2023 ADU & Garage Conversion Guide For Orange County

Everything You Need To Know About Garage Conversions in Orange County

An ADU (see ADU definition here) is an accessory dwelling unit, otherwise commonly referred to as a granny flat, additional dwelling unit, or garage conversion. It can be defined as a second living unit on a residential lot in addition to the main home or multifamily building.

In California and Orange County specifically, ADU ‘dwelling units’ have been getting a lot of interest because the state has drastically removed the major restrictions around building ADUs. And this has led to many homeowners considering building such units in their backyard or converting their garage into an ADU.

Here at GreatBuildz, a free service that personally matches homeowners in Los Angeles, Orange County, Ventura or San Diego with reliable general contractors, we talk to homeowners every day about their ADU and garage conversion projects – here are some key points to know.

California State ADU Law Changes for 2023

First off, you need to be aware of the latest rules & guidelines that have recently gone into effect to make accessory dwelling units truly viable for many Orange County homeowners. The state of California wanted to help assuage the housing crisis and therefore has required all cities to reduce local restrictions on building ADUs.

The below regulations have been passed at the state level, so be aware that every city in Orange County will approve its own specific set of guidelines, based on these latest changes. You must check with your Planning Department staff about specific guidelines and restrictions that apply to you.

• Increased the maximum size of ADU allowed
• Allowed ADUs on all single-family properties, with no minimum lot size requirement
• Allowed ADUs on multi-family properties 
• Allowed different types of ADUs – detached, attached, garage conversion, second story
• Reduced setbacks for ADUs to rear/side property lines to 4 feet
• Waived or reduced impact fees in some cases
• Allowed ADUs to be used as rental units for a tenant
• Stipulated that local HOA/CC&Rs cannot restrict building ADUs
• Parking – ZERO parking is required for ADUs in many cases, as long as the home is within 1/2 mile from any transit stop.
• City approvals – ADUs and garage conversions, in most cases, don’t require any city approvals.  You don’t need approvals from the city planning dept, neighbors, planning boards, etc, as long as you’re plan is within the city guidelines. Building an accessory dwelling only requires submitting building plans to the building department and going through the plancheck process to get a building permit.

Each city in Orange County is creating its own unique rules that generally follow the State’s ADU laws, but each will likely have its own specific differences. We have provided resources to all Orange County city’s ADU guidelines at the end of this article.

What kind of ADUs are there?

There are generally two options for a granny flat: either building a new free-standing unit in the backyard or converting an existing garage to an ADU.

A garage conversion is the most cost-effective choice because the basic garage structure already exists. The downside could be the size – most garages are usually 300-400 square feet. This is still large enough for a ‘studio’ or a small 1 bedroom space with both a kitchen and bathroom. It’s cost-effective because the ’bones’ of the structure already exist including the slab, exterior wall, roof, etc.

A newly built ADU in Orange County can be in one of a few forms. It can be attached to the main home, attached to a detached garage, or fully detached. It can be one or two stories, and usually have a maximum height of 25 feet, though in some cases height may be limited to only 16 feet. It will be located in the backyard or side yard and not in front of the main residence. Some homeowners have even built an ADU above their existing garage.

A new detached ADU can be a maximum of 1,200 square feet in size. A 400-600 square foot ADU is good for a one-bedroom unit and a 600-1,200sf structure can be to be up to three bedrooms and two or three baths with one or two stories.

Why build an ADU on your property?

Many people are excited about the new rules and guidelines and are exploring the possibility of building an ADU on their lot, but why?

It comes down to two things: the ability to add living space to their property and the tremendous variety of potential uses of an accessory dwelling unit.

Adding space to a home previously meant building an ‘addition’ or second story, which can be difficult. Not only was it costly, time-consuming, and required changes to the layout of your home, but it also meant living with the dust & chaos of construction in your home. In some cases, such as adding a second story, the homeowners would have to move out of the house for an extended period of time during construction.

An ADU solves these issues and allows for a lot of flexibility. Homeowners are building them as extra space (a dedicated office or a guest house), a music or yoga studio, a mancave or she-shed, or a separate home for retired parents or post-college kids. Because an ADU has both a kitchen & a bathroom, it can always function as its own separate living space.

In addition, homeowners may also use them as a rental unit for additional income. We’ve also witnessed several retired homeowners build an ADU so they can move into it (to downsize) and rent out their primary residence as a source of retirement income. That’s pretty smart. Orange County rental rates are at historic highs, so people are seeing really great cash flow by renting their ADU.

How much does an ADU in Orange County cost?

The ADU cost in Orange County will vary depending on design, options, and size.

As discussed, the most cost-effective version is a garage conversion to an ADU. The major structural components already exist in a garage, but this conversion requires items including constructing the fourth wall (where the garage door is currently), adding interior walls, a kitchen, bathroom, flooring, etc; adding doors and windows, plumbing, electrical, HVAC, insulation, and a new waste line to the sewer lateral.

The garage conversion to ADU cost commonly ranges from $90,000-$120,000 depending on location and the homeowner’s desires. Building an ADU above a garage will be more expensive because the garage needs to be structurally reinforced to support the weight above. Costs to construct a ‘ground-up’ new ADU will vary considerably based on size, the number of stories, location, access, etc, but will often be in the $100,000-$400,000 range.

A good rule of thumb is to assume $300-$400 per square foot – and the bigger the unit, the lower cost per square foot. If you’re considering building a 2-story or second-story ADU, costs will also go up.

What is the price of a prefab ADU?

Prefabricated or modular ADUs have received considerable attention recently. The majority of these homes are produced at a factory, transported to your location, and assembled there. Numerous new companies have sprung up to produce these prefabricated ADUs, which frequently come with multiple floorplans and design options. Some are ultra-luxurious and pricey, while others are designed for budget-conscious buyers.

Prefabricated ADUs have both advantages and disadvantages in comparison to typical ADUs constructed on-site by general contractors. Cost-wise, they may first appear to be less expensive than traditionally constructed ADUs, but it’s crucial for consumers to consider ALL the costs (not just the unit itself), including taxes, shipping, craning, assembly, installation, permits, utility connections, and foundations.

Related: Pre-fab vs. Stick Built ADUs: Which is Better?

How do I pay for an ADU?

There are several ways to finance an accessory dwelling unit project.

Of course, homeowners can pay for it from their own savings, which is most common. They can also finance this project with a home equity line of credit, a construction loan, a cash-out refi, or a home renovation loan which offers a quick processing timeline but does come with a higher interest rate, from a company like Lightstream or SoFi.

If you’d like a deeper analysis, I’ve written about this topic in greater detail in the following article: https://www.greatbuildz.com/blog/adu-financing-guide-los-angeles/

How long does it take to build an Accessory Dwelling Unit?

There are 3 primary stages in the ADU process: plan development, city approvals/permitting, and construction.

The overall timing depends on whether you are doing a garage conversion or building a new ADU. For a garage conversion, expect the entire process to take about 3-6 months, which includes the time to design the plans, time for the city to do the plancheck, and the construction process – which usually takes about 2-3 months.

A new ADU will take longer in construction, so you can expect the entire process to last 6-9 months, with the construction phase taking 3-6 months.

What is the process of building an ADU?

This process starts with a homeowner meeting with one or more general contractors, who will come to your home to discuss the project and give some guidance about the constraints, size, design, estimated costs, etc. The contractor can give you a very rough budget for costs at this point.

Once the owner and contractor decide on the basic plan, they will bring in an architect or plan designer to start the architectural plans. Once the plans are done and approved by the owner, the contractors will prepare accurate, detailed estimates.

Next, the owner will choose their favorite contractor and sign a contract for the work. The architect will submit the plans to the building department for plan check and coordinate this process until a building permit is ready. Finally, construction can start.

Finding The Right Team – How do I hire a good ADU Orange County contractor?

You’ll need to find an architect or designer to create your ADU plans and blueprints. In some cases, your contractor has a relationship with an architect who is capable of creating the plans. In other cases, you’ll need to find your own architect to work with (call GreatBuildz for recommendations). Most importantly, you’ll want to look for an architect that is experienced working in your city. Every municipality is different and you want someone that knows you city’s specific ADU rules and guidelines. A full set of ADU plans should cost you between $7,000 – $15,000, including submittal to the city and approvals.

When you’re looking to build an ADU, it’s important to look for only local, licensed General Contractors. No others are qualified to do this type of major construction and using an unlicensed contractor or handyman could be a big mistake. Only reputable general contractors have the right licensing and insurance to build such a major project.

There are some other criteria you should use in selecting a contractor, not including their price…

Things to look for in an ADU contractor:

• Valid & current contractor’s license:

It’s extremely important to check a contractor’s license on the Contractors State License Board website to confirm it is active, there are no disciplinary actions, and they have Workers’ Compensation insurance (assuming the GC has employees).

• Insurance:

Always get a copy of a contractor’s insurance certificate and make sure it’s not expired. It might be a good idea to call their insurance broker and ask if they’ve had any insurance claims against them. There have been cases where uninsured contractors have ‘photoshopped’ their insurance documents to trick homeowners, so you can never be too careful.

• Check their references:

Ask every contractor for at least three references that you can call. It’s important to call these folks and ask about their experience and satisfaction with the contractor’s quality, schedule, and communication skills. If you can get some pictures of the work, that’s helpful too. Or you can visit a project the contractor recently completed to gauge the quality of the work.

• Read online reviews:

It’s a good idea to do a Google, Yelp, and Social Media search of the contractor to check for any negatives or red flags. Read all reviews you can find about their business, keep an eye out for fishy or fake-sounding reviews, and make sure to address any issues you found with the contractor. I’ve written a detailed article specifically on the topic of hiring an ADU contractor. If you’re currently in the process, take a look at it here: https://www.greatbuildz.com/blog/find-an-adu-contractor-10-tips/

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

When you’re ready to get real contractor estimates for your Orange County ADU or garage conversion project, make sure you start by reviewing and completing this ADU scope checklist.  Having a checklist of the items you want included in your project is a great first step to ensure every contractor you meet has a complete understanding of your project needs and expectations.

 

Once you receive multiple ADU contractor bids, make sure to review them carefully to ensure they are all apples-to-apples.  There is no point choosing the lowest bid if its missing items that you need included. Also, keep in mind, each bid might have different inclusions for the cost of finish materials, so that could skew each bid higher or lower.

 

Feel free to call our free service and our friendly staff will match you with several fully vetted, honest contractors in Orange County, Ventura, LA, or San Diego who are experienced with ADUs. For more info, visit www.greatbuildz.com or call 818.317.3567 today.

ADU Guidelines for Every City in Orange County

• Aliso Viejo ADU Guidelines