What are Accessory Dwelling Units (ADU's)? and Why you should know about them

Accessory Dwelling Units also commonly known as Granny Flats or In-Law Quarters were once popular in the 20th century. They are now gaining their popularity here in Sacramento after Governor Newsome signed a few bills acknowledging the shortage of homes on the market. Those bills went into effect on January 1st, 2020. A homeowner will now be able to occupy the main residence and generate income from the living space (Accessory Dwelling Unit) that's located on the same lot if he or she chooses.

In my opinion, this empowers homeowners who now have the option to add or acquire an additional revenue source. There will always be people who will need a place to live (Especially an affordable place to live). The great thing about ADU's is that they can be comparable in size to, apartments and condominiums. ADU's can be much cheaper to construct than building a home. Since you'll have purchased the primary residence you won't have to worry about buying additional land, you're already in a position to bring in revenue. Accessory Dwelling Units empowers the individual landowner to do their part in fighting the scarcity in the housing crisis we're currently experiencing here in Northern California. Accessory Dwelling Units are now much more accessible to every homeowner and future homeowner.

ADU's once took 120 days to be approved, now with fewer restrictions to build it only takes about 60 days for a homeowner to have their plans approved (No matter how your lot is situated or the size of it). Many fees that were once attached to building an Accessory Dwelling Unit such as an 'Impact fee' have now been adjusted to correlate with the square footage of the primary residence. Previously, one had to occupy either the primary residence or the ADU structure itself to justify the rental aspect. Now, that isn't the case (Hello investors!). The new law allows investors to build ADU's and legally receive rental income from the structure. Yes, it has a Multi-Family feel to it.

Those of you who own a home or are planning to acquire a home in the future may want to take advantage of this opportunity. This income-generating opportunity will continue to gain its popularity here in California. Currently, with low-interest rates and the option to purchase an existing ADU structure or the vision to construct an Accessory Dwelling Unit one could be looking to cut the overhead of homeownership by utilizing his or her freedoms as a Landlord.