Why is it important for investors in San Diego to understand the significant opportunity created by ADUs on multifamily properties? When you drive through many neighborhoods in San Diego, you can see the new additions being built, hear the construction, and practically feel the pride of the property owners who now have additional rental income.
Demand for accessory dwelling units (ADUs) has been steadily increasing since 2017. As soon as the state of California came out with legislation allowing single family zoned homes to have an additional residential dwelling, property owners began adding ADUs to their property.
Now, the allowance for ADUs has been extended to multifamily properties as well. This means that if you own a multifamily property, whether it’s a duplex, four-plex or even a 16-unit commercial apartment building, your property may be eligible for an ADU. This is huge for investors who have multifamily properties, and Ruland Design Group (RDG) has you covered. Imagine being able to add an ADU or two to your property!
Benefits of ADUs for Multifamily Properties
Unsurprisingly, the primary benefit of ADUs for multifamily properties is additional rental income. By adding an accessory unit to your property, you are adding another rentable unit — increasing your monthly rental income and cash flow.
Are you starting to picture it? Seeing the new unit on your property, hearing the new people moving in, feeling the satisfaction when they pay their monthly rent.
There are a variety of ways to add an ADU to a multifamily property, so keep reading to learn whether or not adding an ADU to your multifamily property is right for you.
Can I have an ADU on my multifamily property?
Recent laws and regulations have allowed ADUs to be built on multifamily properties throughout California. However, not every property may be eligible for an ADU. There are many factors to consider when evaluating your multifamily property for an ADU, including:
- Setback requirements
- Easements
- Size requirements
- Floor to Area ratio
- Zoning Density
- Parking requirements
Many of these requirements will be dictated by your local municipality, Every city is enforcing their own rules and regulations on ADUs, which means that it is critical for you, or your professional design team, to be well-acquainted with specific ADU rules and regulations set forth by your local municipality.
At RDG, we regularly work with investors, like yourself that want to increase rental income and increase the value of your property.
How many ADUs can I have on my multifamily property?
The number of ADUs that your multifamily property can have will largely depend on the characteristics of your property. The most important thing you need to consider are the ADU requirements enforced by your local municipality.
Keep reading to understand what you need to know at the state level.
Detached ADUs
According to Assembly Bill 68, the state of California allows up to two detached ADUs on multifamily properties. Be aware that this does not mean that every multifamily property can have two detached ADUs. As mentioned earlier, the number of detached ADUs allowed will be highly contingent upon the ADU requirements set forth by your local municipality.
Factors such as floor area ratio, setback requirements, and easements are the biggest obstacles we’ve run into when determining the feasibility of an ADU.
You want to work with a professional design team who is familiar with these challenges to determine the feasibility of making your ADU a reality.
Conversion of non-habitable spaces into ADUs
In addition, starting in 2020, the state of California has allowed ADUs to be created on multifamily properties from non-habitable spaces including:
- Garages
- Laundry rooms
- Storage rooms
This new law has been a game changer for many of our investor clients who own properties that don’t have enough space for a new detached ADU.
The 25% Rule
The state law allows up to 25% of the number of existing units to be created into ADUs from non-habitable space. What does this mean?
Let’s say you have a fourplex with garages that you’d like to convert. The state law will likely allow you to convert 25% of 4 units which equals one ADU from the garages.
Now let’s take a look at a slightly different scenario where the 25% rule does not equate to a whole number. For a 6-unit property, the 25% allowance equals 1.5. This means that you’re still only likely to build one ADU as we have not seen local jurisdictions rounding this number up to allow for more ADUs.
RDG has helped many of our investor clients maximize the potential for their multifamily properties. From duplexes to 30-unit apartment complexes, we’ve worked with properties of all sizes. Whether it’s converting attached garages into profitable ADUs, or creating a detached ADU — in an unused space on the lot, we are experts at identifying the most profitable means to create an ADU for your multifamily property.
The importance of local municipalities on ADUs
The information that we’re presenting is based off of publicly available resources and includes ADU laws set forth by the state of California. Although these new laws have made many multifamily properties eligible for an ADU throughout the state, it is not a guarantee that your specific property can have one.
We cannot stress the importance of local municipalities enough. Since ADU regulations differ between municipalities, it is highly important for property owners to conduct due diligence in knowing the rules and requirements set forth by their specific jurisdiction.
Knowing the feasibility for your project before getting started will be crucial in helping to avoid costly mistakes down the road. We also know that as a property investor, your time is valuable.
Ruland Design Group (RDG) has worked with many multifamily investors in realizing the maximum potential for their properties through the addition of ADUs. Our experience means we can help you avoid costly mistakes and wasted time.
RDG’s in-house design process is streamlined to cater to the needs of investors so you can see your designs completed and hear the approval of permits being processed as quickly as possible. By now, you can imagine the pride you’ll feel, knowing you didn’t let this opportunity slip by.
The RDG Difference
RDG has designed over 100 ADUs throughout the San Diego area. We’ve worked with local municipalities throughout the county including:
- City of San Diego
- County of San Diego
- La Mesa
- El Cajon
- National City
- Chula Vista
- Coronado
- Encinitas
- Poway
- Carlsbad.
- And others
Our dedicated team is interfacing with local building departments on a day-to-day basis, always with the goal of creating the best designs for your goals, while staying cost-effective. We want you to see your return on investment as quickly as possible.
If you’re interested in maximizing your property’s rental income, contact us today.
Our dedicated staff is happy to help you assess the feasibility for your ADU project and identify the potential to increase cash flow for your multifamily property. ADU laws and regulations are constantly evolving. Take advantage of the opportunity and maximize your rental income today with ADUs.