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Homeowners look to add another source of income through ADUs

Posted at 10:39 AM, Oct 24, 2022
and last updated 2022-10-24 14:58:23-04

It’s getting more expensive to live on the Central Coast, prompting some homeowners to maximize the use of their property - creating another source of income.

In this Price of Paradise segment, we take a closer look at accessory dwelling units - also known as ADUs - and how you may soon see more of these popping up in your neighborhood.

Take a look at some trends in recent years.

The City of Santa Barbara has seen a steady rise of ADUs being built since 2019. The numbers taper off a bit this year. According to the city planner, this could be due to a combination of factors - from supply costs, limited labor and other post-pandemic issues.

In Santa Maria, there has also been a steady increase in ADU permit applications since 2018. Over the last five years, more than 1000 permits were issued for ADUs. Last year alone, nearly 400 permits were issued and already this year - 300 have been issued. City leaders say - Santa Maria is on pace to meet or exceed last year’s total.

In San Luis Obispo, the number is staying pretty consistent. The city is averaging 70 permits per year over the past three years.

Paso Robles is also seeing an increase. Last year, the city pulled 26 permits for accessory dwelling units. So far this year - they have about 16 permitted - with more in the works - the city anticipates passing last year's total.

City leaders say the permitting process is becoming easier for homeowners, largely due to more lenient state laws.

The state is making an effort to keep up with housing demand - sometimes overriding city policies for ADUs.

“State laws requires the city to have an expedited permit process for accessory dwelling units," said Michael Codron, City of San Luis Obispo Community Development Director. "We are able to turn around our plan checks very quickly.”

“They keep over the years, making things even easier so providing even more ways that people can permit ADUs and sort of overriding in some cities own regulations,” said Rosie Dyste, City of Santa Barbara Community Development Project Planner.

“The intent with the accessory dwelling unit is that it gives existing properties the ability to provide homes and hopefully in a manner that is affordable for people to be able to rent,” said Darren Nash, City of Paso Robles City Planner.

While some local homeowners praise the benefits, other residents hesitate to jump on board with the trend.

“We’re seeing more and more people take advantage of this opportunity whether it’s for family - or a way to afford a property.”

Lindsey Harn bought a home in San Luis Obispo back in 2017. Back then it was a two=bedroom, one-bathroom house.

She then added two legal bedrooms - bathroom drywall and a kitchenette - turning her attached two-car garage into a separate living space.

“I was able to create an affordable space for people who live and work here,” said Harn.

“If I were to have purchased this property as a four bedroom, two bath I would have had to pay a significantly higher price than buying a two bedroom one bath," said Harn. "The cost to convert this space was very affordable.”

The rise in popularity of ADUs is seen throughout Central Coast neighborhoods and now even new home developers are catching on.

Bryn Britton recently scooped up a brand new home in the San Luis Ranch community - with an ADU already attached.

“You’re just providing more opportunities in a community where it can be expensive to live,” said Britton.

She says homes with her floorplan are sprinkled throughout the development - something that’s more common in recent years.

“We have the opportunity to rent it out and offset some of the mortgage payments,” said Britton. “A few years ago, the state of California instituted some policies where they are encouraging ADUs and being able to provide more housing so it offsets the cost of housing since it is really expensive.”

While ADUs can help alleviate a tight rental market - or some breathing room for a homeowner - not all neighbors are jumping on board.

“While helping the shortage of housing - for ya know - granny units and ADUs - it’s just increasing the property values and making it harder for someone like me to buy a house in this area,” said Justin White, San Luis Obispo resident and Publicis Senior Software Engineer.

“These cars have to go somewhere. ADUs are not required to provide parking," said Allan Roy Cooper, Save Our Downtown Secretary. "We are beginning to confront a situation in the city where there’s less parking available. ”

To find out more about policies and requirements for ADUs - you can visit your city’s website.