An ADU (Accessory Dwelling Unit) or JADU (Junior Accessory Dwelling Unit) used to be more uncommon than common. In this article my ADU can mean both/either ADU and JADU. In recent years with home prices and rental prices rising and more people preferring their own space to having roommates; along with HGTV Tiny Home Nation and other media; it’s become more and more desirable to live in, add one, or rent an ADU or JADU. In fact, not that long ago, it would be more typical for folks to ask for a property with an ADU for elderly parents or grandparents to live closeby. Lately, we’ve seen 30 and 40 somethings buying their first home wanting an ADU for a younger sibling, best friend, or relative to live in. They see the benefits: One, the ADU dweller can help qualify (depending on your lender) for the loan, and/or their rent helps with mortgage payments. Two, it reduces the uncertainty, because as renters, other people's circumstances dictate whether they have to move. And Third, it resolves the unknown rent increases in the rental market. It seems what was a thought for the seniors and senior-seniors has become more of a long term life decision for folks of all ages. In years past, the statistical California average time you would expect to see a home resold was about every 7 years; today, where folks are looking for more versatility in a home, it becomes a more long term purchase to adapt to their growing family, including multi-generational situations.
A study by Terner Center for Housing Innovation UC Berkeley found properties in the Bay Area with permitted ADU’s sold for an average of 25-35% more than those without an ADU. NAR (National Association of Realtors) survey found 60% of buyers would pay more for a home with an ADU…interestingly the premium they were willing to pay was 20% of the ADU construction cost. Studies show garage conversions have the best value to cost ratio because there is an existing structure. Especially in high demand neighborhoods where rental income is potentially more lucrative. Factors that determine value of the ADU would be whether permitted or unpermitted; quality of construction; separated utilities; rental income history; size and layout; architectural compatibility with the main home and neighborhood. Size and layout for example is optimal for a 1 bed 1 bath of 500-700 sq feet, where the cost vs return is optimal. Large is fine if the area and rents can support it.
As with anything, check with your City, most in this county have FREE ADU plans already approved for those who want to look into an ADU. The city can tell you what is possible on your lot. It is something to consider. My guess is that in years to come there will be more sales with ADU or JADU as a factor than homes without them. Those who work from home, home school, have live-in child care or a nanny, have parents or friends or relatives living with them, an ADU or JADU giving them private space can be a huge benefit and cost savings.
