The Hidden Challenges of Building an ADU in California (Even With New Laws)

Over the past several years, California has passed a series of laws aimed at making accessory dwelling units (ADUs) easier to build. These reforms are part of the state’s broader effort to address the housing shortage by promoting infill development.

Beginning with SB 1069 in 2016 and continuing through AB 68, AB 881, SB 897, and AB 2221, the state has reduced parking and setback requirements, eliminated lot size minimums, and required that most ADUs be approved within 60 days. The goal has been to simplify the process and standardize approvals across jurisdictions.

This has led to a widespread perception that ADUs are now simple and affordable to build. But while the legal framework has improved, many practical challenges remain.

Where Policy Meets Reality

Even with favorable zoning, feasibility still depends on financing, site conditions, and local implementation. These factors are often underestimated.

Financing is still limited. ADUs often do not qualify for traditional mortgage products, and specialized financing remains niche. Many projects stall early due to lack of capital.

Source: Freddie Mac

Construction costs are high. Due to fixed site prep, permitting, and utility expenses, detached ADUs can exceed $300,000 to $400,000. ROI is not always straightforward.

Site-specific constraints matter. Sloped lots, access issues, or poor soil conditions can add time and cost. These issues are often missed in preliminary evaluations.

Fire access and design requirements are often overlooked. Even if a unit meets zoning, it must still comply with fire code, building code, and sometimes architectural design standards.

The Local Layer Still Shapes the Process

Although the state sets the baseline rules, local governments interpret and enforce them in different ways. Jurisdictions may apply additional utility requirements, enforce stricter fire access standards, or delay approvals through inconsistent review processes.

Some cities move quickly. Others require multiple plan revisions, interdepartmental sign-offs, or third-party coordination that can extend permitting by several months.

Real Examples from the Field

Los Angeles: A compliant ADU required redesign due to inadequate fire access.

San Diego: A garage conversion was delayed five months due to an unexpected utility upgrade.

San Mateo County: A project meeting all objective standards took over 120 days to be approved due to staff coordination delays.

Each case shows how site conditions and local processes can override what state law seems to allow.

What to Evaluate Before You Build

To avoid delays and unexpected costs, assess:

• Zoning and overlay restrictions

• Utility capacity and access

• Site layout and fire access

• Construction costs and rental or resale potential

• Local permit timelines and fees

• Do not assume that eligibility under state law guarantees a smooth path forward.

Final Thoughts

ADUs can be a powerful tool to expand housing options, generate rental income, or support multigenerational living. But they are not a guaranteed solution. Success depends on careful planning, local knowledge, and early due diligence.

The key question is not just “Can I build an ADU?” but “What will it take to build one that actually works?”