LOS ANGELES—For Sam Andreano, rental income from a detached accessory dwelling unit (ADU) in his backyard initially helped offset mortgage payments, and later, it provided a place for his son to live.

“[I] started out as just a regular homeowner,” said Andreano, a resident of Dana Point, in Orange County, who began converting his detached garage into an ADU in 2019.

Researching and permitting took a few months, and the total build time was about eight months. He financed it with cash and a refinance. The entire investment, including all labor, materials, and city and associated fees, came to $165,000, and he rented the one-bedroom unit for $2,500 a month.

Now he’s working on a two-story ADU project that he intends to sell as a fourplex.

Amid soaring home prices and a housing crisis—which California leads, by some estimates, with a deficit of more than 1 million homes—accessory dwelling units (ADUs) now represent a significant and steadily increasing supply of overall housing construction in the Golden State.

A descendant of the post-War “granny flats” or “dowager cottages” intended to house aging relatives, contemporary ADUs are usually predestined for the rental market. Most are modest studios or one-bedroom units that can be built at a fraction of the cost of a traditional home but still command market-rate rents.

California issued 30,231 permits for ADUs in 2024, representing 26 percent of all new housing construction, according to statistics provided by the Department of Housing and Community Development.

While the rate of increase has fluctuated, data over the past decade show a consistent year-over-year climb. After plateauing in 2019 and 2020 at fewer than 13,000 units, the number jumped to more than 20,000 in 2021, a more than 60 percent increase.

This is largely because of a series of liberalizing state laws that have, over the past eight years, made it much easier for property owners to get projects approved in residential areas originally zoned for single-family homes.

To proponents, the boom is a bulwark against a worsening affordable housing crisis, even a corrective measure to decades of exclusionary zoning.

To critics, it overburdens infrastructure, threatens property values, degrades aesthetics, and represents an unprecedented loss of community control over residents’ quality of life.

ADUs Versus Traditional Housing

ADU construction has grown consistently because it is not tied to state subsidies the way larger developments are, according to Celeste Goyer, vice president of research and operations for the nonprofit Casita Coalition, which advocates for affordable housing in California.

“Even in times when the state budget is tight and the subsidies may be reduced, ADU production keeps ticking on,“ she said. ”They kept growing during the pandemic, even when construction costs were high and interest rates were high, because ADUs use the existing land—they allow you to work with what you’ve got.”

Advocates of ADU liberalization say the dwellings are part of a broader strategy to confront the state’s affordable housing crisis, which is exacerbated by high construction costs, regulatory barriers, and zoning restrictions.

“ADUs are not intended to replace traditional subsidized affordable housing for renting,” Goyer said. “There’s still a lot of multifamily housing properties being built, and that’s where deed-restricted affordable housing for rentals is being produced.”

She points to studies showing that ADUs are more affordable to low- and moderate-income tenants, typically renting for “much less—often half as much—as a standard single home.”

“Sixteen percent are rented to someone“ whom the owner knows ”at low or no cost—that’s incredibly important housing,” Goyer said, calling ADUs a grassroots approach to housing family members and elders priced out of assisted living.

According to a 2021 study from the University of California–Berkeley, 51 percent of California’s new ADUs are income-generating rental units, while “very few”—15 percent—house senior citizens. About 11 percent of new ADUs provide housing for school-aged children.

‘A Neat Little House’

At a fraction of the cost of a traditional home, unburdened by land costs, and relatively easy to approve, ADUs are attractive for both homeowners and emerging, small-scale developers.

Dennis Robinson, a resident of Anaheim, built his first ADU in 2020, on a personal rental property.

“Then a neighbor saw what was going on,” he said. “They saw that it was just a neat little house in the backyard.”

They asked him to build one for them, which led to requests from friends and family. Within eight months, he was building full-time. So far, he’s done 60.

“Getting two ADUs, or even three, is fairly simple now across most single-family-zoned houses,” he said.

This is because of SB9, enacted in 2021, which allows up to four dwellings on almost any lot zoned for a single-family residence. In 2024, SB1211 increased the number of detached ADUs allowed on lots with multi-family structures to eight.

Typically, it takes Robinson 30 to 60 days to submit a project for approval, and construction is completed within a year.

“Homeowners generally do not need to live there,” Robinson said.

But in the state’s patchwork of local ordinances, homeowners can run into other obstacles.

When Wesley Yu, a resident of East Palo Alto, sought to build a new home and a detached ADU to house extended family, the city approved splitting the lot under SB9. However, because he was building two new structures, it refused to approve the permit unless he made one an “affordable” rental or paid a one-time fee of more than $50,000.

Yu recently sued the city in federal court, drawing on a previous Supreme Court ruling. How that case is decided, and whether the issue is taken up by the nation’s highest court, could have broader effects on the state’s many jurisdictions—more than 170, according to some counts—with inclusionary zoning ordinances.

Zoning and Density

After years of debate over zoning and density, California’s recent ADU legalizations have effectively mandated the change by overriding existing local laws, requiring cities and counties to approve projects ministerially, without a discretionary review process.

According to a 2024 California Zoning Atlas Report from UC–Berkeley, 95.8 percent of all residential land is zoned as single-family-only, “severely constraining the spatial possibilities for denser and more affordable housing.” The figure is lower when unincorporated areas are removed, about 82 percent.

The study concludes that the effects are racially exclusive: Areas with more restrictive zoning have fewer non-white residents.

Areas with restrictive zoning also typically have higher land and property values, higher production costs, and lower development rates. A 2025 study from the George W. Bush Institute notes the impact on affordability: “Highly restrictive policies have outsized effects on supply and prices in the lower-tier segment of the market. This is partly because the direct effects of cost-increasing rules are larger in percentage terms when homes are relatively small and inexpensive. It’s also because overly restrictive rules undermine or reverse the filtering-down process that accounts for most housing affordable to lower-income families.”

The same study ranks the top 100 largest metro areas in the United States from the “most pro-growth” down to the “most restrictive.” Nine California cities—including San Francisco, Sacramento, and San Diego—feature in the bottom 15.

Along with other states, including Oregon, California has in recent years doubled down on corrective policies meant to increase affordability, in large part by increasing density.

But eliminating single-family zoning citywide in places such as Minneapolis, California cities, and Portland, Oregon, the study notes, has not produced substantial positive results.

For example, Minneapolis eliminated single-family zoning but added only 23 “plexes,” or small multi-family units, in the first two years, and other trends suggested that “reform allowing multifamily development in commercial areas has been far more effective than permitting complexes in formerly single-family neighborhoods.”

Portland fully eliminated single-family zoning and legalized ADUs everywhere in the city. However, that, plus other reforms, added only about 0.6 percent to housing stock between 2021 and 2024, according to the study.

Meanwhile, some municipalities are reconsidering wholesale liberalization.

In San Diego, where ADU production has exploded in recent years, the city council last month voted to cap the number of units allowed on single family lots. The change doesn’t apply retroactively, however, and a community group is suing over a 136-unit ADU mega project.

The lawsuit challenges the city’s “broad pattern and practice” of processing all projects ministerially under its ADU Density Bonus Program, which it claims developers have taken advantage of to build large-scale complexes on single-family lots without environmental review.

‘It’s Not About Solving a Housing Crisis’

Mike Griffiths, a former City Council member in Torrance, California, said the ADU boom crept up on him and other local leaders as the state began passing a slew of bills, and the city was forced to modify its laws and ordinances to accommodate them.

“It started off kind of innocently with just, ‘well, one or two little ADUs and your neighbor’s not going to hurt anything,’” Griffiths said. “But every year they kept modifying the laws and making it more challenging for us as a city, impacting us more negatively.”

He cited the fact that there can now be multiple ADUs on a single-family lot, setbacks can be reduced, neighbors can be stacked closer together, and there are no restrictions on the number of units allowed in a particular neighborhood.

ADUs tend to be built in neighborhoods with medium to high incomes and home prices, but not in the wealthiest neighborhoods. So although the policy is one-size-fits-all, the effects may be uneven. Increased density, overburdened infrastructure, and other changes are likely to be concentrated in middle-class neighborhoods.

“There’s all this crazy justification for what they’re trying to do, and none of it makes sense. The proliferation of ADUs has skyrocketed. ... Now there’s not a day that goes by [when] there’s not a flyer on my doorstep saying, ‘Hey, build an ADU! Make lots of money! And it’s greed. It’s not about solving a housing crisis,” Griffiths said.

“If you go back to why you bought your house, where you did, you realize, ‘I wanted to buy a house in a low-density neighborhood,’ but all of a sudden you throw the greed factor in and [you] say: ‘Whoa, I can make $2,500 to put a little cracker box in the back of my yard. That sounds pretty attractive.’”

No one in Sacramento, he said, is paying attention to potential effects on local communities, or the fact that ADUs are not moving the needle on affordability.

“Our neighborhoods were planned and designed, in many cases, a long time ago, and the infrastructure wasn’t built to support the density that these laws now allow,” Griffiths said.

By infrastructure, he means water, sewer, power, emergency response, and schools.

“They put that burden solely on the cities to pay for these things.”

The fact that carports and parking spaces can now be converted to ADUs without replacing parking, he said, is part of an unrealistic assumption, behind the broader push for density, that people are simply going to stop using cars.

The fact that the state was able to override local control of zoning and housing is a violation of California’s constitution, especially in charter cities such as Torrance, Griffiths said.

“It’s very clearly defined: Charter cities especially are supposed to have full control of their land use and zoning,” he said.

“And now the state has overridden that by saying that housing is an emergency? Well, who decided that? And how does that allow them to override the state constitution?”

If the state wants an ADU boom, he said, it should at least compensate cities for the burden on infrastructure.

Ideological Roots

In recent years, sociological critique of conventional, low-density zoning in urban and suburban areas has gained traction, influencing the housing discourse and legislative landscape in places such as California.

A 2020 study titled “It’s Time to End Single Family Zoning,” in the Journal of the American Planning Association, makes the case for abolishing the “privileging” of single-family homes, or R1 zoning.

“R1 was born from, and codifies, base and tribal instincts: a desire to set privileged in-groups apart and keep feared or desired outgroups at bay,” the study states.

“Its history is explicitly classist and deeply interwoven with racism, and its present form only barely conceals these origins. It should have no future. Planners should actively work to end it.”

The report claims that single-family-only zoning continues to exclude people from access to opportunity and in expensive areas exacerbates housing shortages, “benefitting homeowners at the expense of renters and forcing many housing consumers to spend more on housing.”

Katherine Peoples, founder of HPP Cares, a HUD-approved housing counseling agency, said that despite legalization, there is still resistance in many places.

“There are some higher-net-wealth areas [where] we do see a lot of pushback, because they feel that if you allow ADUs in, you’re allowing people who don’t belong to the community,” she said.

“Unfortunately, there are a lot of people who find that it will be congestive to their neighborhood, it'll bring down their property values, because ultimately, you’re renting the space to maybe someone who doesn’t look or feel the part.”

How Affordable Are ADUs?

The 2021 UC–Berkeley survey of ADU owners reported a median rental price of $2,000 in California.

In the San Francisco Bay Area, which had both the highest total rents and rental cost per square foot, and the Central Coast region, ADU prices were affordable—that is, less than 30 percent of a household income—to a two-person household making the area median income. In Los Angeles County, only about 31 percent of ADUs were affordable by that definition.

A 2024 Brookings Institution analysis found that new ADUs developed without subsidies were likely to have rents affordable to households earning median income in the Los Angeles region. But affordability for low-income households (earning 50 percent to 80 percent of the area median income) would require substantial subsidies.

But in a related study, Brookings argues that expanding the housing stock with ADUs should reduce upward pressure on housing costs—for example, even if ADUs are used as short-term rentals, that would free up primary homes for owner-occupants, or long-term rentals.

Currently, there is no restriction on ADU rental prices.

Proponents offer a vision of functionality, affordability, and diversity that comes with higher density, but critics question whether ADU proliferation is degrading standards; renters may be paying market rate for a smaller unit with no land and no parking.

“I understand there’s a housing crisis. There’s no requirement in these ADU laws that they be so-called ‘affordable,’” Griffiths said.

“They’re going at market rate, and maybe because they’re smaller that might be somehow more affordable. But the price per square foot is certainly not.”

At an average of 615 square feet, ADU units are smaller than a typical apartment in California, which is about 854 square feet, according to a market analysis by RentCafe.

The UC–Berkeley survey found that 61 percent of new ADUs contain one bedroom.

The Brookings study concludes that making new ADUs affordable to even moderate-income tenants “runs into a basic math problem.”

Income-restricted units wouldn’t generate enough rental revenue to cover the financing and operating costs invested in building, so homeowners would require a “substantial subsidy to make developing ADUs feasible in the first place.”

Proponents often argue that a continued ADU boom will naturally ease prices—the more units available, the lower rental prices are likely to be.

Griffiths said he is concerned about the ultimate cost. His neighbors are currently converting their two-car garage into a two-bedroom, 700-square-foot ADU.

“This is a landlord who doesn’t even live on the property,” he said. “They’re just doing it purely to maximize profit.”