by Olesia Chikunova, ADU Specialist.
Have you ever tried convincing an older family member or parent to move in with you? It can be quite a task. Seniors don’t want to be babied. And why would they? They’ve had their independence and personal space for decades.
But, as they age, there’s a greater chance that they need some assistance. Being close to them can be reassuring and offer a sense of security — for you and them — in emergencies.
If growing utility costs and health issues are not reasons enough, their own space in a granny flat is the best way to convince an older relative to move closer to a family that can help them.
A granny flat is a happy medium to give an older family member the push to admit they need help and the guarantee they’ll have that help when needed.
If this is the first you’ve heard of a granny flat, think of it as a secondary house, additional structure, either an extension of your main house or a building in the backyard. Let us not put our senior citizens in basement apartments. Steps are the hardest things for an elderly parent to navigate.
Specs like these make a granny flat the ideal way to share your home with older family members while maintaining privacy, allowing you to coexist a few feet from each other.
Multigenerational households, as defined by Pew Research Center, include two or more adult generations (with adults aged 25 or older) or a “skipped generation” of grandparents and their grandchildren under 25. This type of living arrangement has become more common in the United States. Between 1971 and 2021, the share of the population living in multigenerational homes has more than doubled from 7 percent in the 70s to 18 percent recently.
These figures are unsurprising given affordable housing issues and the numerous benefits of living in a multigenerational household. These are three of the most convincing.
With multigenerational living, you have a built-in support system.
If the elderly relative requires assistance, they have capable, trustworthy people to help.
If the family has pets or young children, having a grandparent in a granny flat is the equivalent of having free babysitting or petsitting on tap.
Since family members are nearby, you’ll always have emotional support and a feeling of safety.
It’s reassuring to know that loved ones nearby genuinely care about you and are ready to assist when necessary.
Living close to family members is crucial for strengthening family bonds. Multigenerational living provides ample opportunities for family gatherings, shared experiences, and memory-making, leading to stronger relationships and a greater sense of community among family members.
Having little ones with your parents or in-laws in your household can strengthen the relationship between the grandparents and grandchildren — leading to a closer, more connected family.
Living in a multigenerational household also has its financial advantages. The living arrangement allows for easier expense sharing, significantly reducing the cost of living.
This is especially useful when launching a career, starting a family, or if an elderly family member has a fixed income. Sharing the property with your parents is ideal for saving money and reducing your parent’s retirement expenses.
The “granny flat” includes four subcategories of ADUs that are either separate from your home or attached to it.
Garage conversion. The garage conversion is the easiest granny flat to build because it relies on the existing structure. Rather than requiring you to build a foundation and the exterior, you only need to segment the existing structure into rooms.
Above Garage Conversion. To create this granny flat, you construct it on top of the existing standalone garage instead of renovating the current space. This will result in a separate granny flat and ensure you do not lose any essential room in your garage. Not recommended for residents with mobility issues, though.
Basement or Attic Conversion. An interior ADU is a living space built inside your home instead of being attached to or behind it. You can convert your basement or attic into a granny flat to create an interior ADU. However, building can be more complicated than constructing a detached ADU from scratch.
Not recommended for residents with mobility issues either.
Detached Unit. The standard “detached ADU” is a separate living space not connected to any existing structures on your property. Usually, this freestanding unit is built in the backyard of your property and has the most privacy and versatility. This is an ideal in-law apartment, a new home that can be built as one level, with a walk-in shower and all other best practices of granny flat designs.
A granny flat can be a studio or a one-bedroom unit with a living area, an eat-in kitchen, and a full-size bathroom.
In California, the average size of a granny flat is about 615 square feet, but for maximum comfort 800 to 1,200-square-foot two-bedroom granny flat is advised.
Suppose you are using a granny flat to accommodate elderly family members. In that case, it may be necessary to include accessibility measures such as a ramp to the entryway, a rail or seat in the shower, or other options that can cater to the older family member’s specific needs.
Modern granny flats are superior to traditional ones in every way. They offer more space and natural light, with higher ceilings and larger windows. They utilize smart storage solutions, ensuring storage is easy to reach and doesn’t take up precious square footage.
Modern granny flats are built with the latest sustainable materials and energy-efficient features.
Granny flats often have open-plan living spaces characterized by bright, airy spaces offering ample natural light and ventilation. The flats are easily accessible, with wide doorways and step-free entrances, making them welcoming for walker and wheelchair access. They connect indoor and outdoor living spaces, offering endless opportunities for entertainment and relaxation.
Now it’s time to crunch the numbers, something we’ve done below to give you an idea of how much building a granny flat could cost.
There isn’t a standard fee to build a granny flat. Instead, how much you pay will depend on:
That said, this is a rough estimate of how much you can expect to pay to build a detached granny flat.
Bay Area. Adding a granny flat to your Bay Area property, you can expect the cost to range between $350 to $900 per square foot. Overall, the construction of the unit can cost anywhere from $250,000 to $500,000.
Los Angeles. The typical cost range per square foot for an in-law unit is between $250 and $400. The construction costs for such units usually range from $100,000 to $400,000 on average.
San Diego. Building a granny flat in San Diego, the cost per square foot usually ranges between $300 and $500. You can expect to pay around $250,000 for a one-bedroom, one-bathroom granny flat. Construction costs for larger granny flats can reach up to $380,000.
San Francisco. Building a granny flat in the largest city in the Bay Area can be expensive. It’s usually the most costly California. Estimates suggest that constructing a granny flat in San Francisco can cost between $350,000 to $390,000; in some cases, the cost can even reach up to $800,000.
A granny flat is one of the best assets. The accessory dwelling unit works through three returns:
Generate rental income. If an elderly relative needs more assistance and moves to assisted living, the granny flat won’t go to waste as you can rent the property for extra income.
Increase property value. If you decide to take out a second mortgage, HELOC, or sell the property, you can realize the property value.
Leverage regular tax deductions. Even if you’re not making a profit from renting a granny flat from the onset, you can write off the difference.
If your costs exceed the rent for your granny flat, you can claim loan interest, maintenance, and insurance as tax deductions.
In short, a granny flat will increase your property taxes, but not as much as you’d think.
Homeowners often worry that building a granny flat will significantly increase property taxes because properties are reevaluated when there’s new construction, or you sell the property.
But, contrary to what you may think, building a granny flat does not trigger a complete reassessment of your home’s value. Instead, the county tax assessor will conduct a “blended assessment” of your property.
In a blended assessment, the assessor estimates the value of the granny flat by considering the cost of building it. Then they’ll add this amount to the current assessed value of the property to arrive at a new assessed property value.
Your primary residence will not be reassessed in this process.
This means that once you complete a granny flat project, your property taxes will only increase based on the additional value created by the granny flat. The taxes you pay on the primary home will not change.
For example, if you’ve finished constructing a granny flat that costs $200,000 and your overall property tax rate for the city and county is 1 percent, you’ll pay $2,000 extra annually in property taxes. This amount gets added to your existing payment of $8,000 per year, but this payment won’t change since the assessed value of the main house, which is $800,000, remains the same.
Therefore, if you have been residing in your home for a long time and your property taxes are low, you can continue to enjoy the same low taxes in the future, even after building a granny flat.
Yes, a granny flat provides exceptional value to your property with a minimal investment.
In California, a quality-built granny flat can increase your home’s value by as much as 40 percent.
Although there will be a slight increase in property taxes, the value a granny flat adds to your home outweighs this modest tax increase.
Suppose you live in the Los Angeles area and add a granny flat to your property. In that case, it can increase your property value by approximately $550-700 per square foot. For example, a 1-bedroom, 600 sqft ADU would add a value of $330,000 to $420,000 to your property. However, remember that the value of a granny flat can vary depending on the location within the state.
A homeowner can demand more for a granny flat that it’s the boundaries Los Angeles Metropolitan area than those within the Greater Los Angeles area.
And homeowners in the Bay Area can add as much as $600,000 to their property value for a 600 sqft granny flat.
Investors and buyers in the state always search for ways to reduce the rapidly rising mortgage payments and hedge their investments.
A home with a granny flat is the closest thing an investor can get to a multi-family home without paying multi-family pricing.
Since house hacking — a system of renting rooms or space in your home to reduce your own mortgage payment — has become trendy for younger buyers, buyers that don’t want to share their personal space with strangers will fight for the opportunity to buy a home with a well-built granny flat.
Granny flats are typically built to house grandma, so they are referred to as such. However, some are constructed purely to generate rental income.
In California, the legislation allows — even encourages — you to rent out a granny flat. These dwellings have generated unprecedented demand in the current housing and rental market.
However, whether you can rent the dwelling will depend on your homeowner’s association’s regulations.
You can rent your one-bedroom modern granny flat in Southern California for $1,700 to $2,200 monthly.
Furthermore, a homeowner in the Bay Area can demand even more for a one-bedroom granny flat, between $2,000 to $3,000.
Of course, the larger the granny flat, the more you can demand in rental and the more value it’ll add to your property.
If you spend six figures on a granny flat, you don’t want things to go awry because you didn’t meet the legal requirements.
You should have some basic information about the construction requirements of a granny flat.
You can use these questions as the starting point for your construction project.
In short, yes. You are required to obtain a permit.
You must comply with your city’s building, planning, and zoning requirements. Depending on where you live, you may also be subject to county or state regulations. It is advisable to seek guidance from officials or hire an ADU company to navigate laws before proceeding with construction.
You typically need approval from a planning board or a similar government entity to construct a granny flat. However, there are some exceptions. In California, for instance, you can bypass the planning process if your granny flat is smaller than 800 square feet and less than 16 feet tall. A granny flat with four-foot rear and side setbacks may also be exempt. Be sure to check for any other applicable guidelines.
To determine if your property is zoned for a granny flat, check if you meet the above criteria. If you do, you can skip the planning process. However, if you still need to meet the requirements, it’s best to research and contact your local municipal planning department. They can provide you with valuable zoning information on your property. Another option is to hire an ADU company.
An ADU company specializes in zoning, permitting research, and constructing your granny flat. Whatever you choose, conducting research beforehand will make the process smoother and increase your chances of a successful build.
You could do the research, permitting, planning, and building as separate phases in your granny flat project. But the better option to bring your granny flat to life is relying on a company specializing in ADUs.
HomeWIP has become the Bay Area’s preferred ADU construction partner. We become your dedicated partner throughout the process, handling the heavy lifting, site measurements, and city permits to ensure your home is designed to local building codes and is viable.
Our units come fully equipped with insulation, drywall, and kitchen appliances, ready to go from the inside out.
Let HomeWIP help you achieve your dream granny flat with ease and expertise.