Start here by checking your property ADU eligibility
Most cities and planning authorities, as in Palo Alto, define accessory dwelling units (ADUs) as small housing units situated on the same lot as a principal residence which can either be attached to or detached from the primary home structure. Around California, ADUs are under other, more popular pseudonyms, such as granny flats or mother-in-law suites. Some homeowners will rent their ADUs out to generate additional income. Though an ADU can still be a worthwhile investment, even if you don’t plan on renting it out, building a dwelling unit will increase the value of your property and provide more space and privacy for friends and family.
Steps for getting started on your ADU Project:
While “accessory:” might make an ADU sound minor, in practice, building such a unit is like building a tiny house and is, by no means, an easy undertaking. To help you wrap your mind around what to expect and brainstorm how to get things going, here are a few quick pointers:
Across Palo Alto and its population of 65364 residents, more and more people are finding it hard to find suitable homes that fit their budgets. As a result, the local government has taken measures to increase the availability of lower-priced homes – mainly by instituting legislation to regulate the housing market. Recently, there has been growing attraction to Accessory Dwelling Units, or ADUs. California planning authorities modified ADU building regulations, allowing homeowners to construct a separate unit on their property with living spaces for family members or rental tenants. These amendments to the laws enable more people to build ADUs within their homes and open up opportunities for more people to live affordably. This legislation provides homeowners with incredible opportunities and the potential to grow their monthly income through rent.
According to California state law, any single-family home is allowed to build an Accessory Dwelling Unit. If the owner is living in the house, they may also construct a junior unit (independent living structure, no more than 500 square feet, within the walls of a single-family residence).
In some areas, a local health officer may require to approve private sewage disposal in your dwelling unit.
According to AB 671, Housing elements must include a plan which incentivizes and promotes the construction of affordable-to-rent dwelling units. The California Department of Housing and Community Development must provide a list of state grants and financial incentives to plan, construct and operate affordable tiny homes. (Gov. Code, § 65583; Health & Safety Code, § 50504.5).
This same ordinance seeks to ease requirements such as parking, size, and fees so that they’re “not so arbitrary, excessive or burdensome to unreasonably restrict the ability of homeowners to create accessory dwelling units” in areas where tiny home construction is allowed.
A Detached ADU, sometimes called a backyard ADU, is entirely separate from the main home, sharing no walls. These typically are allowed to be between 500-1,200 square feet, depending on the number of rooms. The Attached ADU is very similar, except that it shares a wall with the main living structure. Junior Accessory Dwelling Units (JADUs) must be built from an existing home part and cannot exceed 500 sqft. The minimum legal size for these is 150 sqft.
Scroll down for more information about the different types of ADUs and see which is the best fit for your property!
Certain ADUs are exempt from parking requirements. According to Government Code section 65852.2, subdivisions (d)(1-5) and (j)(10), “local agency shall not impose ADU parking standards” on the following types of ADUs:
In accordance with Government Code section 65852.150, the California Legislature declared that California is facing a severe housing crisis; it further stated that ADUs are a necessary innovation in meeting low-cost housing requirements for family members, students, the elderly, in-home health care providers, people with disabilities, and others. Therefore, Additional Dwelling Units are essential to the CA housing supply.
If an ADU is less than 750 square feet, it is exempt from impact fees from local agencies, special districts, and water corporations. If it meets or exceeds this size limit, impact fees “shall be charged proportionately with the square footage of the ADU to the square footage of the primary dwelling unit.” In such a case, the impact fee should always be at most that of the primary dwelling.
* School districts may (if they so choose) levy impact fees for ADUs larger than 500 square feet as per Section 17620 of the Education Code. ADUs smaller than 500 square feet are exempt from school impact fees.
Have you decided to pursue an Additional Dwelling Unit but aren’t sure how to finance it? There are many options, from well-known home equity or renovation loans to lesser-known alternatives such as cash-out refinancing your mortgage, a PACE loan, and government ADU programs. Keep in mind that as a homeowner, you may be eligible for loans against the value of your home, although it may create certain significant risks. We recommend speaking with one of our specialists regarding the best way to finance your ADU in Palo Alto, CA.
A small apartment unit built as an add-on to your home, sharing at least one wall with the primary building. An attached unit usually connects to the primary structure’s water and power lines, but it provides for all independent living needs. The best thing about a detached ADU is its separate entrance. As such, if you live on a property in Palo Alto with limited available space, an attached ADU could be a great solution.
A detached ADU is an independent structure that stands and functions as its own house, albeit smaller than the primary home. It includes all the necessary amenities for its inhabitants. Most ADU laws, as is the case in Palo Alto California, stipulate that if you wish to build a detached ADU, you need to set aside an area of your property and create good boundaries to provide the unit’s residents with privacy. Large detached ADUs can often earn high rental rates because they offer renters more flexibility.
Garage conversions are trendy ideas for maximizing your property's earning potential. As the name suggests, a garage conversion is simply a remake of what already exists - namely, an attached or detached garage. Converting your garage area can give you much-needed living space or gain you regular extra income!
An Above Garage-Attached Dwelling Unit (ADU) provides an affordable option for homeowners looking to rent out their space while still being able to use their garage. By installing an ADU on top of your current garage, you'll have plenty of extra room for tenants without giving up the much-needed parking and storage space.
A converted space inside your house, letting you create your own tiny home within a home. Interior ADUs are, as with all ADUs, meant to be independent living quarters. Therefore, these spaces require plumbing and ventilation for the unit's separate kitchen and bath, and they will most likely share utility services and mechanical appliances with the central unit. Currently, in Palo Alto, CA, these units are the most common form of ADU homes as they're easy to maintain and affordable. So don't hesitate to think about building one!
A Junior Accessory Dwelling Unit (JADU) is the Single Family ADU’s (the standard ADU) little sibling but has different restrictions to help keep costs down while ensuring that they provide adequate living facilities. For example, a JADU can only be built as part of a single-family home, existing or proposed single-family home, or within an accessory structure, such as a detached garage or carport. A JADU shares utilities and mechanical appliances with the main house.