Accessory Dwelling Units (ADUs) are attached or detached residential dwelling units (houses) that provide independent living facilities for one or more occupants on a lot that already has an existing (or proposed) primary residence. They are arguably the single-greatest resource available to California homeowners for vastly increasing their property values while simultaneously providing additional flexibility for themselves and their loved ones.

The potential of ADUs to generate income and increase property value has not been lost on the market. In 2022, ADUs accounted for over 20% of all building permits in the State of California and 30% of all building permits in the City of Los Angeles!

The first step to designing an Accessory Dwelling Unit for your specific lot, budget, and program is to understand the differences between each of the four types of ADUs and the various rules each municipality has put in place to regulate their size and location.

Detached ADUs are new, freestanding structures that are ‘accessory’ to the primary home. In the City of Los Angeles, the exterior walls of these structures must be located at least ten-feet clear from the exterior face of the existing single-family dwelling (SFD) but they qualify for reduced rear and side yard setbacks of four-feet from the property lines. Other municipalities offer narrower setbacks from the primary dwelling. Detached ADUs may be as large as 1,200 SF.

Attached ADUs share a common wall with the existing SFD and are limited to the lesser of 1,200 SF or 50% of the floor area of the primary home.

Conversion ADUs are retrofitted from existing accessory structures on the property, most-commonly under-utilized garages. The State of California has recently determined that Conversion ADUs may occupy the full interior area of any lawfully-existing accessory structure, regardless of its floor area.

Junior ADUs (JADUs) are partitioned-off portions of an existing house that have their own separate entrance. JADUs have less-restrictive requirements (for example they do not need their own dedicated kitchens or bathrooms) and are, therefore, the least-costly solution. However they offer no additional living space and significantly less privacy.

Through our sister company, Sidekick Architects, we have completed a number of garage conversion ADUs and they can be the right choice for some homeowners, but in our experience Conversion ADUs rarely end up saving as much as homeowners hope.

The upgrades necessary to make a garage comply with current building and energy codes for residential spaces are extensive and invasive. These include underpinning foundations, integrating a vapor barrier between the concrete slab and the proposed finished flooring, and, depending on the ambition of the project, sometimes extensive structural work to reinforce walls around enlarged windows and doors. These existing structures often end up being ‘poked-and-prodded’ to such an extent that it would have been more economical to just start from scratch. You never know what you’ll find when you start tinkering with an old structure. Sometimes you get lucky, but more often than not there are unpleasant surprises.

We highly recommend you factor in the return on investment you might receive for rental income relative to the size/quality of your new ADU. It is not uncommon for our clients to report that their rental income fully offsets the costs of ADU construction in well under ten years.

Sidekick Dwellings will handle all of the design and permitting for your ADU project and we will coordinate the work of engineers/consultants, but we are not licensed General Contractors. Whereas many of our competitors offer ‘design-build’ projects with architecture and construction handled by one entity, we follow a more traditional project delivery method called ‘design-bid-build’. This allows us to competitively bid your project to a number of General Contractors, so that you will have confidence that you received the best value and hire a contractor that is a good fit for your specific project.

We have a network of General Contractors that we have successfully worked with in the past, but we love meeting new GCs so we always encourage our clients to ask their friends and family members for recommendations of other contractors that we can bring to the table. On some occasions we have even had clients serve as their own GC. That process can be highly rewarding and save a lot of cost, but Southern California is a complicated place to build, so it is not for the faint of heart!

As you can imagine, there are a wide range of variables that impact the total cost of construction for an ADU project (or any project for that matter). Some of these include overall size, complexity of massing, materials, appliances and fixture selections, window and door specifications, vaulted vs. flat ceilings, etc.

Although the total cost of construction is impossible to know until we have completed the design process and received qualified bids from GCs, we typically advise clients to budget at least $400/SF for quality new construction in Southern California. That price excludes ‘soft costs’ like permit fees, design and engineering fees, soils reports, etc., but there are financial grants available to assist homeowners within certain income brackets with these pre-development costs, as discussed below.

Absolutely. Sidekick Dwellings (or our sister company Sidekick Architects) is standing by to guide you through every decision along the way, and there are always opportunities to reduce costs. If your goal is to simply convert an existing garage into a clean and minimal ADU and you have limited design ambition for the project (i.e. no vaulted ceilings and minimal door/window openings) you can probably complete the project for under $100,000.

In our experience, however, it does not take much before your existing garage (which was built well before current codes) is effectively turned into ‘swiss cheese’ through all of the poking and prodding that a comprehensive construction project requires. If your project involves anything beyond a utilitarian conversion, we highly recommend you consider new construction, which will allow for your vision to be fully realized.

For fully-custom projects, our sister company, Sidekick Architects, charges design fees in the range of 15% of the final cost of construction, however, for our semi-custom ADU models we are able to cap our design fees at 10% of an assumed $400/SF cost of construction (i.e. design fees of $40/SF).

Let’s consider an example: Sidekick’s 1,000 SF Model L-1 ADU (2 bedroom, 1 bath) assumes a cost of construction of about $400,000. If a client opts to adapt this base model, Sidekick Dwellings’ total design fees would be based on 10% of that assumed construction cost, or $40,000. For more on how that fee is distributed among the five phases of architectural design, see our ‘Construction Costs and Design Fees’ tab at the menu above.

Yes! The California Housing Financing Agency (CalHFA) has a very generous $40,000 ADU Grant available for California homeowners that meet certain income threshold requirements (for example up to $180,000/year in Los Angeles). This grant will cover up to $40,000 of pre-development costs for building an ADU and you’ll never have to pay back a single penny!

Pre-development expenses include ‘soft costs’ such as property surveys, architectural design and engineering fees, soil testing, and permit fees. In many cases Sidekick Dwellings can help you obtain the building permit for a new ADU in your backyard with effectively no out-of-pocket costs whatsoever.

Probably, but this depends on your financial institution. New construction financing is typically handled through a construction loan. These loans are temporary and although they tend to have higher interest rates than traditional mortgages, that interest only kicks in incrementally, as the funds are drawn. Once your GC has completed your ADU, a building inspector from your local jurisdiction will issue a Certificate of Occupancy, at which point your construction loan can be converted to a traditional mortgage, but you will need to check with your bank on the specifics. Be sure to check with your local credit unions as well, as many of them offer ADU-specific second-position loans that keep your first mortgage interest rates in place.

If the primary goal for your ADU is to generate rental income, the sooner you get started, the sooner you will see a return on your investment. Waiting a year or two for interest rates to come down is equivalent to foregoing 12-24 months of potential rental income. You’ll need to check your local market, but for many of our clients that could mean missing out on $4,000 to $5,000/month of rental income, or $60,000/year. It’s safe to assume that that income will more than offset your increased interest premium.

While it is true that interest rates remain at a 15-year high, many economists estimate that interest rates have more-or-less peaked and will likely to come down in the next 12-18 months. If you begin designing your ADU today, it could take 6-12 months to design, permit, and construct your ADU, depending on the complexity and the speed at which you commit to fixtures and finishes. Given this timeline, the conversion of your construction loan to a traditional mortgage could be well-timed to coincide with lower interest rates.

Our standard ADU models are site-built by a licensed General Contractor, not pre-fabricated in a factory. The unique siting of Accessory Dwelling Units (positioned in the rear yards behind existing single family homes) make delivery of pre-fabricated units exceedingly challenging. Our ADUs are designed with ease of construction in mind, but the construction process will look much like traditional home construction, with a foundation being poured, followed by wood framing, roofing, and then exterior/interior finishing.

In addition to being more practical, we find that site-built ADUs provide our clients with opportunities to customize features and materials of their new ADU to feel more like a harmonious extension of their primary residence, rather than a ‘spaceship’ that has landed in their backyard.

Did you ever stop to ask yourself why, with all of the technological improvements of the past century, we still build houses in the same way that we did in the 1950s and 1960s? At Sidekick Dwellings we think about this all the time. As it turns out, we don’t have to!

Modest upgrades to a building’s thermal envelope (i.e. wall assembly) can result in substantial savings over the life of your ADU, in the form of reduced energy bills. With the addition of photovoltaic panels on your ADUs roof (a requirement in many jurisdictions now) we can design your ADU so that neither you nor your tenants will pay a penny in electrical bills ever again. That’s a win-win for the environment, and for your personal finances!

Probably not, but we can help you check the specifics within your jurisdiction. Most local municipalities have enacted ordinances that disallow ADUs to be used for short term rentals. Why? Because recent ADU legislation was designed to help address the ongoing housing crisis through an increase in long term rental availability, and short term rentals do not contribute towards that goal.

However, many of our clients that initially hoped to list their ADU on Airbnb have reported that long term rental turned out to be much easier to manage and just as lucrative, in part because rental rates remain high.

There are also some Rent Stabilization Ordinance (RSO) implications that you should review with your own financial advisor prior to starting your project, but whether you will be using both your primary home and the ADU for yourself and your guests or you will be renting one of the units out, these are highly-manageable processes.