by Olesia Chikunova, ADU Specialist.
Home office has become a necessity. One in four workers is likely to work at least a day or two from home each week, if we are to believe the McKinsey Global Institute.
The ADU (accessory dwelling unit) provides the ideal solution for a home office.
Since the spring of 2020, the pandemic has forced offices, workplaces, and schools in America to close their doors temporarily, changing the work habits and environments of millions of Americans in an instant. According to data gathered by Pew Research, nearly 71% of American professionals – who can work remotely – do it either full-time or part-time as a result of the pandemic. It is not a force major or a trend anymore. It is the way we will live from now on.
Given this is a common predicament American professionals find themselves in, we need better methods to make the remote working environment a conducive space. The Accessory Dwelling Unit (ADU) has green light from the legislation point of view, homeowners are encouraged by the state to build and local jurisdictions have to play by the State rules. The ADU home office needs a kitchenette and a bathroom to be legally permitted, but who does not want a cup of coffee when working… right?
You may be tempted to get a regular home office. It looks less expensive than an ADU home office. But there is a catch.
The ADU Home office provides the ideal solution with unique benefits. While it may be tempting to order a shed (and a beautiful one at that), this is just an expense (like a new car that loses value as soon as it leaves the shop floor). It will not appreciate with time the same way an ADU home office will.
An ADU home office is an office space created in an accessory dwelling unit or in a junior accessory dwelling unit.
These units are either attached to your home (as a full size ADU or as a Junior ADU) or detached.
Any ADU home office will include a sleeping and living space, bathroom, and a kitchen – or in some instances a kitchenette. These units can be built within your home by remodeling a basement or converting unused space. Junior ADU is always converted out of existing space and is less than 500sf.
The study by Pew Research reveals that 23% of professionals said they felt dissatisfied with their remote working environment. Another 32% said they could not conduct remote work without interruptions. Not surprising. When the entire family converges in a 1,400 square foot home, it is reasonable to expect constant interruption and other embarrassing incidents that make working from home unfeasible in the long term.
Building a dedicated space is the ideal solution to ensure you get all the benefits of remote work without the drawbacks. In California, with changes to ADU regulations, that assigned space could be an ADU. ADUs allow homeowners to leverage their available lot square footage. You can build a new unit for your ADU home office. Or you can convert a garage, covered carport, or unused space into an ADU and from that build a sizable home office with all the trimmings you need to be productive.
Another benefit to having a dedicated working space permitted as an ADU, is using financial incentives to build the unit. You can claim tax deductions for using the building solely for home office purposes. This is harder to do if you’re working out of the kitchen, lounge, or corner of your bedroom.
The costs for a home office built as an accessory dwelling unit start from $160,000. The good news is that it adds to your equity, your property value goes up. The bad news is that you will need to finance construction costs, typically done through Home Equity Line of Credit (HELOC) or refinancing.
Can’t afford full scale ADU yet? Look into modern sheds that can be used as a home office. Prices for the home offices with no bathroom start as low as $48,000. This number excludes site specific conditions that drive costs for foundation and utility connections. In the end, when you add all costs up, a shed may look less convincing as an investment. In fact, it has all the potential to become an expense.
Depending on where you choose to set up your ADU home office, you need to consider its appearance. This will affect its function and practicality while adding value to your home. The four primary aspects you should focus on before building a home office ADU include space, lighting, privacy, and flexibility
Before you can dive into the finer details of the ADU, you should consider what you’ll be converting or how you’ll be completing the build of your ADU.
You can use an attached garage, a detached garage, or build an ADU on your lot. Many homeowners choose to convert existing space from a garage as this offers excellent square footage without the cost of erecting an entirely new building. Given that most double garages average 400 square feet, that’s ample space to build a home office.
When building your ADU consider how you will be lighting the space. Lighting is crucial to productivity because it enhances work performance. It stimulates mental acuity and vitality while reducing daytime drowsiness and fatigue. You can always rely on light bulbs. However, if you have the option, you should use natural light as your work hours will coincide with daytime hours. This way you won’t need to use any additional electricity to power light bulbs. You can build the ADU in a way where it will receive the most daytime light.
How much privacy does your ADU offer? Considering that interferences and disturbances are the challenges of remote work, your ADU needs to have sufficient insulation to promote privacy and productivity. Additionally, your ADU should also have a clear separation between the primary residence. You can achieve this by using a separate entrance to access your home office. This will ensure you feel as though you’re going to work. This will also discourage children from disturbing you during working hours.
What can your ADU offer besides a workplace? This is something you need to consider before building. A flexible home office design ensures you can repurpose the space if you no longer need to use it as a home office. Therefore, when building your ADU, consider additional features. A small kitchen. A living space. A bathroom. Have the space designed to be easy to adapt into living quarters while being able to use it as a home office. While these features may come at an additional cost, the amount of value they add to your property far outweighs the investment.
Legally permitted ADU, built well and on a reasonable budget, is a good investment.
Legally permitted means you have applied for a building permit and, after the construction, had it finaled by the building inspector. Built well – means built with materials of good quality and by an experienced crew. Reasonable budget means that whatever you have spent on the ADU has a chance to get reflected in the property value. ADU gives you back in property value generously, as soon as you passed your final inspection.
The legislation passed by California in January 2020 made it possible to add more livable space to a current single family home. You might be surprised by the number of options this law has opened for an average homeowner, who has become a real estate developer overnight.
These options include newly constructed detached or attached ADU and conversion of existing space (garage or basement). You are allowed to build up to 1200sf. This is your living space #2. As an additional option, you may convert existing square feet into a Junior Accessory Dwelling Unit. This makes it your living space #3. Spread your family out or rent out.
If you build your home office as an ADU, it will be treated by appraisers the same way as they treat the main house. Some appraisers even attach a higher value to ADU price per square foot, as it has kitchen and bathroom for a smaller square footage. It appreciates the same was as the main house, and can be used when re-financing.
Accessory Dwelling Unit is a small house. It needs utilities and foundation as much as your main house, but has less footprint to spread the costs over. Hence we always encourage you to build max possible.
Trenching for utilties costs the same whether it is for a 200sq ft ADU, 500sq ft ADU or 1200 sq ft ADU. This is the type of fixed cost that makes per square foot costs ridiculously high for smaller ADUs.