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Top ADU Locations in California


Accessory dwelling unit

Accessory dwelling units, or ADUs, have been much sought-after in California ever since the state forced cities to relax their regulations in 2017. The years that followed brought in more regulatory changes, making it easier for homeowners to expand livable spaces, and fueling growth of ADU-building companies. Insights gleaned from our data reveal there’s been over 100,000 ADU permit applications and new homes built with ADUs across the state since January 2017.


Where are ADUs being built?


It doesn’t come as a surprise that the most populous areas produce the highest volumes of ADUs: Los Angeles-Orange County represents a whopping 58% of the statewide total, San Francisco Bay-San Jose takes second place with almost 17%, and San Diego is third with almost 8%.


A different view on ADU activity

In order to find leaders and laggers in this ADU race, we adjusted the numbers for population and seasonality. Looking at areas where there are at least 100 finished, in-progress, or in-review ADU applications since 2017, we uncover some interesting insights throughout the state. From north to south, the cities that show the highest ADU activity are neither the largest nor the most populous.


In the San Francisco Bay Area, cities on the Peninsula and South Bay, including San Carlos, Atherton, Menlo Park, Los Altos, and Saratoga, are the most active ADU builders. On the Central Coast, the highest ADU activity is seen in Carmel, San Luis Obispo, Nipomo, Santa Barbara, and Ojai. And in Southern California, ADU building is widespread in the San Fernando Valley, Santa Monica, Culver City, Garden Grove, and Encinitas. This is not to say that the cities mentioned above have more ADUs than their neighbors, but that adjusted for their size and seasonal permit application patterns, they are more actively building ADUs.


We see ADU activity decrease as we move east of San Francisco, Los Angeles, and San Diego. When trying to understand these patterns, our guess is that, besides the population density, a myriad of other factors come into play. They range from the strictness of local ADU ordinances, permit fee assessments, and processing timelines, to market forces that include the demand for short- and long-term rentals, availability of labor supply and professionals ready to build, as well as options for construction financing. We should also take into account homeowners’ income levels, equity positions, and motivations for building an ADU, whether they aim to bring in additional revenue streams or simply create more space for family members. According to the ADU owner survey by UC Berkeley Center for Community Innovation, “property owners with a new ADU on their property are more affluent than the typical homeowner in California”. Additionally, half of new ADUs are being rented out, with only 8% of that number being short-term rentals. All these factors may explain the trends we see in numbers, to be addressed in more detail in our future posts.


Equipped with the ADU permit data, how can you use it to inform your actions? Whether you are a homeowner, a property management company, or a builder, it can help you answer a multitude of questions.


What can Builty ADU permit data provide?

At Builty, we’ve compiled the largest database of ADU permits in the United States. The information derived from this data empowers many insights and opportunities:

  • Homeowners can learn about ways to increase home equity by building an ADU, generate rental income from newly added living space, or create housing for family members.

  • Renters are benefited tremendously by ADU construction, as it means more housing supply, brand new conditions, and neighborhoods that were previously inaccessible.

  • Builders can better understand the market size and neighborhood trends of ADU construction, analyze the types of ADUs being built, estimate project cost, and see what the competition is doing.

  • Property management firms use this data to find new opportunities for short-term and long-term property management for ADUs, primary residences, or both.

  • Insurance agents are able to offer attractive deals on properties with ADUs, from builder’s risk and homeowner insurance, to renter and landlord policies, and find new customers or keep and upsell to the existing ones.

  • Loan officers find this information valuable in offering ADU financing options or helping clients refinance existing loans based on their improved home equity positions.

  • Real estate investors are able to find undervalued assets with ADU potential or properties with existing secondary units for long-term appreciation.

  • Market analysts obtain insights on migration and demographic patterns, home valuations, and neighborhood characteristics.

Interested in learning more? Reach out with questions, comments, or requests for data access. Builty offers unified intelligence of building permit data. We combine publicly available permit records from thousands of local jurisdictions, providing a clean and structured pipeline to be used in real estate analytics.



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