Why Should You Build an Accessory Dwelling Unit?
The future of Silicon Valley‘s economy depends partially on giving people more options for living near their workplaces at an affordable price. ADUs AKA granny flats, in-law apartments, casitas might be one of the solutions toward closing the housing gap in our area for a simple reason: ADUs are smaller and more affordable than traditional housing options and would help low- and moderate-income renters weather the skyrocketing housing costs.
The benefits for both homeowners and renters are easy to see: renters are searching for relief from high housing costs and ADUs can be an excellent investment for homeowners. It’s a win-win situation requiring minimal compromise.
Why Investing In An ADU?
An accessory dwelling unit (ADU) is a secondary housing unit on a single family residential lot. It can be attached to the primary house like a converted garage, or unattached like a freestanding cottage. Homeowners can create ADUs from new or existing structures.
1. ADUs offer a stable rental income for homeowners who choose to rent their unit. Homeowners looking to build or repurpose a structure in their backyard, garage, home or basement will have little trouble finding competitive renters.
2. Homeowners will also find that adding an ADU is oftentimes an affordable investment. For instance, repurposing an existing structure like a garage or basement is cheaper than buying an investment property since most homeowners already own the land on which they might build or repurpose their ADU, they won’t have to clear this extra financial hurdle.
3. One study found that ADUs contributed between 25% and 34% of each property’s assessed value, according to the Appraisal Journal (https://bit.ly/1H1bSHc). Nevertheless, bear in mind that this figure may vary depending on where the ADU is located. Therefore, only a local real estate agent may be able to help you evaluate the added value to a home when building an ADU.
How Difficult Is It To Create An ADU?
Since 2016, we saw a real shift regarding the legislation pertaining to the construction of AUDs. California lawmakers now recognize ADUs’ potential to help alleviate the state’s housing crunch. Below is a recap of the key recently enacted, ADU-friendly laws include:
Senate Bill 1069, which prohibits parking requirements if the ADU is within a half mile from public transit;
Assembly Bill 2406, which authorizes local governments to allow for the construction of junior accessory dwelling units of no more than 500 square feet and fully contained within an SFR. It also prohibits local agencies from requiring additional parking requirements for junior ADUs, treating these tiny units as part of the same SFR unit when it comes to installing water, sewer and power so a separate connection fee cannot be required for the junior ADU.
Assembly Bill 2299, which loosens regulations around all types of ADU. The new law:
a/ Limits parking requirements for all types of attached or unattached ADUs to one parking space per unit or bedroom and provides maximum standards a local government is authorized to issue on ADUs (for example, an ADU may be built on the property even if it is zoned for SFR use only);
b/ Removes the setback requirement for ADUs built inside an existing garage;
c/ Limits the setback requirement to no more than five feet from the side and rear of the lot for an ADU built over a garage.
As the result of these "pro" ADUSs legislation, in the city of San Jose, for instance, ADUs are permitted where most single-family homes exist, if it meets the standards outlined in the Municipal Code and as applicable in planned development (PD) districts. More specifically, ADUs are allowed in residential R-1, R-2, and R-M zones, and in PD zones as allowed by the covenants of the PD zone.
Feel free to contact me to get your free handout of the city of San Jose ADUs, requirements and/ or any other city in Santa Clara County.