An accessory dwelling unit (ADU) is an independent living area located on the same lot as a family home within existing neighborhoods and on existing legal lots.

In the last decade, California’s population growth has outpaced home construction. In fact, California built less than half of the homes needed to keep up with the population growth. This lack of housing is greatly impacting affordability and causing average housing costs, particularly for Bay Area renters, to skyrocket.

  • The median ADU rental price is affordable (less than 30% of household income) to a two-person household making the area median income in the San Francisco Bay Area.
  • The average rent for a studio apartment in San Francisco is now $2,095. If you want a 1-Bedroom apartment, you will have to pay an average of $3,000 per month.

As affordable housing becomes less accessible, people drive longer distances between housing they can afford and their workplace. They may even pack themselves into smaller shared spaces. Both of these scenarios can significantly reduce one’s quality of life.

ADUs are seen as one of the most effective ways to foster infill housing development. This means an increase in the housing supply without altering existing neighborhood character. They are intended to provide a valuable and relatively affordable form of housing for family members, the elderly, students, in-home health care providers, individuals with disabilities, and others.

One of the reasons parents are choosing to build their own ADU is to allow their children a safe harbor yet maintains independence for both. Empty nesters can still reap the benefits of:

  • Having their child on the same property as the main residence.
  • Spending less money than buying their child a single family home.
  • Renting the ADU for additional income.

But before you begin to build your ADU, you’ll need to be well-versed in the local rules & regulations, and how to navigate the application & permitting processes.

Read about the biggest challenges that prospective ADU builder’s face and more in our Biggest ADU Challenges Article.

You can also find specific city resources San Francisco, Oakland, Sacramento, San Mateo, Sunnyvale, and San Jose below.

Bay Area ADU Regulations - First Steps

California recently implemented new laws that govern ADUs statewide, allowing them to be added to single- and multi-family buildings. Infill housing development is one of the largest topics in California residential design because single-family homes were prioritized for many years, leading to urban sprawl in the Bay Area.

Recent laws and regulations have also simplified some of the ADU building process. Bills AB-881 and AB-68 removed certain types of lot restrictions, to help ensure that municipalities can no longer block ADU construction like they used to. Bill SB-13 removed an impact fee for ADUs smaller than 750 square feet, making ADU construction cheaper than it used to be. Bill AB-670 now prevents Homeowners Associations from banning or unreasonably restricting ADUs.

There are still some differences between the state legislation and city ordinances for ADUs. Ensure that your plans conform to state and local standards before proceeding with construction.

What do property designations mean for my plans?

If your property has a historic designation, you may still be allowed to build an ADU, but it must incorporate the architectural style and elements of the primary dwelling.

If your property is in a designated “geohazard” or “landslide” zone, you most likely will need a Geologic Hazard Clearance permit, another step that you will have to confirm with your local office.

Your property will have additional ADU requirements if it has a designated easement. Unsure if this applies to you? Try to obtain a copy of the title report that came with the purchase of your home. Your deed will contain your specific property designation within the body of the document.

In order to learn instantly if you can have an ADU on your property, visit the Online Symbium Build and explore different ADU designs. Place your dream ADU onto a map of your property. Discover your property’s exclusive designation and regulatory requirements.

How could your classification affect your property taxes?

Property taxes in the Bay Area are typically 1% of the property’s assessed market value. The construction of your ADU will trigger a reassessment, but it will be a blended assessment. The ADU will be assessed by itself.

Whatever the determined market value is will generally be assessed a 1% tax and added to your current tax bill (making it a blended rate). Know that over time, your tax rate can increase but is capped at 2%.

Attached ADU

Typically, an attached ADU can be built on any side of the house, but properties with historic designations may only be built in the rear yard. It is likely that front and side setback rules will apply, so be sure to check online or with your local office.

Detached ADU

Requirements for a detached ADU are slightly different. It must be placed in the rear yard or 45 feet from the property line. There must be a minimum separation space of six feet from the main building. If a second story exists, it must be set back four feet from both the rear and side property lines.

In the Bay Area, the ADU may be a conversion or a detached garage or accessory building. It may also be attached to a detached garage or accessory building.

JADU

Junior Accessory Dwelling Units (JADUs) are smaller than the other types, typically sizing up at less than 500 square feet. They must be converted within the existing square footage of a single-family home. For single family homes, they must be located entirely within the main home’s existing footprint. A JADU is not allowed in a duplex or multi family home.

To note, in the Bay Area, you may have a JADU or a detached ADU. Both a JADU and attached ADU are not allowed.

Size and Space Qualifications

Please note, size allowances can vary by city, so please verify with your local government before beginning construction.

Space for parking must be located within the front and side setbacks of the property, with a minimum driveway length of 18 feet. If you converted a garage to an ADU, replacement parking for the main home is no longer required.

Single-Family ADU Size Allowance

If you have a single-family unit, you may be allowed attached or detached ADUs. Property owners have the right to build an ADU of at least 800 sq ft with a 16 ft height limit and four-foot side and rear yard setbacks. Property owners may additionally construct a JADU (Junior Accessory Dwelling Unit) within the existing building envelope or an accessory structure.

  • For single-family lots of up to 9,000 square feet, a detached ADU cannot be larger than 1,000 square feet.
  • For single family lots 9,000 square feet and up, detached ADUs cannot be larger than 1,200 square feet.

How Many ADU’s Are Allowed On My Property?

In multi-family buildings, property owners have the right, under state law, to build one ADU or a number of ADUs equal to 25% of the building’s existing units, whichever is larger. San Francisco allows unlimited ADUs in multi-family buildings with more than five units, provided there is space to accommodate them.

If you have a duplex or multifamily unit, attached ADUs may only be constructed by converting a pre-existing non-livable space in the primary unit. Examples of this type of space include an: attic, garage, basement, storage room, boiler room, or passageway.

For duplexes, detached ADUs and attached ADUs both have an 800 square foot maximum.

Bay Area ADU Room Requirements

Under California building requirements, the internal contents of the ADU are also regulated. This is a crucial detail that can and will affect whether or not your plan is approved. The ADU must be a fully functional living space, with a kitchen, bathroom, and storage.

One option to make sure your ADU adheres is to follow these guidelines for each room and feature that will be built in your ADU. San Jose has a Preapproved ADUs webpage for more information. You can also find RenoFi’s favorite pre-approved ADU plans here.

The bathroom must have a sink, toilet, and shower and/or bath facilities. ADUs are allowed up to two bathrooms.

The kitchen in detached and attached ADUs must have: permanent cooking facilities (i.e. stove and oven), sink, preparation counter, storage, and cabinets.

Obtaining ADU Permits

According to a statewide survey conducted by the UC Berkeley Center for Community Innovation:

“Obtaining local approval to build an ADU was the top challenge associated with adding an ADU. About half (47%) of our survey respondents cited the approval process as one of their top two challenges in constructing an ADU.”
UC Berkeley Center for Community Innovation

City employees will NOT process inaccurate or incomplete plans. Submitting complete, accurate plans is the key to getting your building permit as quickly as possible.

With that being said, it’s important to have an actionable plan in place to avoid setbacks or delays.

Hire Experienced Professionals

After ensuring that your ADU concept meets zoning regulations & qualifications–it is strongly advised to find and hire an experienced professional to prepare your construction plans.

You may want to hire a general contractor, or a contractor alongside a professional draftsperson or designer.

“It is absolutely key to find an excellent general contractor with veteran subcontractors. I don’t think anything is more important.” “Evaluat[ing] and find[ing] a good construction company to build the ADU…[to] lessen the pain and issues during the construction.”
UC Berkeley Center for Community Innovation

There is also a path to legalizing an unauthorized unit. Units that were not approved can have safety hazards, so it is important to be wary of the hoops you may have to jump through when legalizing an ADU. Follow the Legalization Checklist.

ADU Resources for Bay Area Cities

To help navigate this process, we have assembled local resources for cities in the Bay Area:

(Please consult with your municipality to ensure you are taking the correct steps to build your ADU)

San Francisco ADU Resources

Oakland ADU Resources

Sacramento ADU Resources

San Mateo ADU Resources

Sunnyvale ADU Resources

San Jose ADU Resources

  • Similar to the property designations, you can check your property’s zoning requirements by visiting sjpermits.org and entering the property address.
  • ADU Universal Checklist provided by the City of San Jose.
  • In order to prepare construction plans as required for a building permit application, the plans should be prepared following instructions in Bulletin 211-ADU Plan Requirements.
  • San Jose’s ADU Permit Service enables you or your contractor/project designer to schedule an appointment to submit your project plans and documents. During the appointment, you will meet with permit staff and discuss the project plans and documents.

Bay Area ADU Cost and Financing

Despite the lower construction costs of ADUs when compared to “conventional” affordable housing units constructed using Low-Income Housing Tax Credits, ADUs still require a significant financial investment to build. The median unit costs $150,000, which is about $250 per square foot. In order to finance these ADUs, homeowners across all races and economic status rely heavily on cash savings.

Generally speaking, the cost will depend on the size and type of ADU. ADUs in the San Francisco Bay Area region have a median construction cost of $177,500 ($329 per square foot). A new, custom-built detached ADU can cost upwards of $250,000.

Retrofitting an existing attached garage or basement is a more cost-effective solution. Modifying an existing building may cost approximately $80,000 to $150,000, depending on the size and plumbing.

Another way to lower the overall cost of an ADU is to work with a vendor who offers an ADU plan that is pre-approved by the City. Check out RenoFi’s favorite pre-approved ADU floor plans.

Finally, there are many state grants and other financial incentives for ADU buyers in California, including the CalHome Program, Local Early Action Planning (LEAP) grants, and the Local Housing Trust Fund (LHTF) Program. Many of these stem from ADU funding laws that just went into effect January 1, 2021. The Housing Trust Silicon Valley offers free educational workshops and financial assistance to Bay Area homeowners who are seeking to build an ADU.

Build your ADU with a RenoFi Loan

RenoFi can help you finance your ADU. RenoFi Loans are an option many of our clients take as the loan amount is based on the After Renovation Value (ARV) - essentially what the property will be worth after the addition of the ADU.

This means that you can leverage more finance than you could with a traditional Home Equity or HELOC (Home Equity Line of Credit) loan. RenoFi works with Credit Unions allowing us to offer the lowest possible rates on the market: more bang for your buck and less of a shock to the system when it comes to repayment.

Contact us to speak to a RenoFi Advisor - it’s free and they will be able to answer your initial questions and talk you through the process. You can also find out more about RenoFi Loans and how they work compared to traditional Home Equity Loans and HELOCs here.

Justin Goldman Full bio
By Justin Goldman Justin Goldman is the CEO and Co-founder of RenoFi and has 21+ combined years of expertise in entrepreneurship, home equity loans, and loan origination.

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