Go-To Source for ADUs

Here is your local, Go-to Source for ADUs. 
A one-stop source about ADU's, granny flats, backyard cottages, in-law units, accessory dwelling units…

(So...what's an ADU? An Accessory Dwelling Unit.) I also like: Alternative Dwelling Unit.

But, especially good is Martin John Brown's article: Appraisal Journal on ADUs, making the point that appraisals of ADUs have lagged far behind the touted trend, continuing to depend on property comparisons rather than income-based assessments. Income-based appraisals spell out what a good return rate on investment ADUs make.

Now, why do people in the industry think ADUs are a headache: too hard to deal with, or even illegal?
Besides those folks in the industry repeating things they have heard but not proven, and those wanting to make transactions easy as possible...(laziness, in other words, or, to be more generous: lack of structures to deal with the unusual) it also originates from those sellers who end up disappointed when their hand-built basement flat fails to enhance their selling price.

Jeff's house at Tiny House Design
Well Done. Lovely ADU.

There are a million and one ways to build against code, and real estate brokers and appraisers have seen them all. But one of the most common is attempting to build a space that can be "legally" separately occupied. Let's say a homeowner has built in the hot water heater closet within a bedroom (this was true of the first house I bought), creating a potential explosion hazard. Who knew it has to have a separate entrance? The weekend builder didn't know, but a professional would have.

Despite good intentions, jerry-rigged spaces can end up having no closets in the bedrooms, no separate, lockable entry, a multitude of seemingly "it'll be good enough" problems that end up deflating the value  and livability of an ADU. Mostly because the space is not clearly thought out as to its potential long range uses, and because it ends up as an irritating (or nightmarish) code violation when the property changes hands. It's not that ADUs are a bad idea; it's badly executed ADUs that are the problem.

Countless properties have pulled off an ADU successfully. But what sticks in the memory of experience of appraisers and brokers are those that became a drag to negotiate during a sale. And it is street-level prejudice, like stereotypes, that can take the longest time to dissolve.

ADUs have been making the rounds in cutting edge living magazines for decades as the "latest new idea," but they still haven't made it to the grown-ups table at Thanksgiving. I predict this is about to change, and gain momentum with speed. There is a perfect storm of several components making ADUs necessary now:

• general hip coolness of living super small among "Millenials" - it's trendy but it shouldn't be underestimated how powerful this movement is and how its influence will grow
• current recession and economic tightness, school loan debt of same
• aging population, and greater numbers of the Woodstock Generation without own homes
• lack of affordable housing within metropolitan areas
• for those with smaller family size and larger property: an interest in maximizing income generation with one's own assets
• a recognition that maximal spaces require maximal resources, time, and effort to maintain/a desire for smaller, compact living that emphasizes experience over acquisition

In a way, the single worst thing to happen to stymie ADUs as an everyday solution (imagine they are an alternative that we take for granted, whose support is a given among the industry, and the strategies for making them happen with ease are already in place) would be for the economy to dramatically recover and begin booming, and soon. Because whenever that has occurred, society has forgotten the reasons that made ADUs attractive in the first place, when space becomes cheap and "living large" cycles back into trend.

The economy is probably not going to switch direction overnight, which means ADUs are on track to make the transition from intriguing trend to common alternative. Gradually, the botched jobs will get fixed, and the real estate industry will become well practiced in appraising, listing, and selling ADUs.