Seven Reasons to Start your ADU Project Now, Not Later

Co-authored by Scott Johnson, ADU Expert @ Napa Sonoma ADU Center & Founder, Pocket Housing LLC and Renée J. Schomp, Director of the Napa Sonoma ADU Center

Making the decision to take action steps on building an accessory dwelling unit is a big decision -- one of the kinds of decisions that it’s easy for anyone to sit on for months -- even years -- before turning the dream into a reality.

If you are a member of this dreamer club, then rest assured -- you are not alone! And the Napa Sonoma ADU Center is here to help you take your first steps on the road to a move-in ready unit. Here are seven reasons why we recommend you get going on your ADU (or Junior ADU) project today!

(And once you’re convinced, head on over and sign up for one of our ADU Feasibility Consults.)

Reason #1: Return on Investment

If you think you might rent out your ADU or Junior ADU for rental income, then the sooner it’s completed and that rental income is coming in, the better - you’ll earn back more on your investment, sooner. And if a family member like your mother-in-law is moving in, then she’ll start saving money that much sooner. To learn more about your ADU ROI, check out our ADU Calculator.

Reason #2: Interest rates are low

Now is a great time to secure ADU financing. Interest rates are as low as they’ve been in 20 years. ADUs are no longer unheard of at financial institutions.  Watch our on-demand webinar on How to Finance Your ADU and find local lenders and brokers on our Vendor Registry to get started!

Reason #3: The Season

Winter is a great time to get started on your project - financing, planning, designing, permit application all take time. Since that front-end part of the project does generally take a couple of months or more, and then the jurisdiction reviews it to approve the permit application, getting started now can help you be ready to build by spring or summer. For an overview of the ADU journey from A to Z, check out our on-demand ADUs 101 webinar and our ADU Workbook!

Reason # 4: Owner occupancy rules will sunset

Per the California state ADU laws that went into effect in January 2020 (making it easier to build an ADU!), ADUs that receive building permits between 1/1/2020 and 12/31/2024 are exempt from owner occupancy rules. (Junior ADUs still require owner occupancy.) If you build now, during this window, you will have the greatest number of options going forward because you won’t be limited by an owner occupancy regulation. Say 5 or 10 years from now, you need to move for work. Without the owner occupancy requirement, you can then rent out both the main house and the ADU without a problem.

Reason #5: Solar tax rebates will sunset

Most detached ADU construction requires a solar installation -- and the federal solar tax credit is diminishing. Next year it’ll be a 22% credit, and it expires in 2022 unless Congress renews it.

Reason #6: Building codes change

Building & energy codes only get more stringent. They update every 3 years, and the most recent updates went into effect January 1, 2020.

Reason #7: Approved permits expire

Some ADU projects stall after the permit application has been approved - keep in mind that if you’ve already submitted and received approval on an ADU permit, that permit can expire if work isn’t started within one year, or if work stops for more than 6 months.  Some jurisdictions have extended those timelines automatically due to COVID-19, but in general you have one year to start work from the issuance of the permit. If you don’t or if work stops for more than 6 months, you can file for an extension but you’ll have to make sure to do so before the permit expires.

Conclusion: Why wait? Start your ADU project now. Otherwise you’ll just be in the same place, “thinking about an ADU,” at this same time next year!

Sign up for one of our ADU Feasibility Consultations today.