FAQs
1. Where do we offer homes?
Currently we offer backyard homes in Los Angeles and Orange Counties
2. Status of ADUs laws
ADU legislation has been updated recently in California. The governor signed a number of bills in October 2019 including AB 68 which established statewide standards for the installation of ADUs. This legislation includes setback requirements, size limitations, allowance for an ADU and a JADU (junior ADU) on the same property, etc. However, local jurisdictions can restrict ADUs from certain areas. The new ADU law in the City of Los Angeles went into effect as of January 1, 2020. In addition to traditional "stick built" and manufactured homes, Tiny Homes are also approved as ADUs.
3. Size limitations
AB 68 establishes the size of an ADU to be no more that 1200 SF, not to exceed 50% of the primary home on the property. Junior ADUs (described below) may be up to 500 SF of the primary home.
4. Setbacks
Previously, the standard has been a 5 ft setback from structures and/or property lines, and 10 ft from the primary home. However, the new law signed by the governor has a 4 ft setback from structures and/or property lines, without specifying the setback from the primary home.
5. Power lines
According to the Department of Water and Power, there must be a 10 ft radius clear around each power line. When a drop line (from main line to the house) extends over the backyard, it cannot be within 10 ft clear of the ADU. This has been a major obstacle in Los Angeles of obtaining permits for ADUs.
6. Public transporation and parking
Parking is always a problem in Southern California. If the ADU location is withing 1/2 mile of a public bus stop or one block from car-share location, then an additional parking space is NOT required. If not, then one additional parking space is necessary.
7. Hillside and High-Risk Fire zones
In Los Angeles City and County, ADUs are not allowed in these areas except under certain conditions. (fire sprinklers). Contact your local planning department for other areas.
8. Utility connections
ADUs in both counties must be connected via the primary residence to water, power, and electricity. This is NOT considered a new service.
9. Zero Net Energy program
The California Zero Net Energy (ZNE) program is slated to go into effect January 1, 2020. The requirement states that all new construction homes must generate sufficient energy to offset the energy they utilize. Unless exempted by a local jurisdiction, ADUs are considered new homes. Therefore, it is likely that solar panels will be required on newly built ADUs in 2020. However, an alternative to adding the cost of an entire solar panel unit may be satisfied by the Tesla Energy rental program. We are evaluating this option...more to follow.
10. Types of ADUs
ADUs come in a number of forms: a) attached to the primary home; b) a garage conversion; or c) detached from a primary home. The basic requirements of an ADU is that it provides a living space for sleeping, eating, and sanitation facilities with a private entrance. A junior ADU (JADU) is an existing bedroom in a home with a kitchenette, access to a bathroom (in house or private), and door exits both into the primary home and outside. The new law allows both and ADU and JADU on the same property...essentially a triplex. ADU size is capped at 1200 SF and a JADU at 500 SF.
11. Rental restrictions (Airbnb)
The owner of the ADU will sign a document that is attached to the deed of the property and recorded with the County that states that the unit will not be rented to third parties for less than 30 days at a time.
12. Garage conversions
These are very popular in Southern California. The number of ADU applications in the past 4 years has increased 15 fold, most of which are garage conversions to an ADU. Although this is not our primary business, we will consider a garage conversion in combination with a detached ADU model described more fully on the "Models" page.
13. Time
Once permits are pulled and escrow funded, we begin site preparation. Materials arrive in 30 days or less. Construction takes approximately 4 to 9 months depending on the construction type.
14. Rental unit / net income
An ADU can be a major source of income for the owner. Depending on the neighborhood, rents for a single tenant unit can be anywhere from $1800 to $2200 per month. Assuming an interest only monthly payment HELOC of $550, the owner can net anywhere from $1250 to $1650 per month (excluding insurance / taxes). This grows larger with time.
15. Increase property taxes
A small increase is most likely. When building permits are obtained, the owner assigns a value to the "home improvement". Let's say the stated value of the entire ADU project is $100,000. Your property taxes would increase by $1,250 per year (1.25% x value), or $104 per month.
16. Rent Control
Rent control has been established in several Southern California cities including Los Angeles, Santa Monica, and Culver City. Created over 30 years ago, this legislation applies to multi-family zoned properties (apartments). It does not apply to single family homes that are rented. If a property was built in Los Angeles before October 1, 1978, rent control applies. However, rent control does NOT apply to apartments built after that date. Depending on your location, the "rent control" date may be different.
If an owner of a single family home adds a newly-constructed ADU and rents this unit, rent control should not apply. However, if an owner of a single family home moves into the ADU and rents out the primary home (built before 10/1/78), this may trigger rent control on the primary home. As more ADUs are built, the policy regarding rent control will be clarified.
17. Property Value
An investment in an ADU will increase the value of the property. If a future buyer of the property is looking to finance the home with a mortgage, the additional income of the ADU will reduce the mortgage payments, therefore, making the property more attractive in the market, at a higher value. If an income property investor is looking to buy the single family home and use as a rental, the additional income from the ADU will attract a higher value for the property.