Are Granny Flat ADUs The Best Idea For Retirees in Los Angeles?

Are Granny Flat ADUs The Best Idea For Retirees in Los Angeles? 1Senior Preparing Food in a Granny Flat ADU     |    Credit: Getty Images

Is an ADU a Good Idea For Seniors and Retirees in Los Angeles?

You may have heard: the population of seniors and retirees is expected to surge in the near future. Over the next decade, California’s 65+ population is expected to increase to more than nine million people.  This group will grow much faster than the rest of the population, rising to 19 percent of the population by 2030. The senior population in 2030 will have more single and/or childless adults than it does today, suggesting more people living alone and therefore an increased need for senior housing options.  

Plenty of retired folks would agree that independence is a very significant part of a happy and fulfilling retirement. In many ways, an accessory dwelling unit becomes the ideal living arrangement during retirement. Having one’s own home allows a person to maintain independence and dignity. And being on the same property and just a few yards from their family or support network is important when the need for support arises. This is especially true for retired people who decide to no longer drive themselves. Although retirement is a fine balance between having independence and having support, an ADU might be the best of both worlds.

Here at GreatBuildz, a free service that connects homeowners with reliable general contractors, we get inquiries all the time about granny flats (A.K.A. accessory dwelling units) for seniors – read below to see if building a granny flat would be right for you and your family.

New ADU Regulations in Los Angeles and Southern California

A recent survey conducted by AARP indicated that 76% of people over 50 said they want to live independently & remain in their homes as they age. For California seniors, there is some good news in the form of new state regulations regarding ADUs and garage conversions or in this context, better known as ‘granny flats’.  These new regulations make it much easier to build an ADU (accessory dwelling unit) or convert your garage to an ADU.  

Every local municipality & city will create its own ordinance effectuating these rules, so please check your local city restrictions/guidelines.  In Los Angeles, for example, the regulations are quite friendly and allow almost any single-family property to either build an ADU in their backyard or convert their existing garage into living space. Essentially, these new laws allow most single homes to become a ‘duplex’ capable of accommodating two households instead of one. For more details on specific Los Angeles guidelines and options for building an ADU, see my other blog post about ADUs.

The new ADU laws in California also have an interesting component relating to JADUs – Junior Accessory Dwelling Units. A JADU is also a ‘secondary’ housing unit on a single family property, but it is required to be under 500sf and is likely to be attached to or ‘part’ of the main home. For an example, a garage could be a JADU. A 500sf unit is likely to be a studio or one-bedroom space with a bathroom and kitchen or kitchenette, which could work for a single senior. JADU’s come with an occupancy restriction which means that the owner of the property must live in either the main house or the JADU. And the owner can, of course, rent out the space which he or she is not occupying. A JADU can be a really interesting option for seniors looking to downsize or change their living arrangement to save costs. You can get more detail about JADUs in my blog “What is a Junior Accessory Dwelling Unit“.

Are Granny Flat ADUs The Best Idea For Retirees in Los Angeles? 2

3 Ways Accessory Dwelling Units Can Benefit Seniors

The ability to build an ADU provides several scenarios that might be advantageous for seniors; let’s discuss a few options.  

  1. Many seniors are on a fixed income upon retirement and any recurring monthly income can help them maintain their lifestyle. If they own a home, they have the option to build an ADU on the property. They can then either live in the main house and rent the ADU or vice versa, live in the ADU and rent the main home. In either case, they will have a tenant paying rent to help supplement their monthly income. Additionally, If the owner then decides to move out, they can rent both the home and ADU to two different tenants and benefit from two revenue streams from the same property!
  2. Another option is to build a granny flat for the purpose of housing a caregiver (be it a relative or paid person) to live on the property…this is especially common once the senior needs part-time or full-time care.
  3. Finally, a third option is for seniors to build an ADU on the property of their adult children.  This creates a multi-generational property where the extended family now lives together, but each still has its own home.

Why Should Seniors Consider Building an ADU?

Constructing an ADU or converting a garage may be a great option for seniors who would like to age in place, rather than move to a senior community or assisted living environment.  Building an ADU allows seniors to stay in their own neighborhoods and maintain their social contacts. Oftentimes, seniors are ready to downsize because they don’t need or can’t afford their larger family house. By moving into their own ADU designed specifically for aging in place, they can ensure they will be comfortable for many years to come.  They can design a single-story floor plan with no stairs, easy accessibility, and universal design.  

Currently, only 3.5% of California’s housing is designed for the aging population, so building a custom ADU for seniors often becomes a great option.  When beginning the granny flat construction process, it’s important seniors find an experienced designer or architect who can guide them through important design decisions for aging in place.  A few things to consider are no stairs/steps, no thresholds, wide halls, and doorways, grab bars in appropriate locations, door levers, reachability, non-slip flooring surfaces, walk-in showers, etc. 

According to an AARP survey, people over 50 consider building an ADU for the following reasons:

  • A place for a loved one who needs care (84%)
  • Provide a home for family or friends (83%)
  • A place for guests (69%)
  • Increased value of the property (67%)
  • Having someone live close by to feel more secure (64%)
  • Have a place for a caregiver to stay (60%)
  • Earn extra income (53%)

Are Granny Flat ADUs The Best Idea For Retirees in Los Angeles? 3Caregivers Can Live in Your Granny Flat     |     Credit: nih.gov

Cost of Building a Granny Flat

The cost of building a granny flat or ADU in Los Angeles can vary significantly by size, but here are a few starting points. To convert an existing garage to an ADU (300-400 square feet), you can assume a budget of $90,000-$120,000.  For a new ADU, you should budget around $300-400/sf, so a minimum of $140,000-$160,000 for a 400sf ADU.  

These are not insignificant amounts, but this is an investment that can be financed. Then, one can compare the monthly mortgage and expenses with the costs of living in a senior or assisted living community, which can often range from $3,000-$6,000 per month or more. 

Fortunately, retirees have several ways to finance an ADU project.  Obviously, they can pay for it from their own savings. Another option would be to finance this construction by taking out a home equity line of credit, securing a construction loan, or using a home renovation loan which is often a very quick process (but comes with a higher interest rate) from a company like Lightstream or SoFi.

How to Find the Right Contractor For Your ADU or Granny Flat

For seniors looking to build an ADU or even starting to explore the idea, it’s best to search for only local, licensed General Contractors.  No other contractors are qualified to do this sort of construction and using an unlicensed contractor or a handyman would be a mistake.

Any contractors you contact, always confirm they have experience with ADUs.  You’ll want to hire a contractor who has built ADUs in the past and knows the potential issues and pitfalls. Additionally, there are several other important criteria you should use in selecting a contractor, not including their cost estimate.

It’s extremely important to check their license on the Contractors State License Board website to confirm it’s active, there are no disciplinary actions, and it has Worker’s Compensation insurance associated with it (assuming the GC has employees).  

Also, ask the contractor for a copy of his/her insurance certificate and at least three references you can call. It’s also a good idea to do a Google & Social Media search of the contractor to ensure there are no major red flags.  

At GreatBuildz, we take contractor screening very seriously and perform all the above actions in addition to running a background/financial check and requiring contractors to sign our 20-point Code of Conduct.

Give us a call or submit the form below to get started. We’ll walk you through the entire process, introduce you to several fully vetted, trustworthy contractors who are experienced with ADUs,  and be by your side every step of the way. For more information about the GreatBuildz experience, see www.GreatBuildz.com

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