Updated October 2026
A permitted ADU usually adds value, but not by multiplying its square feet by your neighborhood’s price per square foot. Appraisers value it from comparable sales and from the rent it can earn.
The short version
- Value comes from comps and rent. A shortcut like “1,000 sf × local $/sf” overstates it.
- Only permitted space counts. An unpermitted unit can lower value and complicate a sale.
- Building an ADU reassesses only the new construction for property tax. Your existing home keeps its assessed base.
- FHA lenders can count up to 75% of an existing ADU’s estimated rent toward a buyer’s income, which widens your buyer pool.
- You can only sell an ADU separately where your city has opted into AB 1033.
How appraisers look at it
The appraiser finds recent sales of similar homes with ADUs nearby and adjusts for size, condition and layout. Where few comps exist, the rent estimate carries more weight. That is why the same ADU can add more in one neighborhood than another.
What raises the number
- Independence. A separate entry, its own outdoor space and privacy from the main house make the unit rentable and read as a second home.
- Bedrooms and baths. A real two-bedroom rents to more people than a studio.
- Quality of the whole lot. A unit that blocks the yard or the main house’s light can cost you on the other side of the ledger.
- Clean permits. Final sign-off and a certificate of occupancy are what a buyer’s lender looks for.
Detached, attached or conversion
A detached ADU usually adds the most usable space and privacy. An attached ADU shares a wall and can be cheaper to connect. A garage conversion costs least but often trades away parking and storage. Under state law a city can’t set its maximum ADU size below 850 sf for a studio or one-bed, or 1,000 sf for more bedrooms.
How we use it
On many lots, the bigger value move is more homes, not one ADU. SB 684 and SB 1123 let you split a lot and build homes that sell on their own. Our Mariposa Complex in Altadena puts three homes on a shared driveway under SB 1123, each with an attached ground-floor ADU. Randolph Complex fits two homes over a three-car garage on a hillside lot. Start with our small-lot subdivision page.
Sources: HUD 23-237, HCD ADU fact sheet (April 2026). Not appraisal or financial advice.
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