What is an Accessory Dwelling Unit?

An Accessory Dwelling Unit (ADU), also known as a granny flat or in-law suite, is a smaller, mostly independent residential unit located on the same lot as a single-family home.

How is an ADU different from a second house?

ADU’s are subject to certain limitations, like size and height, intended to result in new units that integrate into existing neighborhoods unobtrusively. The State has passed laws that encourage development of ADUs by limiting the ability of the local agency (The City of Oceanside) to impose restrictions on ADU’s, so long as the proposed units meet the limitations prescribed by the State. In contrast, a second home developed outside of the ADU pathway would not be subject to the ADU limitations, but would be subject to the City’s underlying zoning limitations, which are typically much more restrictive when it comes to developing additional units on a lot that is zoned for a single family house.

Why build an ADU?

Homeowners consider building an ADU for a variety of reasons. Some want space for visiting family and friends, or long-term housing for aging relatives. Others use their ADU as a rental unit for supplemental income. Others view their ADU primarily as an investment, to add equity to their property.

What are the main ADU types?

Designs vary widely from site to site, but ADU’s fall generally into 3 categories: Detached, attached, and Junior (known as a JADU). Space for an ADU can be newly built, conversion of existing residential or nonresidential space, or a combination of both.

What is a Junior ADU (JADU)?

A JADU is an ADU that is 500 square feet or less, and built entirely within existing space. JADU’s are subject to different rules and restrictions. For instance, they can share a bathroom with the main house, and can have a small “efficiency'“ kitchen instead of a full-sized kitchen. They are often cheaper to build than standard ADU’s. JADU’s have an owner-occupancy requirement, meaning the owner must reside in either the main residence or the JADU.

How many ADU’s can I put on my property?

Homeowners are entitled to build as many as three ADU’s: one detached, one attached, and one JADU. JADU’s are subject to an owner-occupancy requirement, meaning the owner must reside in either the main residence or the JADU.

How do Utilities work?

ADU’s are connected to public utilities via the connections of the main house. Separate meters are installed to track the utility usage of the ADU. The electric meter is typically read by the electric company and billed to the ADU separately. The water line to the ADU must be equipped with a private water submeter, that allows the homeowner to split the bill manually between the main home and the ADU. The ADU does not receive a separate bill from the water company. SDGE has directed that all dwelling units must have separate meters. However, enforcement of this requirement is at the City’s discretion.

How does an ADU affect my property value?

Building an ADU will add value to your property in the form of equity. The amount of equity, and the return on investment, is difficult to forecast because it depends on multiple site specific and market factors.

How does an ADU affect my property taxes?

Many homeowners are reluctant to build an ADU, for fear that their entire property will be reassessed at current market value, resulting in higher taxes. Rest assured, building an ADU will not impact the valuation of the existing house. Rather, an ADU will trigger a “blended” assessment, wherein the value of the ADU (typically assumed to be the cost to build) is added to the previously assessed property value, and the sum is used as the new basis for property taxes. The new assessment will increase property taxes, but not to a level commensurate with current market value of the overall property. Please consult your tax professional for more detailed information.

How does ADU rental income affect my income taxes?

Most homeowners who use their ADU’s as rental units choose to count the rental income as personal income, for simplicity of tax filing. Taxable rental income can be partially offset by taking advantage of certain write-offs. For instance, appliances are assumed to depreciate over 5 years, so 20% of the cost of appliances can be written off every year during the depreciation period. Likewise, the unit itself is assumed to depreciate over 27.5 years, so the cost to build can be similarly written off. Other costs like maintenance, and even the value of the owner’s time spent maintaining the unit can be counted against rental income, to decrease the associated tax burden. Please consult your tax professional for more detailed information.

Can I convert my garage into an ADU?

You almost certainly can convert your attached or detached garage into an ADU. The question is whether doing so makes financial sense. Newer garages that were designed and built closer to conformance with modern building codes will require less cost and effort to bring up to code for habitation. Older garages can require much more work to meet code minimums. Additionally, the materials that comprise an older garage (stucco, siding, roofing, framework) often have substantially less remaining useful service life compared to a new-build. Which means, even if brought up to code minimums, the other material deficiencies will need to be addressed (at extra cost) to avoid maintenance headaches in the future. Often times, a full tear-down and rebuild is the better option.

One common issue that effectively precludes many old garages from conversion is the absence of a continuous foundation footing under the exterior walls. Modern building foundations have a thin slab under the interior floor (where applied loads are minor) and a thick continuous footing, essentially a trench filled with concrete and rebar, under the exterior load bearing walls (where loads are high). An exterior footing is particularly important for a building’s ability to resist earthquake loads, so California considers footings to be essential for all slab foundation dwelling units. Installing a continuous footing under an existing garage can be done, but it is a tedious, invasive endeavor. For old garages with this issue, a full rebuild is usually the best course.

Can I build a 2-story ADU?

It depends.

For Attached ADU’s:

The height limit is 25 feet, or the height limit of the underlying zoning ordinance, whichever is lower. Attached ADU’s can often be 2-stories without issue.

For Detached ADU’s:

If you are relying on the decreased 4-foot setback afforded to ADU’s, you are subject to certain height restrictions.

If instead you abide by the setbacks of the underlying zoning district (example: 15-foot rear, 7.5-foot side), then your new unit would be subject to the standard zoning height limitation, which often allows for taller buildings.

For units using the decreased 4-foot setbacks, the height limitation is 16-feet for properties not within 1/2-mile walking distance of a “high quality transit corridor”, and 18-feet for properties within 1/2-mile of a “high quality transit corridor” *. The 18-foot limit is also increasable to 20-feet, if needed to make the new unit’s roof pitch match the roof of the existing building.

There is a world of difference between 16-feet and 18 (or 20) feet, when it comes to feasibility of two-story development. Building a two-story home under 16-feet in height is possible, but it necessitates low 7-foot ceilings, and requires exotic building materials that are selected more for their thin profile than their cost effectiveness (for example, thin high-efficiency spray-foam insulation). The resulting unit is higher cost, and feels somewhat cramped. But for some owners, this is a compromise worth making to effectively double square footage compared to a single-story unit of the same footprint. Architectural mitigation measures like adding extra windows, doors, skylights, and outdoor spaces can help make a low-ceiling ADU feel larger than it is.

The 18-foot limit, on the other hand, gives the homeowner substantial flexibility. The owner can still use the thin profile materials, and max-out ceiling heights to the standard 8-feet. Alternatively, the owner can compromise somewhat on ceiling heights (say, 7-6” ceilings) and use the extra space for less expensive building materials, like standard fiberglass insulation.

*The California Department of Housing and Community Development has defined a “high quality transit corridor” as a major transit hub (think bus or train terminal), or a street with a fixed bus service with intervals no longer than 15 minutes during peak commute hours. Much of Downtown Oceanside meets these criteria, as well as many properties near the 78 freeway, those near the Sprinter route (along Oceanside Blvd), and properties near the San Luis Rey Transit Center on North River Rd. and Vandegrift Blvd.

Is there a limit to the number of bedrooms in an ADU?

No such limit can be imposed. However, there are other design provisions governing general building features that effectively constrain the maximum number of bedrooms possible. For example, minimum bedroom size is 70 square feet, and all bedrooms must have windows to the exterior for use as a fire escape. There is no minimum number of bedrooms.

Will my project require a soils report?

It depends. The City of Oceanside has full discretion over whether to require a soils report for a given project. Typically all new builds over 1000 square feet, and all 2-story buildings require a soils report. The City also has information on areas with soil prone to settlement or soil expansion, and may require a soils report for projects within these areas.