ADUs are small, self-contained residential units on the same lot as a single-family home. They have all the basic facilities needed for day-to-day living, such as a kitchen, sleeping area, and a bathroom, and may be attached to or detached from the primary residence.
Over the last several years, ADUs have exploded in popularity as homeowners look to accommodate multi-generational living and lessen the burden of senior care (these structures are dubbed “granny flats” or “in-law suites”), provide children fresh out of college with an affordable place to live, host out-of-town visitors, or generate additional income from tenants. The pandemic also contributed to the rise in ADU builds, with people wanting separate work-from-home spaces or extra living spaces outside business hours.
The shortage of homes and lack of affordable housing also put ADUs on the map, with some jurisdictions around the country changing ADU regulations to accommodate the need for more housing.
Changes to ADU Regulations in California
Over the last several years, California enacted several ADU regulatory changes to make the units easier and more affordable to build. The most recent bills that took effect January 1, 2024, include:
- AB 1033: Historically, local jurisdictions did not allow the separate sale of ADUs from the primary dwelling for owners, investors, and developers. Assembly Bill 1033 allows homeowners to sell one or more ADUs separately from their primary residence.
- AB 434: All California cities and municipalities must have a pre-approved ADU plan scheme by January 1, 2025. For plans to be pre-approved for use by applicants or other property owners in the future, cities must review and accept submissions for them, typically by an architect. Cities may choose to charge a fee for access to the designs, processing, and any modifications required to meet property-specific requirements.
In 2023, California revised ADU height restrictions as follows:
- 16 Feet: Allowed under any circumstances
- 18 Feet: Allowed if the proposed ADU is within a half mile of public transit or the property already has a multi-family dwelling two stories high
- 25 Feet: Allowed if the ADU is attached to the primary dwelling, depending on the property’s underlying zoning code (the lowest will apply)
Regulations in Other States, Cities, Counties
Oregon eliminated single-family zoning statewide and permits multiple units to be built on any lot (with required setbacks).
This year, the Arizona Senate passed a proposed bill that stipulates any municipality with a population of at least 75,000 should allow any lot with a single-family home to build at least one attached or detached ADU. The proposed bill, if it becomes law, would also ban cities from prohibiting advertising the ADU on the lot as a separately leased long-term rental. In addition, municipalities would be barred from requiring an ADU resident to be a relative of the people living in the single-family home on the same lot. The regulations would also bar requirements to include a kitchen and additional parking and prohibit mandated setbacks more than five feet from the property line or requirements that the ADU match the exterior design, roof pitch, or finishing materials of the single-family home.
In 2022, Spokane, Washington, loosened some of its restrictions on ADUs. The state removed a requirement that owners must live in the main house on the property where the extra units are built, and it ended parking requirements. The city also expanded the allowable size of ADUs.
Miami-Dade County, Florida, recently began creating a legal pathway for homeowners to rent attached or detached units on their properties.
Denver, Colorado, is making it much easier to add ADUs to existing properties. The goal of their new regulations is to ease housing shortages by adding homes large enough for families. For example, Denver City Council approved a neighborhood-wide rezoning change allowing residents to construct ADUs without applying for individual rezoning permits. Similar measures quickly followed in other Denver neighborhoods.
ADU regulatory changes have not come without a fight. There are concerns over noise, parking, and privacy loss among homeowners in the neighborhood. In addition, municipalities worry that there will be an influx of outside investors buying properties for short-term rentals, further contributing to the housing shortage in certain areas.
Marketing ADU Construction Services
With the popularity of ADU builds, it makes sense for contractors to strike while the market is hot. It’s an area of potential growth in a contractor’s local market. When crafting a marketing message, let people know you are well versed with the state’s and city’s ADU regulations. Also, advertise your knowledge of the city’s permit policies. In addition, because ADUs are built on an existing site with limited space, there are challenges to building them that don’t exist on an empty lot. Let potential clients know you know what machinery to use and how to develop the site with the least possible disruption to the property.