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Essential Information on Accessory Dwelling Units

Having additional living space on your property can bring many benefits, ranging from mere convenience to additional income that can last for decades.

Typically, people build accessory dwelling units, also known as “ADUs” or “granny flats” on their property in order to provide a comfortable yet separate, private, and independent space for an aging parent. These units also give your property a space that can act as a small guest house.

The other motivation is financial. By building an accessory dwelling unit, you can have a rental space directly on your property. Depending on the area, you may be able to get an outstanding return on your investment, as small rental spaces are in high demand, especially in college towns or areas with many young professionals.

Some areas do have restrictions on short-term rentals, such as renting the property as a weekly vacation home. According to regulations from the San Diego County Planning & Development Services, an ADU cannot be used for short-term rental periods, which they define as less than 30 days.

What Every Property Owner Needs to Know About Accessory Dwelling Units

Most Single-Family Homes are Eligible for ADUs

While the specific laws will change depending on the state and municipality, in California the vast majority of single-family properties in residential areas are eligible for accessory dwelling units. As long as there is reasonable room for the building you should be able to create an ADU. The new unit only needs to be ten feet from the main residence and five feet from the property lines, so many people will have the space they need for a granny flat.

City and county regulations will apply, so check your local laws for more detail.

ADUs Can Be Attached to the Home or a Separate Building

To add greater flexibility to the use of ADUs, you can create one of these units as an entirely new building or as an addition to an existing structure. This means that you could use an existing garage, pool house, or any other building (assuming the building is still in good quality) to create a granny flat on your property.

You can also build these facilities as an attachment to the main residence.

Prefabs Are an Acceptable Option

Although they will need to fit with any local regulations regarding size and design, prefabricated units are an acceptable way for homeowners to build a granny flat. And don’t fall into old thinking: prefabricated does not mean low-quality, as there are many excellent companies that create top-quality prefabricated units that have style, comfort, and elegance.

There may be limits on minimum size in your area, which means prefabricated products that are allowed in your space may not be available. That said, prefabrication remains a viable options for your ADU.

Be Aware of State and Local Laws for ADU Size

As we mentioned above, there are different state and local regulations in regard to the minimum and maximum size allowed for accessory dwelling units. In California, an ADU that is attached to the house can only be 1,200 square feet or half the square footage of the existing structure, whichever is smaller.

Some cities, however, require that granny flats and ADUs be even smaller. In Santa Monica, for example, there have been laws limiting ADUs to 650 square feet or less, while other cities have ordinances limiting them to 600 square feet.

In San Diego, the current regulations dictate that the ADU can only be 50% of the residence floor space but it’s also capped at 1,2000 square feet.

Proper Permits and Registration Required

If you have a large yard, you may consider building an unattached ADU.

No matter where you live, you will likely need to run projects through the local department of building and safety. These plans will have to include diagrams and measurements for the new unit, and once the ADU is completed, you’ll need to complete a certificate of occupancy before anyone can live in the new space. The certificate of occupancy will be completed by a professional who will inspect the space for proper electricity, plumbing, and heating.

What’s the Cost of an ADU?

If you are interested in building an accessory dwelling unit on your property, you probably have one important question: how much will it cost? The answer, of course, varies wildly depending on the type of construction you perform, as well as the types of features and amenities you include. However, there are some sources we can turn to for general numbers.

According to Maxable, a site dedicated specifically to ADU information, the cost to build a granny flat in the San Diego are is roughly $350 per square foot.

Assuming $350 per square foot, the total cost translates to:

  • 400 sq ft: $140,000
  • 500 sq ft: $175,000
  • 600 sq ft: $210,000
  • 700 sq ft: $245,000
  • 800 sq ft: $280,000
  • 900 sq ft: $315,000
  • 1,000 sq ft: $350,000
  • 1,100 sq ft: $385,000
  • 1,200 sq ft: $420,000

While these numbers may not be entirely accurate, as the cost-per-square-foot will likely decline as the unit gets larger (for example, it’s probable that the cost-per-square-foot of a 1,200-square-foot unit is less than a 400-square-foot unit), but it does demonstrate the potential high costs associated with ADUs. The high cost means many homeowners will need financing if they want to build a granny flat.

Use a HomeStyle Renovation Loan to Finance Your Accessory Dwelling Unit in San Diego

If you are interested in enhancing your property with an accessory dwelling unit in San Diego, contact our helpful staff today. Through the use of our Fannie Mae HomeStyle Renovation loans, we can help you get the appropriate financing for your granny flat.

These excellent loans cover a wide range of renovations, including new bedrooms, structural changes, cosmetic upgrades, and detached accessory dwelling units. Our staff can help you get the right information and assist you through the application process so you can build a wonderful granny flat that will enhance your property.

Contact our staff today for more information on using a HomeStyle Renovation loan to fund the construction of your accessory dwelling unit.


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Chad Baker, CrossCountry Mortgage   
NMLS# 329451 | CCM NMLS# 3029