ADU Development Activity Is Increasing in Los Angeles

In 2018, the State of California loosened the regulations around accessory dwelling unit—or ADU—development for single-family homeowners as a way to increase density and bring more housing supply to the market. In the last two years, ADU development has increased dramatically as homeowners better understand how they can take advantage of the opportunity.

“This is getting a lot of press because of the legislation,” Paul Dashevky, a partner at GreatBuildz, tells GlobeSt.com. “The state legislation has eased up restrictions to create more density, and that has opened up a lot of possibilities. For all intents and purposes, an ADU is a second units. However, it isn’t categorized as a second unit, but that is essentially what you will have. It is a property with two homes on it. There are a lot of creative ways for people to use them.”

Homeowners are doing everything from adding income-producing units—which was the goal of the legislation—to fitness facilities, home offices and in-law suites. These units are also ideal senior housing units for the homeowner’s family. As a result of the uses, the permit requests are increasing rapidly. “In 2016, there were only 300 permitted ADUs,” says Dashevky. “In 2017, there were 3,000 permitted, and now there are more than 13,000 permitted. The numbers are definitely skyrocketing.”

ADUs are also a great investment opportunity for investors, who are now able to significantly add value to an asset. “We are seeing flippers buildings ADUs to increase the value,” says Dashevky. “You don’t need a large lot because there is no lot-size minimum, and as a result, virtually anyone can do it.”

For homeowners interested in adding an ADU, research and a reputable contractor are key. “People have to do a little bit of research to understand costs and the restrictions,” says Dashevky. “Another option is to hire a consultant to talk you through the initial stages and get advice. Secondly, you have to hire the right people and a reputable contractor. This is not a small construction project, so you really need to find a good contractor. Those are the two most important things.”

GreatBuildz has worked with several clients interested in adding an ADU, and can help to marry the right contractor with the right project. “We match clients with a reputable, pre-screened general contractor at a reasonable price,” says Dashevky. “We also stay involved through the entire project. Contractors are busy, and that is a big complaint. If you are just searching on Yelp, it can be a needle in a haystack. That is why we formed this company.”