ADU Myths Explained

In recent years, ADUs have been gaining a lot of attention in California. This, of course, comes with a degree of skepticism and pushback.

Below I’ve linked a helpful article from ADU Educator Maxable which debunks some of the most frequently referenced ADU “problems”. It’ll help you navigate rumors vs. reality when it comes to ADU concerns.

The Advantages of Factory Built Prefab ADUs

Prefabricated ADUs, which are built off-site and in advance, are gaining popularity in California. For many, opting for a prefab unit has significant advantages over building from the ground up. While stick-built ADUs are often more customizable, prefabricated options are less pricey, quicker, and more convenient for the same quality of work.

Here’s an interesting post from San Francisco-based ADU company Habitat ADU. It outlines some of the reasons why factory built homes are gaining popularity: climate-controlled construction, faster build time, consistent standards, and proven expertise.

ADUs are More Affordable Than Ever Before

As I’ve summarized on this page, California rolled out statewide legislation changes that loosened restrictions on building ADUs, expanded the type and number of ADUs homeowners can add to their properties, and lowered the fees associated with building as of January 1st, 2020. This means it’s never been easier or more affordable to build an ADU on your property. Below, I’ve provided more detail on the reduced fees, updated financing options, tax deductions, and energy-saving options you can expect when embarking on an ADU project in under today’s conditions.

2020 Reductions in Fees and Regulation

Regulation changes are working in favor of homeowners who are looking to add a detached ADU to their property. A particularly impactful change has been the reduction of parking restrictions. As of January 2020, as long as you live within a half-mile of public transit, one block from a public car-share program, or if your home is on a street that offers on-street parking permits, you are no longer required to add an additional parking spot for your ADU! This enables many homeowners who were previously barred from building an ADU to move forward. It also effectively reduces construction costs because you are no longer required to build a car port, garage, driveway extension, etc. to create more parking on your property;

Beyond this, the new bill eliminated the associated impact fees for any ADU smaller than 750 square feet. In the past, these fees could cost those looking to build an ADU up to $50,000.

Favorable Conditions, New Financing Options, and Tax Deductions

This year’s low interest and mortgage rates make it the perfect time to build your ADU in a cost-effective way. Further, the passing of the aforementioned bill has spurred the development of new financing options. In June, the Silicon Valley Housing Trust launched an ADU loan program for homebuilders in the South Bay. Fannie Mae has also recently enabled more lending against ADUs, making the project much more feasible for many.

If you plan on renting out your ADU, you’ll be happy to learn that you can deduct a portion of your ADU’s fire insurance bills, HOA fees and mortgage interest! In other good news regarding the effect of your new ADU on your taxes, your ADU also won’t trigger Prop 13 and will instead result in a blended assessment of your property.

Energy Efficient and Solar-Ready Options

Some California-based ADU companies are making their units even more affordable (and greener) by making them more energy-efficient. Turn-key ADU provider Habitat controls electrical costs by connecting their ADUs to your existing electrical service through either the main panel or a separate panel on the outside of the house. They’ve paid attention to every detail in order to keep their customers’ monthly electrical bills at a minimum; making sure their units come standard with energy-efficient LED lights and low-flow faucets. Every ADU also comes solar-ready, meaning you can easily switch to solar power and save even more money and in long-run.

Prefab vs. Stick Build ADUs

Prefabricated homes are gaining popularity in the United States for a multitude of reasons. The process of building a home off-site and having it installed on your property provides a much more controlled, timely, and often less expensive alternative to a stick build project. Furthermore, new prefab ADU options are appearing which are more customizable, high-quality, and accessible than ever before.

Below, I’ve outlined the pros and cons of choosing a pre-fab ADU vs. a traditional stick build for easy comparison:

Pre-fabricated ADU

Fixed Costs

High Level of Flexibility 

No Architect or Engineering Fees

Offsite Build

$199–420 / sq ft

2-4 Week Onsite Install 

No Weather Delays

Fixed Timeline

Stick Build ADU

Variable Costs 

Complete Flexibility

Varied Architect and Engineering Fees

Onsite Build

$700–900 / sq ft

6-12 Months of Onsite Construction

Weather Delays 

Variable Timeline

Why is building a prefab ADU more convenient?

Building off-site comes with major advantages. Having your home feel like a construction zone can be unpleasant, and most would prefer to minimize the amount of time spent with strangers doing disruptive work in their yard. When your ADU is delivered to your property entirely constructed, there is minimal intrusive, loud on-site work to be done.

Unpredictable factors such as weather delays can extend the build phase of a stick-build ADU project. Prefab options are able to control for this, as your ADU is constructed indoors. This allows for you to accurately forecast how long your project will take and makes the process as short and painless as possible.

Why are prefab options so much more cost-effective?

Normally, applying for permits, managing contractors and subcontractors, and finding interior and exterior finishes are all slow, complicated processes that allow for different parties to up-charge at every step of the way. Opting for a prefabricated home over a stick build allows you to dodge excess costs such as architecture and engineering fees. It also cuts down the time investment for you.

For example, San Francisco-based prefab ADU company Habitat offers all inclusive pricing for its 11 different models. They wrap everything – site evaluation, permit package creation and submission, construction, site work (foundation, trenching, utility connections, etc.), interior and exterior finishes, fixtures, and appliances – into one fixed cost. Not only does this give you full transparency around cost and timeline, but it minimizes them both.

Want to see if your property is eligible for a pre-fab ADU? Habitat‘s two-minute assessment is a great place to start.
Take this two-minute assessment to get started.