ADUs in California: What You Need to Know
You may know Accessory Dwelling Units (ADUs) better as “granny flats,” “in-law suites,” or “guest houses.” These are secondary, independent housing units that are built on the same property as a single-family home. In recent years, ADUs have significantly risen in popularity across Sacramento and Northern California as the state has passed legislation making it easier and more affordable than ever to add these units to your property. They offer a substantial range of real benefits, from potential rental income to extra housing for family members and significant gains in property value. As renovation and building experts, we’ll summarize the key ADU legislations and show you how to take advantage of them to your benefit.
What Is an ADU?
An Accessory Dwelling Unit is a small, self-contained residential unit that must include a kitchen and bathroom. Depending on your situation, there are various ways for you to incorporate one on your property. If you have the space, you can build a unit fully separated from your home, or simply convert your garage into an ADU to optimize your current layout. The ability to create ADUs as either attached or detached units makes it a possible upgrade for many homeowners.
Why Are ADUs So Popular Recently?
ADU construction has recently surged in Northern California, as homeowners across Sacramento, Davis, South Lake Tahoe, and The Bay area have begun taking advantage of California’s legislative promotion of these units. The housing shortage coupled with increasingly rising costs across our region has motivated several key pieces of legislation that streamline the approval process, remove barriers, and reduce fees for ADU builders. This has given homeowners a way to spin rising housing costs to their benefit, opportunities for passive income, and capacity for expanded living arrangements. The state of California is all-in on encouraging homeowners with tangible support to make use of their existing property by constructing ADUs.
Pro-ADU Legislation
SB 13 (2019): Reduced Fees and More Flexibility
This bill prohibits local agencies from imposing impact fees on ADUs under 750 square feet and significantly reduces fees for units over 750 square feet.
It also eliminates the owner-occupancy requirement, meaning homeowners no longer need to live on-site to build an ADU.
These changes make ADU construction a lot more affordable than before, so more homeowners can use their property to expand their estate without excessive financial barriers.
AB 68 & AB 881 (2019): Streamlined Approval Process
These two bills require local agencies to approve or deny ADU applications within 60 days, significantly reducing the approval timeline and granting consistency to build schedules.
They also removed certain zoning restrictions, increasing the areas and neighborhoods where ADUs are allowed.
These changes have streamlined the process for interested parties and enabled them to start and finish their ADU builds quickly, while opening the opportunity to an increased number of homeowners.
AB 670 (2019): Homeowners Association (HOA) Restrictions Lifted
This bill restricts HOAs from unreasonably prohibiting the construction of ADUs on single-family residential lots.
This places power back into the hands of individual homeowners, enabling many people to consider ADUs without the previous restrictions or added pressures of HOA regulations. It’s important to stay informed about your rights, especially in cases like this.
Californians’ Response to the Legislations
According to a report by California YIMBY (Yes In My Backyard), applications for ADUs increased by 11% statewide in 2021, to the point that 19% of all new housing units in California in 2022 were ADUs. It’s clear that the pro-ADU legislations have presented real opportunities to homeowners that weren’t previously available. Californians’ quick acceptance of ADU construction as a viable option to creating practical and profitable advances in their lives shows that the fewer restrictions, lower fees, and streamlined process make this the perfect time to build an ADU.
The Real Benefits ADUs
Passive Income Opportunities: Northern California’s rental market is thriving, especially in the greater Sacramento area. An ADU can quickly become a lucrative source of rental income, as homeowners can charge anywhere from $1,500 to $3,000 per month depending on the unit’s size and amenities.
Property Value Increase: ADUs can raise your property's value by up to 30%. As well as the pure monetary increase, buyers are more willing to pay a premium for homes with flexible living spaces, making your ADU a sought-after investment.
Long-Term Savings: You can use your ADU as a long-term solution for your aging or growing family, saving money on the housing costs for your parents or children as they age.
Work-From-Home Space: As our working habits trend towards more remote work, ADUs can serve as a dedicated home office and provide a quiet and productive workspace separate from the distractions of your traditional home.
Guest Accommodations: A common use of ADUs is as a guesthouse that offers friends and family a comfortable place to stay at any time of year without disrupting the main household.
Your Local ADU Experts
Building an ADU may seem like an overwhelming task, but the recent changes in California’s ADU laws has made this the best time to break ground on your dreams. Whether you want to create rental income, accommodate family members, or just add substantial value to your property, an ADU is an incredibly flexible and profitable addition to your property.
If you’re in the Northern California area, HEX General Contractors has all of the expertise to provide professional guidance and a custom build for your families specific needs and goals. With extensive experience in designing and building ADUs, from interiors to exteriors and everything in between, our team will walk you through the entire process, from obtaining permits to cutting the ribbon on that final day. We understand the latest state laws and local regulations, ensuring that your ADU project is efficient, affordable, and meets all requirements.
Contact HEX today for a free estimate, and let us help you transform your property with a high-quality, custom ADU. Whether you want to boost your property value, generate rental income, or create more living space, we have the expertise to make your ADU dream a reality.
