2020 January 15, 2020

What’s and ADU? Can I Have One?

With the limited availability of affordable housing, there has been lots of discussion about ADUs.  An AUD is an Auxiliary Dwelling Unit. You can think of: Pool House, Granny Unit, In-Law Unit, etc. Typically it is a small house/cottage that a homeowner might build in their back yard.  ADUs can be either ATTACHED to the main house or DETACHED (stand-alone). They are often used for an extended family member (child or parent), rental unit, caregiver, etc. They can be rented out or simply used for additional space:  think Man Cave or She Shed.

They are a bit controversial as they are seen as one option to help provide affordable housing for eg: teachers, service employees, seniors, public employees, etc. who have been priced out of the local housing market.  On the other hand, some see them as increasing density, adding to traffic and parking woes, etc. Whichever side of the argument you are on, you will see more and more of them as the state and local governments are working hard to help alleviate the severe shortage of housing.


Q:  How do I know if I can build an ADU on my property?

A. The best way is to go to your City planning office and ask.  You should do some research on their website ahead of time so you know what kind of questions to ask.


Q:  How big can it be?

A:  Each municipality has different restrictions but as a rough number, 800 square feet common. Sometimes you can also have a patio area or gazebo.


Q:  Can I put it anywhere?

A:  No. City codes will tell you where you can and can’t put it.  EG: how close to the house, how tall and lot size restrictions may apply.


Q:  How much does it cost?

A:  It all depends on what you build and how easy it is to access the back of your house.  It could be as low as a couple hundred thousand to much more.


Q:  Do I need to get a permit from the City?

A:  Yes


Q:  Can I rent it out?

A:  Usually the answer is yes for whatever amount you want but you should always check with the local zoning codes to see what is allowed or if there are restrictions.


Q:  What about taxes?

A:  Usually income generated from a rental is taxable but you may also be able to deduct expenses involved.  Definitely talk with your Tax Professional.


Q:  What about Rent Control?

A:  There are a number of new laws that have just gone into effect that are much more protective of tenant rights so before you sign a lease, make sure you discuss the requirements with a California Landlord Tenant Attorney.  (Feel free to email me if you need any referrals.)


Q:  Could I (the homeowner) live in the ADU?

A:  Yes, if you were looking to downsize.  And then you might be able to rent out the main house.


Owen Halliday is a REALTOR who manages the Sereno Group Real Estate office in downtown Los Altos.  If you have a subject you’d like addressed in a future column, Owen can be reached at owen@serenogroup.com or 650-492-0062.