
How ADUs are Changing the Landscape of Housing in CA
Adding Units to California’s Low Inventory
The well-documented California housing crisis prompted lawmakers to implement various policies with the intent of reducing barriers to constructing new units. In the late 2010s and into the 2020s, the state passed several laws that simplified ADU regulations, including reducing parking requirements, streamlining the approval process, and reducing minimum lot sizes. The state even created grants and other financial incentives to help owners fund construction.
These new units can be used to house Californians in multiple living situations. Here is a look at the demographics most likely to benefit from living in ADUs:
- Students,
- Young professionals,
- Downsizers, and
- Multi-generational households looking for separate living spaces.
Promoting Sustainable Living
ADUs also provide environmental benefits. By utilizing existing infrastructure and avoiding the need for large planned community developments (complete with new roadways, electricity lines, and sewer connections), ADUs reduce carbon footprints and promote sustainable living.
Additionally, by concentrating residents in existing neighborhoods, we can build more walkable neighborhoods around a more dense populous, rather than continuing the development of sprawling suburbs. This reduces reliance on private vehicles and encourages public transportation infrastructure. Consider LA’s new Metro expansion as an example. With enough residents living centrally, more people are willing and able to use public transport, prompting investment in new rail lines.
Providing Opportunities for Homeowners and Investors
And, finally, ADUs are changing the landscape of housing in CA by allowing homeowners and investors to quickly add value to their properties.
As home values have skyrocketed, enterprising homeowners have used ADUs as a house-hacking strategy to generate income from their property. This can be used to help offset mortgage expenses and make homeownership more affordable. Or, as is the case with many “free and clear” homeowners, the passive rental income from an ADU can be used to help cover living expenses in retirement.
The Bottom Line
As California continues to tackle its housing crisis, ADUs have emerged as a practical solution to increase the housing supply, create sustainable communities, and provide unique opportunities for homeowners and investors.