Is anyone really surprised that the LA area has become one of the most popular markets for accessory dwelling units (ADUs)? California started rolling back restrictions on ADU construction and permitting back in 2017. Since then, the City of Los Angeles has issued over 20,000 permits for ADUs; independent living spaces that share a land lot with a primary residence. With this infusion of investment housing into the market, property-minded Angelenos are reframing not just the way they think of housing, but also new income opportunities and whether a big yard is essential to the residential dream.
The Very Good Reason Behind the ADU Construction Boom
Not too long ago, new ADU construction was too slow-moving and costly for it to be worth the investment for many homeowners. But the times have changed. Over the past several years, California state law has adapted to the state’s housing inventory shortage.
For example, the original parking minimum that once accompanied the addition of an ADU has been eliminated for the most part. At one time, owners were required to live on the premises, but that is no longer the case. The ADUs themselves are even getting bigger. Current laws allow homeowners to erect a detached ADU that can reach a 1,200-square-foot maximum and boast soaring 16-foot-tall ceilings. It lends a certain flexibility to ADU design that was long missing from LA’s housing market.
Why LA Area ADUs Are Easier Than They’ve Ever Been
ADU construction has also been fast-tracked to some degree through relaxed permitting. California law requires local agencies to complete the processing of ADU applications within 60 days. Los Angeles has embraced this law, expanding its array of pre-approved ADU plans. These are basic designs that offer developers the chance to skip the most time-consuming aspect of the approval process. In many cases, these applicants receive approval in mere weeks.
High Cost with a Worthwhile Return
That’s not to say that ADU construction in the LA area is cheap. However, the relaxing of legal restrictions has made some ADU designs slightly more affordable. Standard price ranges for common ADU designs in LA include:
- Garage Conversion: $80,000 – $180,000
- Pre-Fab Unit: $100,000 – $250,000
- Custom Detached: $150,000 – $350,000
However, it’s important to recognize where these figures land in LA’s competitive housing market. Single-bedroom ADUs in LA rent from anywhere between $1,800 and $2,500 a month. Two-bedroom ADUs can easily net anywhere from $2,200 to $3,200 per month. So, if you manage to muster the upfront collateral, ADU construction can be a very lucrative and worthwhile enterprise for a savvy homeowner looking to offset mortgage costs or establish long-term rental income.
ADUs in LA are Getting Even Easier
Believe it or not, ADU construction is getting even easier in Los Angeles thanks to a slew of new state legislation. For example, some properties along the coastline are getting exempted from review of the long-established Coastal Act. Meanwhile, residents impacted by natural disasters, such as January 2025’s historic wildfires, are being granted options to occupy their ADUs before completing reconstruction of their main residential unit. There’s even a new process that makes it easier to get legal permitting for unpermitted ADUs before 2020. New ADU construction is also exempted from rent control measures for 30 years, which is enough to push even the most reluctant homeowners to start building.
Are ADUs a Permanent Part of LA Real Estate Now?
With over 18 million people calling the Greater LA area home, 20,000 new ADU permits may seem like a drop in the ocean. But this glut of ADU construction indicates that these units are no longer a niche solution available to only seasoned investors. With permitting fast-tracked, more predictable upfront costs, and new opportunities for creative construction, we expect to see more ADUs hitting the market while backyards become a disposable piece of the residential dream. If you’re considering ADU construction, we can honestly say the conditions have never been better.
But keep in mind that regulations in California are always evolving. Before committing to your ADU addition, it’s advisable to consult with a representative of LA City or County Planning. Or, you could consult one of our reliable real estate agents for assistance gathering the information you need.
With a brand that says as much as JohnHart’s, Senior Copywriter Seth Styles never finds himself at a loss for words. Responsible for maintaining the voice of the company, he spends each day drafting marketing materials, blogs, bios, and agent resources that speak from the company’s collective mind and Hart… errr, heart.
Having spent over a decade in creative roles across a variety of industries, Seth brings with him vast experience in SEO practices, digital marketing, and all manner of professional writing with particular strength in blogging, content creation, and brand building. Gratitude, passion, and sincerity remain core tenets of his unwavering work ethic. The landscape of the industry changes daily, paralleling JohnHart’s efforts to {re}define real estate, but Seth works to maintain the company’s consistent message while offering both agents and clients a new echelon of service.
When not preserving the JohnHart essence in stirring copy, Seth puts his efforts into writing and illustrating an ongoing series entitled The Death of Romance. In addition, he adores spending quality time with his girlfriend and Romeo (his long-haired chihuahua mix), watching ‘70s and ‘80s horror movies, and reading (with a particular penchant for Victorian horror novels and authors Yukio Mishima and Bret Easton Ellis). He also occasionally records music as the vocalist and songwriter for his glam rock band, Peppermint Pumpkin.
