Everything You Need Know About Creating Multi-Family ADUs But Did Not Know to Ask
By John Taferner
Accessory Dwelling Units (ADUs) are a new income stream for property owners. Before 2020, only single-family lots were allowed to add an ADU, which meant multi-family lots were left behind in the ADU boom. Now, things have changed in the state of California, and the opportunities for multi-family properties owners are incredible and for the taking. Property owners can now earn more money by building multiple ADUs to rent or can create a compound with several units for families.
What Does it Take to Create a Multi-Family ADU?
The structure is what makes a dwelling “multi-family”, not zoning or the property. To be classified as multi-family, the property must consist of two or more residential dwellings that are attached to one another. Two or more houses on a single lot that are not attached are not considered multi-family dwellings. If you own apartment buildings, condos or a duplex with two units that are attached, those are all considered to be multi-family dwellings.
Does Your Multi-Family Property
Qualify for the New ADU Regulations?
To create “multi-family ADUs, your property must be in a residential zone. If you own a duplex or apartment building that is in an Industrial zone, even though that structure is multi-family, you cannot take advantage of the ADU multi-family opportunities.
Every multi-family dwelling is allowed at least one ADU converted from accessory space. For buildings with four or more units, a formula determines how many ADUs you can convert: 25% of the number of units in the building. There is a gray area until you get to eight units, at which point you can convert two accessory spaces to ADUs, because two is 25% of eight. The grey areas are decided by jurisdiction. This is true in any scenario where the number could be rounded up or down: your jurisdiction gets to decide. If you own an apartment building with 20 units that are all attached to one another, you can build two detached ADUs and also convert accessory spaces to five ADUs – five is 25% of 20.
When it comes to parking, you are allowed to remove some parking to create new ADUs. The company you hire will know what that number is. They should also be able to alert you to any pitfalls, like upgrading any MEP (Mechanical, Electrical and Plumbing) requirements and the additional cost you could incur when creating your ADU. Costs for creating your ADU will vary, depending on scope of work and upgrades.
Different rules apply to each of the “multi-family ADU options, and you should consult with your city officials for these rules. In addition to the two detached ADUs, you are also allowed to convert attached accessory spaces to ADUs. These are spaces that are attached to the main structure but not permitted as living spaces–things like covered garages, utility rooms, storage rooms, community rooms, basements, or attics. To learn more about ADUs and the law, go to hch.ca.gov. Knowledge is power and can save you money.
The Benefits of Multi-Family ADUs
Creating “multi-family” ADUs on your property gives you many unique benefits, but nothing compares to the value it adds to your property over time. With today’s rental prices, property owners who build ADUs have the potential to generate substantial additional rental income. Without adding land, adding units to your existing property will increase the property value and build more equity.
What You Look For in a Company
To Build Your “Multi-Family ADUs”
When choosing the company that is right for your property and ADU needs, choose someone local. A local company should know the local laws and ordnances of which you might not be aware. They are also right around the corner for any issues that might arise while your ADU is being built.
Experience is one thing that money cannot buy. Choose a company that has been around the block and that has substantial experience and a good track record. This will make the ADU process go smoothly and give you reassurance.
Find a shop that will do the entire job from start to finish, turnkey. Turnkey will make the process a lot easier on you. Not having to deal with a laundry list of vendors with different needs and wants will make the job go smoothly and be less taxing on you.
ADUs are the gifts that keep on giving.
John Taferner, owner of Cal-QuakeADU has built a strong reputation as a dependable, reliable resource in construction and retrofitting for over 35 years. Cal-QuakeADU is part of the parent company Cal-Quake Construction. Cal-Quake is located in Los Angeles and offers many services, including a complete turnkey service for multi-family ADUs. For more information, visit Cal-quakeadu.com, call 800-351-2969 or email [email protected].