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

California has passed several laws to make it easier to build accessory dwelling units, or ADUs. These reforms aim to support small-scale housing growth and help address the state’s housing shortage.

Legislation like SB 1069 (2016), AB 68 and AB 881 (2019), and SB 897 and AB 2221 (2022) has simplified rules for parking, setbacks, and lot size. Cities are now required to approve most ADUs ministerially within 60 days, using objective standards. These changes have created the impression that building an ADU is now straightforward.

But policy and practice are not always aligned.

Permits Are Easier. Building Still Isn’t.

Even with favorable zoning, site-specific issues can quickly complicate things:

Financing is limited. ADUs often fall outside traditional mortgage programs. Renovation loans and HELOCs exist, but not all homeowners qualify.

Source: Freddie Mac

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  Costs are higher than expected. Permitting, utility connections, and site work drive up cost per square foot. Detached units can cost $300,000 or more.

  

• Site layout matters. Slopes, trees, and utility lines can make meeting code requirements expensive or unworkable.

  

  Design and fire access are often overlooked. Many cities require a clear path for emergency services or architectural compatibility with the main house.

Local Rules Still Apply

While state law standardizes much of the approval process, local interpretation still varies:

• Some cities apply stricter definitions of fire access, height, or setbacks.

• Others add design review or additional utility requirements.

• Permit timelines and fees vary widely, even when the 60-day review rule applies.

Case Examples

• Los Angeles: Fire access requirements delayed a code-compliant ADU.

• San Diego: A utility upgrade added five months and over $18,000 to the budget.

• San Mateo County: Internal coordination delays pushed review past 60 days.

How to Know if a Lot Is Feasible

Before moving forward, evaluate:

• Zoning overlays and development standards

• Site access and fire clearance

• Utility capacity and trenching needs

• True costs vs. expected rental or resale return

• Local review timelines

Final Thoughts

ADUs are a smart way to add housing, but they are not plug-and-play. State laws may give you the right to build, but local conditions determine whether you can do it efficiently.

The right question is not just “Can I build?” It’s “What will it take to build well?”