Everything ADUs Can Do For You
9 uses for accessory dwelling units (ADUs)
Accessory Dwelling Units (ADUs) are incredibly versatile tools so this is a long list of the most popular uses we see for ADUs in California.
This list covers nine specific ways people use their ADUs, based on hundreds of conversations I’ve had with homeowners. The list ranges from the very obvious (example: housing your mother-in-law in the in-law suite) to more surprising uses (example: downsizing to an ADU so you can rent out the main house and travel the world during your retirement).
This article will focus on the uses people have for ADUs in California.
There is a lot of overlap between some of these uses!
Remember that one of the great strengths of ADUs is that they are versatile. An ADU may serve one of these uses early on, and cycle through many of these uses over the decades.
As I was writing up the many, many uses, there were many uses that fell under the header of permit tricks, and financial planning. I’ve abbreviated these sections in this article, and I’ll write up bigger devoted pieces to those at a later date.
There are separate articles with more information about California’s ADU rules. And if you’re new to this, here’s a post about the basic definition of an ADU.
If you think something is missing from the list, email hello@how-to-adu.com and we’ll get it added.
Popular ways to use accessory dwelling units
Non-living space
Home Offices
Pool house
Art studio / Music studio
Yoga/gym space
Guest Rooms / Guest Houses
Building a forever home
Lodging for a nanny or caretaker
Rental unit
Tiny Homes (sometimes)
I’ll go into a lot of detail about each of these uses. And while explaining the different uses, we may touch on many different motivations for those uses.
As we talk about the most popular uses of ADUs that I’ve seen in my work with homeowners, we will touch on a lot of different motivations summarized here:
Common motives for building Accessory dwelling units:
More space for you
Multi-generational living (often aging parents or boomerang kids)
Childcare / Eldercare / Caretaker
Rental income
Permits & Entitlements
Exceeding local restrictions
Negotiating with an HOA
Tax strategy / legacy planning
Real estate strategy
Add valuable square footage to your biggest asset
Rehab a space that isn’t getting used
Adding a bathroom and kitchen
Building our communities
Reducing the housing shortage
Offering affordable housing to a teacher, first responder, senior citizen or other member of your community
Reducing impact on the environment
Personal safety
ADU Home Offices
Photo courtesy of Inspired ADUs. This is the built-in home office in their Clifton floor plan.
During the pandemic, this has been a very popular subject!
As people spend more time at home, I’ve gotten a lot of calls from people who are modifying how they use their house - curious about whether they can build an ADU to serve their home office needs.
The answer is yes, they can use an ADU permit to build a home office. That said, there are advantages and disadvantages.
The main advantage is that ADUs have a streamlined permitting process, exempt from many local restrictions like Floor-Area-Ratios, minimum lot size, and open space requirements. If you don’t like dealing with the planning commission, HOA, or similar bodies, then the ADU permit gives you a less obstructed path!
The main disadvantages are that ADUs have expensive requirements which you might not make the best use of, if the space is a pure home office. The biggest cost requirements are kitchen, bathroom, and Title 24 energy requirements for small residences. As you can imagine, building a kitchen is going to be a bit expensive if all you want is a home office.
Do I recommend building an ADU Home Office?
It depends on the situation.
The best course of action usually depends on my clients’ needs, their lot, and their jurisdiction.
If they say they just want a little office space and don’t need any amenities like kitchen or bathroom, it’s usually a good idea to check if the city will allow them to do a simpler accessory structure permit (instead of a full-fledged Accessory Dwelling Unit).
If there’s an over-the-counter permitting process for accessory structures under a certain size, they might get the best mileage out of building a small 120 sq ft shed, running electricity without gas, water or sewer - with some pretty light administrative permits.
In other cases, the clients might find that there are large barriers to overcome. The more they start hitting time-consuming or expensive roadblocks, then the more appealing the ADU path starts to become.
Example 1:
I had a client with an old detached 1-car garage that was basically a big ugly storage shed behind their house. They wanted to turn it into a home office.
To turn the garage into a simple home office, the city planning department would have required them to replace the parking space in that garage to get the permit to turn it into a home office.
And the city said they were already at the maximum FAR (Floor-Area-Ratio) for the property so they couldn’t convert the unconditioned garage into conditioned space like a home office.
By applying for an ADU conversion instead, state law made both of those local requirements unenforceable.
Parking replacement requirements have largely been removed for ADUs converted out of existing space, and FAR requirements are generally unenforceable for conversion ADUs.
They had to pay to run water and sewer to that home office, and they needed to put in a kitchenette and bathroom - which is a significant cost. But it was worth it so that they could build their unit despite the local restrictions.
For what it’s worth, the ADU Home Office also gives them a lot of flexibility in the future. If they decide to use that as a living space one day, then it’s fully equipped as an independent dwelling unit.
Example 2:
Another client had a huge lot and they wanted to add a home office attached to the house that could one day become a bedroom for a child. Their house was built in the 90s so doing an addition or bump-out to the main house seemed very feasible.
After doing some research, the city had an easy way to apply for an addition to the house. It required a public notice period and a planning commission meeting, but it all seemed pretty friendly in that neighborhood. Most projects got approved promptly.
They decided to go that route and get their project done as an addition instead of as an ADU.
We always knew that as they progressed through the process, if they faced obstacles like neighbor objections, HOA hiccups, or resistance from city planners, they could apply for an ADU permit instead.
So in this example, they started with the simple addition (and things went pretty well!)
Other non-residential ADUs
The above logic applies to all the non-residential uses people frequently ask about: ADU home offices, pool houses, yoga studios, home gyms, and other non-habitable accessory structures.
ADUs are one way to get the permit, and you’ll end up with a very robust and flexible unit. But they’re not usually the most tailored way to create a space for non-residential use.
ADU Guest Rooms or ADU Guest Houses
Another very common use for ADUs is to create a guest room for relatives who visit frequently, often for more than a few days at a time.
ADUs are great for this, especially if you think that the guest room might one day serve as a more permanent home.
A lot of people talk to me about designing an ADU as a guest house for their parents, and they often mention that it would be great to design it in a way that makes it possible for their parents to move in permanently one day down the road.
In this way, ADUs empower families to explore new kinds of living arrangements without broaching very difficult conversations around health, aging and money.
Do I recommend building an ADU Guest House?
As with home offices, ADUs have some advantages and disadvantages over accessory guest rooms or simple room additions.
Like I said above, ADUs have a special streamlined permitting process and special exemptions from local restrictions that can make them very appealing.
The primary drawback is that they have certain requirements that are a bit onerous for a simple guest room.
If a client’s goal is to have a fully independent guest house that their parents might live in one day, it’s very appealing to do it with ADU code.
ADUs create fully functional guest houses that can be totally independent from the primary house. Because they have kitchens, bathroom facilities, and separated utilities, somebody could stay in the ADU while the primary house is vacant or the residents of the primary are on vacation.
The ADU is completely independent. And that’s a big appeal for people who want to maintain independence.
On the other hand, if a client tells me they’ll mostly use the space as a home office or art studio and they want to put in a murphy bed for the occasional guest, or a room for a teenage child, they often don’t need a full kitchen and utilities separation.
ADUs are still a good way to achieve this goal, but it’s worth spending an hour or two researching what other kinds of permits they might obtain from their local planning department.
If they have the option of doing an addition, accessory structure (this is different than an ADU), or some other type of structure that is less onerous than ADU, it might be more appropriate for their specific situation.
Example 1:
A client wanted to build a guest house for their parents who would typically stay for a week or two at a time.
They were hoping that their parents might consider moving in permanently one day. But the parents are still very independent and while they like the idea in theory, they are reluctant to make such a big move today.
This is what ADUs are great at. Flexible, multi-purpose housing that can be a guest room today and a forever home at some point down the road.
Example 2:
Another client had an existing accessory structure with plumbing and electricity. It was a building that got converted years before they bought the property so they weren’t sure what the permit situation was, but they had a home inspection that said it was well-built.
They used that accessory structure as a crashpad for family who sometimes stayed the night after a long dinner.
The cost of bringing that unit up to code was relatively high. If they wanted to rent it out, or have somebody living there more permanently, it would have been worth the investment to make it safe for full-time accommodations.
As it stood though, they paused the project because they essentially already had the use they wanted for that structure.
Building a forever home
ADUs offer a unique way to build a forever home where you can live comfortably as you age, without leaving the neighborhood you call home.
A lot of Californians find ways to retrofit or renovate their existing homes so that they can age comfortably.
But many homes are difficult to completely adapt to comfortable, inspired aging-in-place.
Many of the people I work with, especially in my work at Inspired ADUs, are designing their forever home. And ADUs allow them to live in their dream house without leaving their property.
Do I recommend building an ADU Forever Home?
ADUs are a great way to do this, especially when the primary house doesn’t lend itself well to a renovation.
Homeowners get to start with a blank canvas, and they often create a very flexible, multi-functional pair of homes. And it’s my hope that families will cycle through many of these uses so that the property can stay relevant and supportive at every stage of their lives.
The small ADU might be used as a rental or caregiver unit for the first 10 years, while the senior owners stay in the primary house.
Ten years down the road, they’re ready to downsize into the smaller unit and rent the big house out to their adult children who are raising grandkids and can make better use of all the rooms in the big house.
And one day a long time down the road, maybe one of those grandkids will want a starter home in California and the ADU will be the perfect place for them.
Example 1:
A client has a beautiful home in the Berkeley Hills where they raised kids and lived for multiple decades.
The home is built on three levels like many of the houses in the hills. The only level that is on grade with the driveway is the garage and there are lots of steps to get everywhere else in the house. Most of the bedrooms are empty because the kids have moved out.
This house is not perfect for their lifestyle anymore, but they love the neighborhood and the community.
They explored two options: One path was to convert the garage so that they could park in the driveway and live on the level where they park. Another option was to extend the driveway to a back section of the property where they could build a detached ADU all on one floor.
In the end, they chose the detached ADU and designed something perfect for Aging in Place. They thought they would rent it out for a few years and keep living in the main house for now. But once it was done, they were in love with the ADU and moved in right away. Then they got to rent out the big house and were making money.
Great use of an ADU.
Example 2:
I worked with somebody who had a large 2-story house with the master bedroom on the second floor.
Like many of my clients, they wanted to be able to have the kids and grandkids move in with them, while creating a space that was more appropriate for their lifestyle (read: fewer trips up and down the stairs!)
In this case, the ADU wasn’t the best option for them. A clever design-builder drew a version of their home that put a master suite downstairs for them, and created a bit of a separate living arrangement on the second floor for the kids and grandkids. And that had the heart-warming factor of staying in the house, which meant a lot to the homeowner.
If they had needed more room, or more independence, we could have added a second kitchen and all that jazz. But that wasn’t what this customer needed so an ADU wasn’t as perfect a solution as a clever re-design of the existing space.
Lodging for a caretaker or nanny
This is another very good use for an ADU.
This can range from somebody living on the property full time to a residence for part-time caretakers or travel nurses.
I personally see more examples working with a full time caretaker, often a family member.
This is also a frequently used arrangement for adults with forms of autism who want to have a very high level of independence.
Separately from health-related caretakers, I see a fair number of people who are spending so much money on childcare that building an ADU for a nanny or au pair starts to make sense.
While the ADU laws in California are relatively new, the benefits of multi-generational living arrangements have been known by many of our communities for a very long time. And ADUs are giving us a way to make those arrangements without over-crowding the primary house.
Do I recommend building an ADU for a nanny or caretaker?
When clients have caretaker or childcare needs, this is a very smart path and I recommend it frequently.
Aside from being very practical and pragmatic, I like how elegant this solution is.
One of the largest costs we face at various stages in life is caregiving for children and seniors.
One of the driving forces that makes it so expensive in California is that housing is expensive.
So if you can provide housing for a caretaker, you are getting to the root of the issue and investing your money in a way that benefits the caretaker and the receiver of care.
When I help make a situation like this possible, it really warms my heart in a way that’s hard to explain in a blog post.
Rental income
Accessory Dwelling Units are very well suited to generating long-term rental income.
You can either rent out the ADU or move into the ADU and rent out the primary house. For the next few years, there is no owner-occupancy requirement for ADUs so you can even rent both out.
There are different rules for multi-family dwellings, so some developers are using the ADU rules to add 2 units to their existing multi-family properties or to convert interior spaces into ADUs.
Whether you’re a veteran rental investor or a first-timer, ADUs are good legal ways to create rentable units.
House hacking
This is a good place to note that some people are using these for “house-hacking” where they pay off part or all of their mortgage through the ADU rentals.
For example, you might buy a house with a detached garage and immediately convert the garage into an ADU. You move into the ADU and rent the primary house out to pay the original mortgage.
Alternatively, I’ve heard of big developers like Lennar building their new tract homes with a JADU option built in. So all you have to do is apply for a permit and part of the house is already set up to turn into a JADU and then you bring on a renter to help offset the mortgage. T
But no vacation rentals!
What they’re bad for in California is short-term vacation rentals. The state-wide laws require ADUs to have minimum 30 day rental periods. It’s pretty explicitly designed to not be an airbnb or VRBO.
Some cities are not enforcing this very heavily so I’ve seen a lot of Los Angeles ADUs on Airbnb, for example. But this is explicitly not what ADUs are for, so I would NOT recommend using ADU permitting to create short term vacation rentals.
Tiny Homes on Wheels (sometimes)
Some jurisdictions are formalizing ways for you to put a Tiny Home on Wheels (THOW) on your lot, and they’re sort of shoehorning these rules into their ADU ordinances.
At the time this article is being published, Fresno, Los Angeles, Santa Clara, San Diego, San Luis Obispo, and San Jose have all adopted ordinances that will let you explore Tiny Home options on your property. Check out the following links assembled by the LATCH collective.
San Jose, for example, writes that their municipal code “…will allow Tiny Home on Wheels to be used as Accessory Dwelling Unit (ADU) within Title 20 (Zoning Ordinance or Zoning Code…)“. In other cities like Fresno they say the THOW counts as an ADU and falls under the “Backyard Cottage” category in the code.
Honestly, all this nomenclature still confuses the best of us! So read your local rules carefully, speak to the planning department if you have rules about THOWs, trailers, RVs or other options for alternative living that interest you. If there are no rules yet, check out the rules from the cities that do have them and you might be able to convince a pro-housing member of your local government to encourage a similar ordinance in your town!
If you read the rules above, you’ll see that each city has a slightly different approach to THOWs, sometimes called Movable Tiny Homes. Many times there will be distinctions between motorized homes and homes without a motor (trailer, or towed homes).
Some other areas also have special rules about using trailers as accommodation that do not involve ADU regulation - so be sure to check other sections of the code in your jurisdiction. Examples include special rules for caregivers living in trailers, or other exceptional reasons like long-term housing after the loss of a home during a wildfire.
Your mileage will vary (hah) on ADUs on wheels, but there are a growing number of jurisdictions where THOWs are possible, sometimes because of ADU ordinances.
Should you build an ADU?
Share your project with me and we can have a chat about what an ADU might be able to do for you.