Are you a property owner looking to increase your property’s value? Does the prospect of generating rental income from your own backyard intrigue you? Then an ADU just might be the perfect solution!
Accessory dwelling units (ADUs), also known as granny flats, in-law units, guest houses and cottages, are the single fastest way to increase your property value – and give you the chance to turn new construction into a money maker.
As we roll full steam into 2025, new California state laws have made it easier than ever to add an ADU to your property.
Today, Adapt Dwellings will get you up to speed on all the important new changes in the world of ADUs that anyone considering building one in 2025 should know.
But first…
Why Now is the Right Time to Build an ADU
For decades, the state of California has suffered through a severe housing shortage, with far more residents looking for homes than current housing supplies can keep up with.
The shortage of available units inevitably drives rents up, making the housing crunch hit low income renters hardest.
But now, the state of California has taken steps to ease this burden by passing new laws intended to spur the construction of accessory dwelling units.
These units can be built in unique ways that take advantage of existing space on home owner properties. ADUs can be built as:
- Attached ADUs – Built as an addition directly adjoining the property, but retaining a separate entrance.
- Detached ADUs – Independent construction on the property. These can be built to contain multiple units.
- Conversions – Built out of existing space, such as a garage, basement, or attic.
- Junior ADUs – Small footprint, independent living units, created from an existing room within the primary residence.
These highly customizable and independent living units offer a viable solution to increasing the state’s housing supply, while still maintaining the privacy of the original residence.
Not only that, but home owners that choose to build ADUs on their properties stand to substantially increase their property values. Research shows that adding an ADU to your property can increase its value upwards of 30% or more.
Add to that the potential to generate rental income, and adding an ADU to your property can provide a significant return on your investment.
What’s New for ADUs in 2025
Now that we have an idea of the potential impact an ADU can have on your property, we can take a look at the new changes that have been enacted for 2025 to make the ADU process smoother.
These changes all come at the state level, meaning that they apply to ADU construction around the state as a whole. Local jurisdictions may allow for changes beyond these, but cannot restrict less than what the state has determined to be the acceptable minimum.
Change in the Number of ADUs Allowed
We start off 2025 with a big addition – and we mean that quite literally! State Bill 1211 has increased the number of detached ADUs allowed to be built on a multi-family property.
Current laws only allowed 2 detached ADUs to be built on a multi-family property. But with SB1211 taking effect as of January 1, 2025, it is now possible to build as many as EIGHT detached ADUs on a lot with an existing multi-family dwelling.
This is an enormous change, one that will benefit property owners with a surplus of land and yard space that can now be used to create new dwellings.
The actual number of new detached ADUs allowed to be built will depend on the existing number of units on the property. In order to preserve the neighborhood character while facilitating new construction, the number of new ADUs cannot exceed the number of existing units on the lot.
SB1211 also carves out space for up to 2 detached ADUs on lots where there is a proposed multifamily dwelling, further enhancing the housing supply throughout the state.
Replacement Parking No Longer Required
Under previous laws, property owners were required to replace surface level parking spaces that were demolished in order to build an ADU.
This law applied to off-street parking spaces, garages, carports, and other covered parking structures.
With the passage of SB1211, this requirement has been abolished.
Now, local jurisdictions are prohibited from requiring that parking spaces demolished to build an accessory dwelling unit be replaced.
Furthermore, parking requirements may not exceed one parking space per ADU or bedroom, whichever is less.
Parking spaces may be provided as tandem parking or off-street parking in setback areas, making it much easier to maximize the amount of new liveable units constructed on a property.
Coastal Commission Review of ADUs No Longer Required
The California Coastal Commission (CCC) has controlled planning and regulation of development in coastal areas since 1976. Under existing law, a review by the Coastal Commission was required to review new developments, including ADUs.
The new Senate Bill 1077 now requires the California Coastal Commission, in conjunction with the California Department of Housing and Community Development (HCD), to simplify the permitting process for ADUs and Junior ADUs within the coastal zone.
This new bill will make it easier for property owners within coastal zones to get approval for construction of new ADUs.
Changes Involving Unpermitted ADUs
Lastly, California Assembly Bill 2533 was recently passed with the aim of addressing concerns about the large number of unpermitted ADUs throughout California.
These unpermitted units not only create a safety hazard for tenants, but put the property owners at risk of liability in the event of a safety incident.
Now, AB2533 will provide a path to legalization for unpermitted ADUs with several new benefits:
- AB2533 prohibits local agencies from denying permits for unpermitted units constructed prior to January 1st, 2020.
- Local jurisdictions will be required to provide a checklist of conditions that qualify a unit as being substandard. The property owner can obtain a confidential third party code inspection from a licensed contractor.
- A property owner will not be penalized for having an unpermitted unit. Local agencies will be prohibited from requiring an owner to pay impact fees, connection charges, or capacity charges for an unpermitted unit.
- Local agencies are required to inform the public about the provisions prohibiting the denial of a permit for an unpermitted unit.
Conclusion
California has made addressing the longstanding housing shortage in the state a priority, and with these new ADU law changes for 2025, they have taken a big step forward.
By making it easier than ever for property owners to add valuable and money-making ADUs to their property, it’s a win-win situation for everybody.
If you’re considering adding an ADU (or ADUs!) to your property in 2025, you need the help of an experienced ADU consultant.
Adapt Dwellings has helped dozens of property owners throughout California navigate the process of adding accessory dwelling units. Our team of ADU experts can help you get the process started with an ADU feasibility study designed to help you understand the options for your property.
Our inhouse architects can even design a custom ADU plan to fit your budget and needs.
Don’t wait another moment to get help from the Bay Area’s ADU experts, Adapt Dwellings. Contact us today to schedule a call, and let us get the ball rolling on your new ADU.
