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September 07, 2021
What Are the Best Cities to Install an ADU?
Abodu
Abodu Team
ADU, BACKYARD HOME
ADUs can bring value to your home by boosting its worth or adding more space without sacrificing privacy. 2021 has brought many changes to how we work, go to school, and even how quickly homeowners can get their hands on permits to build ADUs of their own. Learn more about the benefits of ADUs, new funding laws, and the best cities for ADU construction.\
What Is an ADU?
An accessory dwelling unit, or ADU, is also known as a “granny flat” or “backyard home.” These structures serve as secondary properties equipped with full kitchens and baths on the same property as a traditional single-family home. These smaller, independent residential dwellings can get pretty pricey, which is why it’s important to do your research before building one on your own and before you decide to work with an ADU builder.
2021 Funding Laws That Have Made ADUs More Accessible
California Health and Safety Code (HSC), Section 65583(c)(7) requires cities and counties throughout the state to instate plans to incentivize the construction of ADUs to be listed at affordable rent prices for very low to moderate-income households. In addition, the California Department of Housing and Community Development provides a list of available grants throughout the state providing financial incentives for constructing ADUs on their property.
Additional Information about ADU Production in California
Below are findings from ADU owner and city planner surveys and analysis from the California Department of Housing and Community Development’s Annual Progress Report (Apr) data.
Key findings on ADU production:
-- Between 2018 and 2020, California jurisdiction permitted 33,881 ADUs, adding 22,695 ADUs to the state’s housing supply
-- ADUs are sprouting up in diverse, transit-accessible neighborhoods where most homeowners recently purchased their homes and are still paying a mortgage
-- 53% of ADUs built in California are detached units
The Best Cities to Install an ADU
Across the state, you’ll encounter a variety of ADU laws and legislation impacting their respective jurisdictions. Among the best cities to build an ADU are:
San Jose
There is an express review service every Tuesday, where homeowners can meet with city staff to go over a comprehensive review of their ADU application
Los Angeles

The LA ADU Accelerator Program pairs older adults with homeowners who have ADUs and are willing to offer stable housing. In exchange, homeowners receive qualified tenant referrals, tenant case management, and stable rental payments.

Oakland
Oakland’s ADU initiative is expanding the availability of housing that is affordable to tenants, reduce displacement risk for lower-income homeowners, and reduce racial disparities related to ADUs
Redwood City
Redwood City council voted on March 22, 2021 to exempt ADU’s floor area ratio and lot coverage maximum requirements
Tustin
There are no minimum lot requirements to build an ADU in Tustin
Palo Alto
Unlike some other cities, the homeowner does not have to live on the property the ADU is built on
Millbrae
ADUs less than 750 square feet are exempt from Development Impact Fees
Cupertino
You do not have to pay park, storm drain, and school impact fees if the ADU is less than 750 square feet
Recommendations to Foster Meaningful ADU production in California
While California is on the right track to facilitating meaningful ADU production, the steps below could also help best serve its communities.
Explore areas for future State Legislation, such as CalHFA taking the lead on working with banks and credit unions to provide more appropriate loans for homeowners without high home equity Build awareness and educate homeowners about the opportunity to build ADUs
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