Why Building an ADU Might Be Your Best Investment Yet
In "All About ADUs", Catherine Gaugh delves into the fascinating world of Accessory Dwelling Units (ADUs), uncovering the myriad benefits and possibilities these structures offer in San Diego. From maximizing property value to providing flexible living arrangements, Gaugh's interview with architect Lily Robinson explores how ADUs empower homeowners to optimize their spaces for modern living. She offers an essential guide for anyone considering the construction of an ADU, shedding light on the transformative potential these additions hold for communities and individuals alike. Valley Habitats is more than happy to take on any style ADU you'd like. Contact us below to get started!
Part 1: Architect shares insight on adding an income unit
Accessory dwelling units (ADUs) have become an increasingly valuable option for homeowners looking to add rental income or house extra family members.
We recently spoke with Lily Robinson, a San Diego-based architect and current president of the San Diego chapter of the American Society of Interior Designers (ASID), whose specialties include the design and permitting of ADUs in single-family neighborhoods. She also lives with her husband in an ADU that she designed.
We are sharing our interview with Robinson in two parts. Part 1 explains the reasoning and requirements involved with ADUs and Part 2 will explore the ADU experience.
Q: Could you first explain what an accessory dwelling unit is?
A: An accessory dwelling unit, or ADU, is a new name for an old idea. A second residence located in the backyard, or over the garage, may have been referred to in the past as a guest cottage, a casita or a granny flat. In San Diego, it could be permitted as guest quarters for extended family or a companion unit to generate rental income.
In 2016, the state Legislature passed SB1069, which defined and legislated these second units. It essentially aims to create more affordable housing in single-family residential zones as a grassroots movement. Rather than having big developers come in, the law gives individual homeowners the ability to be the developer for their own properties.
Q:I remember there was some initial panic about how that would affect the character of established neighborhoods. People had fears that single-family homes would be torn down and replaced with four houses on one lot.
A: There was a lot of confusion about the original bill, so it was amended twice, in 2017 and 2021. Now the rules say that a homeowner can have up to three rentable units on each lot: the main house, an ADU, and a Junior ADU (JADU).
The difference between an ADU and a JADU is mostly size. A JADU can’t be more than 500 square feet and must be built within the existing footprint of the main house but with a separate entry. It can share the kitchen and bathroom with the main house.
An ADU can be up to 1,200 square feet, depending on the size of the main house. It has a full kitchen and bathroom and its own mailing address. Even so, it is considered part of the original property. You can’t sell it separately from the main house.
Q: What’s the benefit of an ADU for homeowners?
A: The presence of an additional rentable unit instantly raises the property value. The real estate professionals have known this all along. So why not make an investment in your own property?
Every penny you put into an ADU, you get back and more. If you have a house in a single-family zone, don’t sell it. Develop it.
For example, if you want to downsize, don’t buy a generic, cookie-cutter $600,000 condo. Think about converting your garage or building a new, smaller, custom-designed home in your backyard for about half the cost. Live in it. Rent out the main house or offer it to your children or someone you know who might not be able to afford to buy their own house. Rental income will be a good source of revenue in retirement.
Q:What do you think about the prefab ADUs we see advertised? They come in different sizes but seem pretty standard.
A: Manufactured homes are OK if you’re only going to use it as a rental. I would hope you’d go for a custom design for yourself. You might want some flexibility and a little character. But either way, you must get permits, so you still need professionals to draw up site plans, submit engineering details and deal with inspections.
Q: Do cities get final say on the permits?
A: Cities can regulate the ADU process, but the state law says city and county regulations can’t be more restrictive than the state guidelines on property size, setbacks and parking. The City of San Diego is pretty lenient.
Q: How much does an ADU cost to build?
A: The average cost of a house in San Diego is $790 per square foot. Currently, ADU construction cost ranges from $300 to $600 per square foot, depending on the site condition and level of interior finishes.
The great news is that California offers some attractive incentives including grants to cover pre-development such as design and permit fees. The California Housing Finance Agency provides up to $40,000 grants to homeowners to use for the fees and expenses involved in building an ADU. It’s not a loan; you never have to pay it back.
That brings the overall cost of the project way down. Do your homework and see if you qualify. Apply for the grant before you stick a shovel in the ground.
Q:What’s the main concern people have about ADUs?
A: The No.1 fear people have is the cost of construction. They worry about little changes, but they don’t see the big picture. From my perspective, it takes almost the same amount of time and effort to add 120 square feet to your property as it does to add 1,200 square feet.
Getting permits is time consuming, so I advise clients who want to apply for a small addition to the main house — such as an extra bathroom, bedroom, or larger kitchen — also apply for an ADU at the same time. They can decide about building it later.