California has recently adopted some laws that have significantly changed the landscape for owners of both single-family homes and multifamily buildings. Specifically, under Assembly Bill No. 68 and No. 881, homeowners throughout the state are now allowed to build an Accessory Dwelling Unit (ADU) , a Junior Accessory Dwelling Unit (JADU) or both. If this is already too much jargon for you, here’s the definition of an ADU.
Here at GreatBuildz, a free service in Los Angeles that connects homeowners in Los Angeles, Orange County, Ventura or San Diego with reliable general contractors, we get inquiries every day about Junior ADU and garage conversion projects – here are some tips to get you started.
Junior Accessory Dwelling Unit – What is a JADU?
The new California ADU laws which went into effect January 1, 2020, allow homeowners to build a Junior Accessory Dwelling Unit (JADU) on their property in addition to the main house and an ADU. The Junior ADU is limited to 500sf, but that’s enough space for a studio or 1-bedroom unit. Los Angeles and other Southern California cities are following the direction of the State and integrating these new laws into their specific ordinances.
The California and Los Angeles requirements state that the JADU unit must be within the existing ‘envelope’ of the main home (with an ability to add an additional 150 square feet for ingress/egress). Let’s explain that and give a few examples…
If you have an attached garage, it is considered to be within the envelope of the home, so you could convert it into a Junior ADU (maximum 500sf). Alternatively, if you have an extra bedroom (or two) or other space in your home that you’re not using, you could ‘wall it off’ to separate it from the rest of the house and create a JADU out of that space. If neither of these is possible, you could consider doing an addition to your home (be it a large bedroom or family room), and then convert that space to a JADU by adding a kitchen/bathroom/etc.
Los Angeles Junior Accessory Dwelling Unit Guidelines & Requirements:
-Must have a separate entrance from the main house, so you’ll want to install an entry door to the JADU, likely at the side of your home.
-Junior ADU can have its own bathroom or could share a bathroom with the main residence.
-Must have an efficient kitchen, including:
- The required kitchen sink (16”x16” max.) should have a small drain line (1.5” diameter max.)
- No appliances that require natural or propane gas
- A food preparation counter and storage cabinets that are of reasonable size in relation to the size of the JADU
- Appliances that do not require electrical service greater than 120 volts
-No parking is required for the JADU unless you convert an attached garage. If converting a garage, you can create replacement parking using an existing driveway, assuming it is large enough to fit two cars.
-The JADU comes with an occupancy restriction. This means that you, the owner of the property, must either reside in the main home or in the JADU…and cannot rent out both areas. (This restriction pertains to a JADU only, NOT an ADU). This owner-occupancy clause states:
[JADUs] Require owner-occupancy in the single-family residence in which the junior accessory dwelling unit will be permitted. The owner may reside in either the remaining portion of the structure or the newly created junior accessory dwelling unit. Owner-occupancy shall not be required if the owner is another governmental agency, land trust, or housing organization.
You can find more specific Los Angeles ADU and Junior ADU requirements by reviewing this city memo: https://planning.lacity.org/odocument/ec892d01-7873-455a-8e15-78a771b2c7ac/ADU_Memo_2020_Final_2.26.20_(1).pdf
What’s the Difference Between an ADU and a JADU?
Put simply, a junior ADU is a simpler, smaller version of an ADU within the existing footprint of a home. Since there are fewer requirements (i.e. smaller kitchen, no bathroom requirement, shared utilities with home, etc.), that means a lower cost for construction. See the diagram below for a line-by-line comparison (Source: https://www.hcd.ca.gov/policy-research/docs/faqsadujr.pdf)
Building a Junior ADU in Los Angeles
Now by building an ADU and/or JADU, a Los Angeles single-family property can essentially become a duplex or triplex! Your property can potentially now include your main home, a 1200sf max ADU, and a 500sf max junior ADU. Also, you have the right to rent two of the three units (remember the JADU comes with an occupancy restriction discussed above).
When it comes to building a JADU on your property, the first step is to do some research and get some free advice from a knowledgeable source to make sure you can accomplish what you envision on your property based on your city’s rules. Our staff is always available for a free 15-minute call to help with this.
Next, you’ll want to hire a designer or small architect firm to draft your plans so they can be submitted to the City Department of Building and Safety for plan check. These plans should cost you approximately $4,000-10,000 depending on your needs.
Simultaneously as you work with an architect, you should also meet one or more experienced contractors Junior ADU contractors, who will come to your home to review your plans and project vision and provide some feedback about the location constraints, utilities, size, design, estimated costs, etc. You can prepare for your meetings with contractors by reviewing our ADU/JADU construction checklist
Once your plans are fully finalized, the JADU contractor(s) will do a detailed estimate and bid. Once the Los Angeles building department approves the plans and issues a permit, the owner will select their desired contractor and sign an agreement for the work. Finally, construction can commence.
How much does a Junior Accessory Dwelling Unit cost in LA?
JADU’s cost will vary greatly based on the materials, options, and sizes you choose. If you’re converting a portion of your home, that will be cheaper than converting a garage.
When creating a JADU from an attached garage, some of the major components like the foundation, exterior walls, stucco, & roof already exist. Therefore, the construction entails items such as constructing the fourth wall (where to the garage door was), installing any interior walls & ceilings, a kitchenette, bathroom, flooring, windows and doors, plumbing, electrical, HVAC, insulation, and connecting to a sewer line.
JADU garage conversion cost will range from $70,000-$110,000 depending on the homeowner’s needs and requirements. If you want a few suggestions on how to save money when building a JADU, check out my 5 Cost-Saving ADU Tips blog.
How do I finance a Junior ADU?
Homeowners have multiple ways to finance their junior accessory dwelling unit project. Obviously, they can pay for it from their own savings. Or they can 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 RenoFi, Lightstream or SoFi. For a complete and detailed list of JADU financing options, see my other article on the topic.
Related: Los Angeles ADU Financing Guide
How long does it take to build a JADU?
To build a JADU, you can expect the entire process to take 3-6 months, which includes the time to design the architectural plans, wait for the city to conduct a plan check, and finally, the construction process – which will take about 2-3 months.
Why are Los Angeles homeowners building JADUs?
Converting a portion of your home or your existing garage is a very cost-effective way of creating more or different livable space on your property or extra rental income. LA residents have a variety of different plans and reasons for building JADUs.
Some people are doing it so they can create a separate unit for a family member, be it an aging parent or a college-age child. Others are using it as extra space for such uses as a guest house, office, gym, mancave, she-shed, music studio, etc. Some retirees are moving into their JADU so they can rent their main house for retirement income. Still, others have the plan to rent the junior accessory dwelling unit for extra rental income.
If you’re planning on creating a rental JADU, you can probably fit a small one-bedroom unit within 500sf (or a large studio unit). Make sure it has its own entrance and good access, and try to include storage space and a laundry area if possible to maximize rents. You can certainly expect to achieve a good rental rate on your ADU, potentially between $1,200 – $2,500, depending on the location of your property. Check out this guide to rental ADUs for more details and rental rates.
Local investors are increasingly drawn to JADU investments as they see the potential of JADU rental income. Even if you’re creating a JADU for investment purposes, you shouldn’t skimp on the quality of the construction. For your project, be certain to pick a licensed, insured, and trustworthy JADU contractor. You’ll want to generate rental income and profit for a long time, so poor construction might impede your ability keep your tenant comfortable. In addition, don’t forget to call your insurance agent and add the JADU to your coverage, and include a policy to protect you against any accidents or damages caused by the tenant. Local investors are increasingly drawn to JADU investments as they see the potential of JADU rental income. Even if you’re creating a JADU for investment purposes, you shouldn’t skimp on the quality of the construction. For your project, be certain to pick a licensed, insured, and trustworthy JADU contractor. You’ll want to generate rental income and profit for a long time, so poor construction might impede your ability to keep your tenant comfortable. In addition, don’t forget to call your insurance agent and add the JADU to your coverage, and include a policy to protect you against any accidents or damages caused by the tenant.
New ADU Laws for 2024:
New California Laws and Their Potential Effect on ADUs
Recent legislation in California aims to further ease restrictions and regulations around building accessory dwelling units (ADUs) on properties. However, the practical on-the-ground impact of these new laws remains to be seen. Here is an analysis of three notable new ADU laws.
AB 1033 – Separate Sale of ADUs
AB 1033, enacted in late 2023, opens the door for ADUs to be sold separately from the main home on a property. Previously, this type of separate sale was not allowed under state law. However, the law does not mandate that all cities and municipalities allow this – it simply gives them the option to pass local ordinances enabling separate sales of ADUs if they choose.
If a city does allow it, homeowners would need to legally convert their property into condominiums, dividing ownership between the main home and the ADU. This is a complex, time-consuming, and expensive process requiring attorneys, surveyors, local approvals, and much paperwork. It also may require approval from mortgage lenders.
So while this law makes it theoretically possible to sell ADUs separately in the future, the hurdles of actually doing so will likely limit its real world adoption. The financial and legal complexities may make it impractical for many single-family homeowners.
AB 976 – Restrictions on Owner-Occupancy Requirements
Prior to 2022, California municipalities could prohibit homeowners from renting out ADUs to non-owners until 2025. This law eliminates any sunset date, meaning cities are now permanently banned from imposing owner-occupancy requirements for ADUs. However, cities can still limit ADU rentals shorter than 30 days.
By removing the potential for future owner-occupancy restrictions, AB 976 aims to protect and expand ADUs as a source of long-term rental housing stock in California. It provides clarity to homeowners that renting their ADU will remain allowed going forward.
AB 434 – Pre-Approved ADU Building Plans
AB 434 requires all California cities to create a program offering pre-approved ADU building plans by 2025. Homeowners would have access to pre-vetted designs approved for their jurisdiction to choose from. This has the potential to simplify and accelerate the ADU design and permitting phases for homeowners selecting one of these pre-approved plans. Its presumed that architects will be the ones who upload their plans to a cities’ pre-approved website, and any homeowner who would like to utilize one of these plans will still have to pay a fee to the architect.
However, pre-approval does not eliminate the need for customization in many cases. Each property has unique considerations that might require alterations to the pre-approved designs. Fees and full plan checks may still apply as well. So while this program aims to streamline the process and lower costs somewhat, the magnitude of impact remains to be seen.
How To Find A JADU Contractor
Here are a few tips for finding the right contractor for your JADU in Los Angeles. It’s best to search for only local, licensed General Contractors. Other contractors are not qualified or equipped to do this sort of construction, and using an unlicensed contractor or handyman is not a good choice. With any contractor, you contact, confirm they have experience building ADUs or JADUs. You want to hire a contractor who has built ADUs, JADUs, or garage conversions in Los Angeles and therefore knows the regulations and potential issues that may arise.
There are several other criteria you should consider when selecting a contractor. Check each one for a valid contractor’s license on the Contractors State License Board website to confirm it is active, there are no derogatory actions, and it has Worker’s Compensation insurance (if the GC has its own employees). Also, confirm they are insured and get a copy of their insurance certificates.
Ask your contractor to provide you with at least three references you can call. Lastly, check their reviews online on Google, Yelp, or other sites. If you want more tips on how to find a great JADU contractor check out my blog: 10 Tips To Hire an ADU Contractor
Ideally, you should meet and get bids/estimates from at least three JADU Contractors. If you prepare a scope checklist in advance and hand it to each contractor, that will help you get bids that are more consistent. Be cautious to not just choose the lowest bid. Instead compare the bids carefully to ensure they are thorough and fully inclusive of everything involved in your project. Keep in mind that some contractors might include the cost of finish materials while others will not, so you’ll need to go line by line on each bid to compare them accurately.
When you’ve narrowed down your list of JADU contractors, you should do some vetting to ensure that these companies don’t have any red flags that might concern you. Check their online reviews (especially any negative reviews) and do a thorough google search of their company and owner’s name. Also, ask them for a list of references (previous clients) and call these people to get their opinions of working with this contractor.
Related: Garage Conversion ADU Insurance Info
If you want to learn more about the process and costs of building a JADU on your property, please check out my other blog posts below. When you’re ready to take the next step and talk to a contractor or designer/architect about your specific JADU project in Los Angeles, Orange County, Ventura, or San Diego, please feel free to call one of our friendly GreatBuildz staff at 818.317.3567 or at www.GreatBuildz.com.
FAQs
Q: Can I build both an ADU and a Junior ADU on my property?
A: Yes, you can build both an ADU and JADU on a single-family property – however there is still an owner-occupancy requirement for JADUs.
Q: Can my Homeowners Association stop me from building a JADU?
A: According to the most recent state laws, your HOAs & CC&Rs should not preclude you from building a JADU.
Q: Can I legalize an unpermitted Junior Accessory Dwelling Unit or garage conversion?
A: Yes, but you will need to bring the JADU up to code and complete the construction that is required. For these types of JADU questions, a good contractor can look at your existing conversion and give a rough estimate of the costs.
Q: Where can I get a construction checklist of what items go into building a JADU?
A: You can get a construction checklist here: Building An ADU? This Construction Scope Checklist Will Keep Your Bids Consistent
Q: Does building a JADU on a single-family property make the home subject to rent control?
A: Maybe. It’s unknown how this will play out. Because the JADU is new, it shouldn’t be subject to rent control, but the main house (if it was built prior to 1978) could be subject to rent control if it’s rented out. See this link: https://planning.lacity.org/ordinances/docs/ADU/InformationSheet.pdf
Q: Will my property tax go up if I build an ADU?
A: Most likely, the tax assessor will increase the value of your property to include the value of your new JADU but will not re-assess your existing home. Check out the Assessor’s website for more info.
Q: Is building a JADU a good investment as a rental?
A: This depends on several factors, but it could be a good investment because you’ll get cash flow from the rental PLUS it adds to the value of your home when you sell it. See more guidance on my blog for real estate investors.
