Prefab ADUs in Los Angeles

Margie Coats in front of her home in the Clairemont neighborhood of San Diego.

Definition of Prefab ADUs

When it comes to building an ADU — an accessory dwelling unit — you have two options: prefabricated (prefab) or stick-built.

A prefab ADU is a home that is built off site in a climate controlled environment and then placed or assembled in your backyard, or any final destination.

A stick-built ADU is built on site, with all of the construction happening in your backyard from start to finish.

Growing popularity of prefab ADUs in Los Angeles

Prefab ADUs started to gain in popularity in Los Angeles in 2017, after the state of California began passing laws making it easier for homeowners to build ADUs on their property.

The state of California hopes to encourage homeowners to add ADUs to their properties in order to increase population density in the Los Angeles area.

Advantages of Prefab ADUs in Los Angeles

Not only does adding an ADU to your property create flexible living space to your home, there’s also a number of other benefits, like additional income, sustainability, helping with the housing shortage, and increased property value.

Income potential

Adding an ADU to your backyard or property in Los Angeles can potentially generate $2000+ in passive rental income, depending on the average rental prices in your neighborhood.

Your local planning agency may have rules on whether or not you can rent your ADU as a short term rental (less than 30 days) or long term rental. For short term rentals you can expect to pay additional taxes, registrations, and limits to the number of days per year your ADU can be rented.

Sustainability and energy efficiency

Prefab ADUs are the more sustainable and energy efficient solution compared to stick-built ADUs. There’s less energy used during construction and waste is minimized by having predetermined designs.

Housing shortage solution

The Los Angeles housing crisis makes it difficult for many to find affordable housing in the area. Prefab ADUs can increase housing density in existing neighborhoods and provide a more attainable rental option for people due to their smaller size.

This is also a great solution for older generations that might own their home but would be potentially priced out of the market after selling due to a lack of inventory for smaller, affordably priced homes. Many families are opting to move younger generations into the main home and buying a prefab ADU for their parents to age in place in the backyard.

Increased property value

Prefab ADUs in Los Angeles that are built to the HCD standards — or the California Department of Housing and Community Development standards — appreciate over time, meaning they can add value to your property.

However, not all prefab ADUs are built to the HCD standards, which are the same standards primary stick-built homes are built to. If a prefab ADU is not built to the HCD standard, but is instead built to the HUD standard, they are essentially personal property and will depreciate in value over time.

All Abodu ADUs are built to the HCD standard and will appreciate in value.

Zoning and Regulations for Prefab ADUs in Los Angeles

Every city and county will have specific zoning laws and regulations for ADUs, here are the specifics for Los Angeles.

Overview of Los Angeles zoning laws and regulations

Prefab ADUs are permitted in Los Angeles county when the property is zoned for single-family residence or multi-family residence. An ADU must exist on a property that has a single-family residence or multi-family residence already, or that is being built concurrently with the ADU.

Depending on the type of prefab ADU — attached or detached — there are specific requirements for the size, setback, height and other factors. The Los Angeles county planning department details ADU requirements in depth in the ADU ordinance summary.

Recent changes in ADU regulations in Los Angeles 

The most recent changes to the ADU laws in Los Angeles include changes to height restrictions, the 60 day rule, setback definitions and making it easier to build an ADU for multi-family housing projects.

Understanding the size and design requirements

The size and design requirements for an ADU depend on what type of ADU you’re building. All prefab ADUs are, by their nature, detached ADUs.

For newly constructed detached prefab ADUs, the size maximum in Los Angeles county is 1200 sq. ft. There are also specific height requirements that depend on the design plan, but are not to exceed 25 feet.

For more detailed design requirements or to see requirements for other types of ADUs, refer to the Los Angeles ADU ordinance summary.

Parking and setback considerations

The parking and setback for newly built prefab ADUs require that there is at least 6 feet building separation between the front of the ADU and other structures, and 4 feet separation at the side and rear.

There are also a number of specific parking considerations for newly built prefab ADUs, which can be found in the Los Angeles ADU ordinance summary.

Permitting process and fees

 The permitting process for a prefab ADU in Los Angeles is a 5 step process, which you can find in detail from Los Angeles county planning.

  1. Getting started: determine if your property is in an unincorporated area and if an ADU is allowed on your property.

  2. Design and planning approval: Get in touch with your local permitting office and submit a base application with your prefab designs. The plans will be reviewed within 60 days and once it’s been approved you can apply for a building permit within 2 years.

  3. Financing: You can check to see if the CalHFA ADU grant program is open for applications, and work with organizations to help you with affordable lending options. If you choose an Abodu ADU, we offer financing options through our lending partners, which means you’ll get the luxury of a one-stop-shop for adding an ADU to your property.

  4. Building and Safety Permitting: Submit your plans for approval, and once you’ve received a building permit you can request inspections and receive your certificate of occupancy.

Renting the ADU: Understand the laws and ordinances that apply for renting your ADU, including Rent Stabilization Ordinance, Fair Housing resources and more.

Finding the Right Prefab ADU Provider in Los Angeles

Before beginning your search for the right prefab ADU provider in Los Angeles, it’s important to know some basics to start out on the right path.

Researching and comparing prefab ADU providers

Not all prefab ADU builders are made the same. Here are some things to consider when researching a prefab ADU builder:

  • How long have they been in business and how many units have they built and placed successfully?

  • Does their team have experience working with the public sector and municipalities?

  • Does the company have a deep understanding of ADU laws and building codes?

  • Will they help you navigate the permitting and building process or will you be on your own to manage it?

  • Is the pricing they’re displaying transparent and include all of the necessary costs (like grading and craning)?

Evaluating quality, reputation and experience

When looking into the quality of the prefab ADUs a company builds and the reputation a company has, consider who was behind the design of the ADUs.

Did a well-known architect or designer develop the ADU plans? Are they savvy in designing highly functional and livable small spaces? What is their design aesthetic and will it fit your preferences?

It’s also important to know just how many ADUs a company has successfully placed — it’s one thing to design a prefab ADU, it’s another to successfully work with local municipalities, homeowners, and contractors to get an ADU built in someone's backyard.

Lastly, it’s important to get a sense of how the company treats you from day one. Will the employees be a partner to you during the process or will you be managing the entire project on your own? If you don’t have experience managing the permitting and construction process, you might want to opt for a company that is more hands on to guide you, because small mistakes in your permit applications can cost you precious time and money.

Reviewing available floor plans and customization options

Next up, you’ll need to decide if the available floor plans and customization options are what you’re looking for in your new prefab ADU. Some prefab ADU providers are really good at building studio ADUs but lack the depth of expertise to maximize a two bedroom ADU within the size limits required.

It’s one thing to build a small ADU with two bedrooms, it’s another to build a highly-functional and livable ADU within a small package — the details matter when it comes to livability in small packages.

Additionally, some prefab ADUs have a lot of customization options, whereas others are designed so well you don’t have to think about a thing when choosing a design.

Budget considerations

Your budget is usually the most important piece when determining what prefab ADU builder to go with. Keep in mind when you’re browsing builder sites that some companies don’t offer transparent pricing, and while a price might look good online, it might not include all the other necessary work like grading and craning.

Below are extra ADU costs you need to keep in mind when budgeting for your prefab ADU:

  • The actual ADU

  • Delivery and craning fees

  • Site work

  • Foundation work

  • Utility connections and trenching

  • Permitting fees and taxes

  • Any upgrades and customizations, like ramps and decks

  • Demolition or landscaping work

Financing and Incentives for Prefab ADUs in Los Angeles

Regardless of your financial situation, there are a lot of financing options for ADUs in Los Angeles — meaning you don’t have to pay cash to build an ADU on your property.

Financing options for prefab ADUs

There are a number of ways to finance your ADU, but the most popular options are:

  • Cash out refinance

  • HELOC — home equity line of credit

  • Construction loan

  • No payment equity loan

  • HECM — home equity conversion mortgage, or a reverse mortgage for seniors 62 years or older

Incentives and grants available in Los Angeles

The California Housing Finance Agency, or CalHFA grant program provided up to $40,000 towards the pre-development and non-recurring closing costs for the construction of ADUs.

Continue to check the program website to see when and if another round of grants will be provided.

Tax benefits and cost-saving measures

There are a number of tax benefits for building an ADU in Los Angeles, though it’s important to consult a tax professional about your specific situation, as tax regulations can change and vary depending on your location.

Some areas offer tax exemptions and incentives for ADUs, including a reduction in property tax assessments.

You could also be eligible for federal or state tax credits if you build with energy-efficient products. These credits can offset the cost associated with adding energy-efficient systems like solar power or windows, while saving you money on your energy bill.

Get your Los Angeles ADU Underway with Abodu

If you’re ready to begin your prefab ADU project, look no further than Abodu. We have four prefab units ranging from a studio to two bedroom units, and all have been designed by world-renowned architects with a Scandinavian style.

We’ve successfully installed hundreds of Abodu ADUs, and our white glove service and project management sets us apart from other prefab ADU companies.

From the start of your project to getting the keys to your new Abodu, you’ll have a dedicated project manager that will handle the entire process. Plus we offer in-house financing options through our partners — Abodu is truly a one-stop-shop for your dream ADU.

Get started today by contacting us or booking a tour at one of our showrooms.

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