 2017 average rental price of an apartment in Santa Cruz was $1,697 for a 1BR and $2,444 for a 2BR. This can not only bring in a good cash flow, but provide a good investment opportunity as well.
ADU’s can provide a great deal of security and versatility. We have had several clients use an ADU as a rental unit, then use the unit for their relatives later. Others have used the ADU for their family members, then later the family situation changes and they use the ADU for rental income.
One important condition to note is that the homeowner must occupy either the main home or the ADU. This is true whether the homeowner built the ADU or not; this restriction applies to any future owners of the property as well. Also, ADU’s cannot legally be used as short-term vacation rentals, they are for long-term tenants or family only.
In order to qualify as an ADU, the structure simply needs a sleeping area (which could be a full bedroom or even a simple fold-out sofa bed), a bathroom, and a kitchen. ADU’s can range in size from as small as 150 sq. ft. to 1,200 sq. ft. depending on need and specific zoning. There are a number of ADU types available, depending on parcel size, spacing, and overall needs of the homeowner:
This is like an addition to the main house, but is walled off to be a completely separate unit. This is similar in concept to a duplex, with two main exceptions: the size of the ADU is restricted based on the property size, and one of the units must be occupied by the homeowner. With a duplex you can rent out both units, but with an ADU the owner must live on the property. However, it doesn’t matter whether the owner lives in the main house and rents the ADU, or lives in the ADU and rents out the main house. Generally, attached ADU’s must match the overall aesthetic of the main house.
Building an attached ADU involves the same design and construction work as any addition, while also requiring a bit of extra steps to ensure that it is separated enough to be its own unit, and not just an addition. It also has different permitting requirements, and must meet its own energy requirements, power distribution, etc.
It is often possible to convert part of an existing home into a separate unit that can be used as an ADU. This usually involves some redesign work, some minor electrical to separate the units electrically, adding some extra fireproofing, moving walls and doors, etc. Also, some work will be required to provide the ADU with its own bathroom and kitchen. If you have the extra space that you would like to turn into an ADU, this may be a great way to go.
A detached ADU is effectively a second home on the property. It is a self-contained structure that has all the features of a standard single-family home. These are allowed to be a bit more varied in design, and do not have to match the main house. They can be placed most anywhere on the property, so long as they are a sufficient distance from the property lines. How far depends on zoning and whether it is near the front, back, or sides of the property.
Building a detached ADU involves all the same steps as building a full single-family home. While it is much easier to get an ADU permitted than a regular home, effectively all of the same steps are required. Thus it is extremely useful to partner with someone who has extensive experience, and can navigate the complex permitting landscape.
Have a garage and don’t have the space for another building? An above garage ADU is a great solution. This process involves architectural design and construction of a new livable unit usually accessed via an external staircase. There are less stringent requirements for setbacks for these types of ADU’s, so it can be a great option for homeowners with limited space.
Sometimes homeowners find that it’s actually easier to simply turn an existing garage into an ADU. This usually involves redesign work, closing off the wall where the garage door is, adding insulation, utilities, etc., and ensuring that the foundation is solid enough to meet building code. Whether you have a one-car or two-car garage, a garage conversion can be a great option. It is even sometimes possible to convert part of a large garage into an ADU and still have garage space. This is usually the cheapest option also, as you can forego water and sewer hookup fees.