Here is Why You Should Build an ADU in Los Angeles

Jun 24, 2022 | ADU

Cities all throughout California are encouraging the development of ADUs, and it is no surprise why. As of 2020, there were around 161,548 people experiencing homelessness on any given day in California. In Los Angeles County alone, there were 66,433 (a 12.7% increase from 2019), and the city of Los Angeles counted 36,165 (a 14.2% increase from 2019). The 2022 homeless count results will be released soon. However, after the pandemic, there is the worry that these numbers have continued to rise.

As a way to combat this growing homelessness crisis in vulnerable cities like Los Angeles, which have high rents combined with a dense population, the state and local governments have been encouraging the development of additional dwelling units (ADUs). Read on to find out the benefits of building an ADU in LA and why ADU development is so important in this county.

LA Housing Crisis

The growing rate of homelessness in Los Angeles is due to two main factors: high rent prices and a dense population.

As of February 2022, the average rent in Los Angeles was $2,661, a whole $1,033 more than the national average at the time. Based on the latest statistics, the average LA household spends around 37.8% of its household budget on housing alone. This is significantly higher than the national average of 33.8%. So, if you live in LA, you need to expect to put most of your income towards having somewhere to live.

The U.S. Department of Housing and Urban Development defines an affordable dwelling as “housing on which the occupant is paying no more than 30 percent of gross income for housing costs, including utilities.” Since most LA households are spending well over 30%, it is safe to say that LA does not have very many affordable dwelling options available.

The other aspect of the housing crisis is simply that there are a lot of people in LA. Los Angeles is the most densely populated city in California with 3,973,278 people as of the latest American Community Survey. The second highest populated city is San Diego with a whopping 2,558,733 fewer people than LA. With so many people and high rent prices, it can be difficult to find somewhere to live.


New ADU Laws

To help combat the growing housing crisis throughout the state of California, The California Health and Safety Code (HSC), Section 65583(c)(7) went into effect on January 1, 2021. It requires cities and counties to develop plans to promote the development of additional dwelling units to rent out to low-to-moderate income households. Several state grants and financial incentives have already been created to encourage ADU development.

One specific grant, the CalHFA’s ADU grant program, grants individuals up to $40,000 for ADU pre-construction costs. Like with most things in life, there is a catch. You need to get a loan from a pre-approved lender in order to qualify for the loan. This can be off-putting for people who want to pay by other means.

You can talk with an ADU expert to see which grants and financial incentives you should take advantage of to build your additional dwelling unit. Although all loans and grants have their strengths and weaknesses, there is sure to be one that will work best for your needs.


Los Angeles ADU Program

The Los Angeles Department of Building and Safety (LADBS) launched an initiative called the Accessory Dwelling Unit Standard Plan Program. This operation has made the permitting process much faster and less expensive by offering pre-approved designs. By offering standard plans, less time is needed to go over them, meaning you can get to building your ADU much quicker.


What Is An ADU?

Like many cities throughout California, Los Angeles has turned to additional dwelling units as a way to provide housing to low-income families. ADUs offer a way to maximize the income potential of your property and offer affordable housing for low-income families. What exactly are they though?

As a general rule, an ADU is a small residential unit that is built on a single-family lot that contains an existing primary home already on it. They can be used in a variety of ways to benefit homeowners and the surrounding community. 

There are several reasons for Los Angeles individuals and families to consider building an ADU. There are different types, sizes, and benefits to having one, making them versatile enough to meet everyone’s needs.


Types of ADUs in LA

There are four main types of ADUs that you can build in Los Angeles, or anywhere for that matter.

  • Attached ADU
  • Detached ADU
  • Garage conversion ADU
  • Internal ADU

An attached ADU shares a wall with your primary home and often has a door leading between the two. A detached ADU is a stand-alone unit somewhere in your yard. A garage conversion ADU is created by taking your pre-existing garage and updating it to become an ADU, and an internal ADU is inside your primary house.

When it comes to garage conversion, you can either convert the whole garage or just the second floor. As long as the ADU section meets all ADU requirements, it can be considered an ADU.

It is important to remember that no matter what type of ADU you build, all types must have a kitchen, bathroom, and living area.


Junior ADUs

Besides the four main types of ADUs, there are also Junior ADUs. A Junior ADU (JADU) is a secondary unit no larger than 500 square feet located on the same lot as a single-family home. It can be on the same plot of land as an ADU but must be attached to the primary home.

Essentially, a JADU is a small attached ADU (or attached garage conversion) that can share a bathroom with the main residence and does not need its own entrance.


LA ADU Size Limits

The reason ADUs are such a good resource for affordable housing is due to their size limits. Regardless of what type an ADU is, it must be at least 150 square feet. The maximum square footage an ADU can be in Los Angeles is 1,200 square feet. An attached unit can be a maximum of 1,200 square feet, or half the size of the existing residence, whichever is smaller.


ADU Prerequisites

Most people meet the prerequisites needed to develop an ADU on their property. The main requirement is that there is only one single-family home on your property. You can’t build an additional dwelling unit on an apartment complex or on a plot of land that does not already have a primary residence on it.

If you have a single-family home on your property, you need to meet just one of the other following requirements.

  • There is enough space in your yard to accommodate at least a 500-square-foot unit
  • You have a garage or accessory unit in your backyard you want to convert
  • A room within your home that can be converted into a unit with its own entrance/exit

Before you can begin planning your ADU, you also need to be aware of the ADU zoning laws in your area. Los Angeles has multiple geographical regions with different zoning laws that apply to things like height restrictions, setback requirements, and natural disaster requirements. Knowing the laws that apply to you is key in determining whether you can build an ADU in your yard.

To determine if an ADU is feasible for your property, you can undergo an ADU feasibility study. This will allow you to see what type and size ADU you can build and where on your property it can be built.


Benefits Of an ADU In LA

Now that we know what an ADU is and that most single-family homes are eligible to build one on their property; let’s dive into why anyone would want to build one.


Extra Income Opportunities

The main reason most Los Angeles homeowners choose to build an ADU is the rental income opportunities. You can rent out your unit and use the money to pay off your ADU development expenses or to put towards whatever you would like. For example, use that extra income to buy a new car or pay off your student loans.

Some people use ADUs for house hacking purposes. To do so, they live in their ADUs and rent out their primary home to bring in more rental income from renting out a larger space. They do this until they have used the rental income to pay off their mortgage, and then they move back into their primary home and rent out the ADU.

One important thing to note is that Los Angeles does not allow you to rent out your ADU short-term on sites like Airbnb. You can only do long-term rentals. This is because the purpose of promoting ADU development is to provide affordable housing for struggling individuals in LA, not to promote more tourism. Airbnb is typically used for vacations, hence why LA doesn’t want you using your ADUs for this reason.


Help Combat the Homelessness Crisis

If you are interested in helping your community, you can build an ADU yourself to help get someone off the streets. ADUs are much smaller than regular homes and even most apartments. Due to this, they are a lot more affordable to live in rent-wise than a big house or large apartment.

ADUs are also more affordable to build than a full house. This means that less money is needed to go towards building more homes for more people.


Multi-Generational Housing

Some people build additional dwelling units to house their loved ones instead of renting them out to make money. They use the extra living space as somewhere free for their family members to stay.

The most common example of this is building an ADU to house aging parents. This way, the elderly parents can maintain a level of independence but still be near their kids if they need something.

Another example is to house aging kids. When children turn 18, they often seek more independence but are not always ready to make it out in the expensive world on their own. An ADU allows them independence and privacy, without having to pay for it.


Retirement Home

Aging homeowners often build an ADU for themselves to move into in a few years. This is often the case when they know their kids are going to move into the primary home to take care of them as they age. By building the ADU, they can stay living on the same property instead of having to move into a nursing home or directly in with their kids.


ADU Guest House

For people who regularly have guests that visit for long amounts of time, having a guest house can be life changing. Having your guests stay on your property but not within your own home offers you both the privacy you need during long visits.

This is popular for people who house traveling nurses or caretakers that need to be near the home but still desire their own independence.


Non-Living Space for What You Love

ADUs don’t need to be used as a place to live in. They can also be used as a:

  • Art studio
  • Home office
  • Man cave
  • Personal gym
  • Personal movie theater
  • Pool house
  • She shed
  • Yoga studio

There are a lot of ways to use an ADU to meet your wants and needs that don’t involve having someone live in it.


Boost Your Property Value

If you plan to sell your property in the future, building an additional dwelling unit now can boost your property value by up to 20%. Many people will rent out their ADU to pay off the cost of building it, and then list their property on the market at a much higher price than they would have if they hadn’t built the ADU.


ADU Development Is on The Rise

Across the state of California, the number of issued ADU permits increased from almost 9,000 in 2018 to 12,392 in 2020. In Los Angeles specifically, 4,079 ADU permits were issued in 2018, and 6,747 were issued in 2019. This number has continued to rise with the new laws that make it easier to undergo the ADU permitting process.

Why not be a part of the growing trend to help combat the housing crisis and make extra income while you are at it?


Start Building an ADU In La Today

Not sure where to start your ADU? Check out this free ADU development guidebook! It can help walk you through how to construct an ADU in Los Angeles. If that isn’t enough, consider working with an ADU professional.

Here at Levi Design Build, we have been developing ADUs in the Los Angeles area since 1999. Start with a free consultation and see how our dedicated team of designers, permit expediters, and builders can help you design, plan, manage, and build your dream ADU. We have even partnered with Land Home Financial Services, Inc. to make building your ADU as affordable as possible.

Contact us today to see how our dedication to creating a functional, customized living space unique to your personal style can help you develop the perfect ADU for your needs.