5 Things to Know about Bay Area ADUs

It’s no secret that housing in the Bay Area is in high demand. New legislation and creative housing options are addressing a major supply issue.

Bay Area ADUs are one of those creative solutions to the housing crisis. If you’re a Bay Area homeowner, here are five things you want to understand about ADUs.

But First, What is an ADU?

An Accessory Dwelling Unit, or ADU, is a second, smaller dwelling built on the property of an existing single-family home. Many names, like granny flats, mother-in-law units, tiny houses, and guest houses, call them.

If you plan to build an ADU or prepare an existing structure on your property for use as one, you need to understand some things to avoid legal issues down the road.

Why Build an ADU?

Building an ADU might be the right choice if you are looking for a place for your parents to live but are not yet ready to have them in your home. Perhaps they would like their privacy and independence but want to be close for future care. A Bay Area ADU is a great solution in this scenario, offering shelter from the rising housing costs for retirees while keeping them close to you.

Bay Area ADUs are also popular for parents of adult children looking for affordable housing while in college or launching a career. Even as a temporary solution, you can offer housing to your adult child while they need the support and then transition to using the ADU as an income property in the future.

Many experts anticipate ADUs as one of the major solutions to the Bay Area housing crisis. Using your ADU as an income property may present a significant passive income stream while increasing the value of your home, possibly as much as 34%.

1. Just because the structure is permitted doesn’t mean it’s legal for use as an ADU

Bay Area ADUs must meet certain standards to be legally considered ADUs for renting. To be considered an ADU in California, the structure must:

Be a self-contained space with an entrance, bathroom, and kitchen space.
The range is between 250 and 850 square feet if it has one bedroom or up to 1,000 square feet for more than one bedroom.
Be up to 16 feet tall.

Individual cities may have their requirements for ADUs, so contact your city’s planning department before beginning your construction process.

2. An ADU is not the same as a vacation rental

As the popularity of Airbnb and VRBO has grown, more people are considering how they might enter the short-term vacation rental market. While this can be lucrative, remember that a Bay Area ADU may be regulated differently than a vacation rental.

Depending on your county, you may not be allowed to use the ADU for a short-term rental. Check with your city before solidifying your plans.

3. It’s not worth it to risk renting an ADU without the necessary permits

You may think you can rent out an ADU without following all the rules, but keep in mind that if the tenant sues you or your lack of proper permitting and contracts is revealed, you may be required to pay back all the rent received from the tenant.

Ensure to acquire all the necessary permits and a certificate of occupancy before using your Bay Area ADU.

4. ADUs are a useful solution for a variety of puzzles

Adding an ADU to your property can solve a variety of problems. A Bay Area ADU can be useful for:

Housing for parents
Rental income
Housing for adult children
Short-term guest housing
In-home healthcare providers
Childcare, such as an au pair

5. An ADU does not have to be built on-site

If you are concerned about construction timelines, messes, or other potential hassles, remember that your Bay Area ADU can be a prefab structure.

One Bay Area business even guarantees the delivery of its prefab ADUs within six months and the turnaround of paperwork in a matter of days for customers local to its San Jose office.