Construction rates of accessory dwelling units, or ADU’s, have increased in California as more and more residents pursue the opportunity to increase their lot’s livable area. This new space can be enjoyed as a part of your home, or it can be used as a rental property. Many people pursuing this popular opportunity are curious about what steps they must take. To make life simple, we have outlined how to build an ADU in six simple steps!

Step 1 – Consult with A Professional

The first step to any large home project is to consult with professionals in the industry. For those looking at adding an ADU to their home, consider reaching out to a professional who specializes in ADU additions. The benefit of working specifically with the specialist is that they can guide you through every step of the process. Unlike many other companies, Tandem ADU manages ADU construction from start to finish. Instead of individually hiring architects, designers, contractors, engineers, and permitting specialists, let us simplify the process for you. Not only do we help our clients with designing their dream ADU, but we also manage the permitting process with the city and the entire construction process. In essence, we streamline the process!

Step 2 – Design

Now that you have your team on board, it is time to design your ADU. The size of your ADU will vary depending on the layout of your property and what space you have available. However, your hired professional can help you determine this. As the homeowner, you want to focus on the type of ADU you want on your lot and what features you would like to include.

Ask yourself how you intend to use the space. Is it for family and friends, or is it intended to be for rent? These types of questions will help you determine the layout and design that best suits your needs. The most common types of ADU’s include converted garages, detached free-standing units, home additions, basement conversions, attic conversions, and second story additions.

Once you have the location identified, you can start working with the contractor to outline the interior. Remember, ADU’s must include a kitchen/kitchenette, bathroom, and sleeping area!

Step 3 – Financing

The cost to build an ADU on your property will vary depending on the construction required and the fees charged by your local jurisdiction. For example, a conversion will cost significantly less than a new addition. It is best to get a quote from your contractor before pursuing your financing; this will provide insight on which option to consider. Once you have the price, consider the following ways to finance the project:

• Pay cash
• Obtain a personal line of credit
• Cash-out refinance your home
• Pull out a home equity line of credit
• Get a Construction Loan

Remember that when it comes to financing, the fees may seem high during construction. However, in the end, an ADU pays for itself: Not only does it provide a passive source for an additional revenue stream, but it also increases your home’s value.

Step 4 – Zoning and Permitting

Thanks to recent legislation passed in California, obtaining a permit for an ADU has been simplified and expedited to ensure more opportunities for California residents. According to California for Homeownership, here is how legislation transitioned ADU zoning and permitting:

• Cities must approve ADU applications within 60 days, without a hearing or discretionary review.
• For ADUs permitted by 2025, cities cannot require the owner to live at the property.
• Cities cannot charge any impact fees for ADUs under 750 square feet; fees for larger ADUs are limited.
• Homeowners associations must allow the construction of ADUs.
• ADUs can be developed simultaneously as a primary unit, under most of the same rules.
• A city must delay code enforcement against an existing unlawful ADU to allow it to be legalized.
• For areas where development is county-controlled, all of these same rules apply to counties.

Step 5 – Construction

Now that all of the I’s are dotted and T’s are crossed, it is time for construction. Again, the timeframe for construction will range depending on the location and type of ADU. Prefab ADU units can be installed relatively quickly, while ground-up free-standing units may take longer. However, your contractor should be able to provide you a timeline of what to expect.

Step 6 – Enjoy!

Now that all of the work is complete, it is time to enjoy your ADU! Feel free to host your friends and family, utilizing the space as a guest house, or rent the unit out for additional income.