The Impact of Adu Conversions in Los Angeles

Homeowners are building ADUs to generate rental income, provide a dedicated office space, or accommodate family and guests. They are also a great way to downsize and stay near loved ones.

We examine how changes in local ADU ordinances impact ADU development by using a series of multilevel logistic regression models. We find that prior to the adoption of the ADU ordinance, neighborhood level characteristics and property level variables correlate with the likelihood of an ADU being built.

1. Increased Property Values

ADUs increase property values and can be a great way to add more equity to your home. They also can be an excellent source of rental income to help cover the cost of building and maintaining the ADU.

ADU’s can be built as conversion projects in existing spaces such as garages, basements or a freestanding backyard house. These are often the most affordable to build, but may not boost your property value as much as a fully detached ADU.

If you’re planning to build an ADU, make sure you get a professional design to ensure your new structure meets all state and local laws. A good design will save you money in construction costs and make your project more likely to be approved by your city. EZ Plans is the leading ADU design firm in California and can guide you through the complicated process of building an ADU. They will ensure your ADU complies with state laws, including Coastal Overlay zone regulations.

2. Increased Rental Income

In order to increase housing opportunities, the state of California has encouraged homeowner’s to add a second dwelling unit to their property. This is known as an ADU or “Accessory Dwelling Unit”.

Since these units can be built in the backyard or converted garages of existing single-family homes, they are generally cheaper and easier to build than a new multi-unit apartment building. These units can also be rented out and are a great source of passive income.

Additionally, if you decide to sell your home in the future, adding a rental space can boost its resell value. Renters are more likely to pay a premium for a home that has an additional living space. Moreover, if you are located in a popular tourist area, your ADU can be a great source of short-term rentals through platforms like Airbnb. This income can be used towards paying off your mortgage and even reducing your overall living costs.

3. Reduced Homelessness

An ADU (accessory dwelling unit) is a separate, second home that contains a kitchen and bathroom. They can be built in backyards or garages and can also be converted from existing living space such as basements and attics.

Many cities across the U.S are encouraging ADU production as a way to address affordable housing issues. A growing number of local governments are incentivizing homeowners to build or legalize these units by offering loans and other incentives. For example, a pilot program in Multnomah County, OR — “A Place for You” — covers ADU construction costs for homeowners who agree to rent their new units to individuals or families transitioning out of homelessness.

In Los Angeles, the city has created an ADU pilot program that offers forgivable loans of up to $75,000 to construct new ADUs and $50,000 to rehab existing unpermitted ADUs. The goal is to keep homeless people off the streets while helping them to rebuild their lives.

4. Increased Community Cohesiveness

Despite the current housing crisis in Los Angeles, many homeowners still have an opportunity to build an ADU on their property. These granny flats (or in-law units) are a great way to increase your home’s value, create extra income, and give back to the community.

While the State laws have been a bit confusing and complicated, new clarifications are helping to make it easier for homeowners to understand the standards and build their ADUs. With cities and counties releasing their own rules in response to State regulations, it’s important for residents to consult a design team with experience in ADU construction.

EZ Plans offers standard ADU plans that can be modified to fit your property, and we’re proud to say that we have helped numerous clients through the entire process. Whether you want to convert your garage into an ADU or simply add an addition to your existing home, our experts are ready to help!


ADU conversions in Los Angeles offer homeowners various benefits, including increased property values, rental income opportunities, addressing homelessness, and fostering community cohesiveness. These conversions provide homeowners with the ability to generate rental income, create dedicated office spaces, accommodate family and guests, and downsize while staying close to loved ones.