3 Reasons to Build an ADU Today
Reason 1: Housing Loved Ones
Whether it’s space for your parents who are looking for space to age in place, a private space for your child coming back from college, or an opportunity to keep multiple generations together on one property, an ADU is often the answer.
ADUs have become increasingly popular for households that are aiming to split the rising costs of mortgages and utilities, while finding a solution against the ever-increasing housing market prices and rental rates.
For many homeowners, including the hundreds we’ve spoken to, building an ADU starts with a personal need to bring loved ones closer together and recreate multi-generational living.
Reason 2: Increasing Property Value
It’s true, adding a newly permitted building to any property will increase the property tax due to the increase square footage, but property tax increases represent only by a fraction of increased property value as a result of adding an ADU to your property.
With some properties increasing in over 30% in value, ADUs are the perfect vehicle for increasing property value and making use of “underutilized” or even unutilized backyard space.
Reason 3: Generating Rental Income
The second-most immediate impact of adding an ADU to your property would be generating a passive rental income from either short-term or long-term leases. While some municipalities allow ADUs to be used as short-term rentals such as corporate rentals or an AirBnb listing, sometimes ADUs are limited to long-term leases to incentivize homeowners to find long-term tenants that become a part of the community rather than becoming a small business in more private neighborhoods.
In addition, SB13 and AB881 make it possible for property owners to create a two investments on a single family property with two separate rentable dwellings and no owner-occupy requirements.
Bonus: Housing Stock
California has a housing deficit of more than 3,000,000 units.
The housing shortage is nothing new to Californians. Thanks in part to the massive boom in jobs due to technology and other growing sectors, California’s wealth and size have grown significantly over the last decade. As a result, California has undergone massive expansion, which has left local governments scrambling to finds ways to increase the housing stock both, first from a commercial developer perspective, and now more strategically with infill housing.
SB-1069 and SB-13, senate bills signed into law over the last few years, are aimed at providing incentives and reducing restrictions for homeowners that are interested in developing additional space on their property.