Frequently Asked Questions

An ADU is an “Accessory Dwelling Unit”. The State of California is requiring cities to allow ADUs to be built on existing properties with minimal hassle to create additional housing in the State. An ADU can be the built within the existing blocked-off section of the house with a separate entrance. It can also be a conversion of a garage or conversion/blocked off section of the house — or it can be built on an existing  carport and you do not have to create any new parking. A stand alone unit can be built in the back or side yard if you have the space. A one-bedroom stand alone unit can be up to 800 square feet. A 2-bedroom unit can be up to 1,000 square feet. One parking space per bedroom is required, however there are exceptions, such as living within .5 miles of a public transportation location.

The creation of an ADU requires the project manager to know and understand the extensive State and City laws related to the project.   Laguna ADU will work with the Homeowner to manage the project to ensure it is completed as quickly as possible in accordance with all the specific legal details related to each unique project, from beginning through completion.

Elizabeth Pearson, your Homeowner Advocate, who worked on both the City Council and Planning Commission, has not only a deep understanding of the State and City laws, has a knowledge of the City and community concerns  – and understands how the City works. She’s maneuvered the planning and ultimate completion of projects such as the development of the Montage Resort and the entitlement and building of the Susi Q Senior/Community Center. She has also reviewed and voted on over 200 Design Review Board approvals, primarily for residential projects.  Last, she has positive relationships with the City staff and leadership which enables her to capably be able to defend your application and project, if needed.

  • Generate additional household income, even if you obtained a loan to build it.
  • Increase the value of your home. 
  • Use under-utilized space in your house.
  • Use extra space in your yard.
  • Help provide housing for seniors, younger people or workers who have employment in Laguna Beach.

Orange County is faced with a housing shortage, and affordable housing is very hard to come by. Average rent for a condo now costs over $2,000 a month. Between senior parents on a fixed income and young adults entering the workforce and unable to afford rent, multi-generational living is the new normal. For senior parents requiring assisted living, costs can range from $3,000-$10,000 a month. Through financing, you can expect your ADU to cost $500-$1,000 a month, and at the same time, add value to your property.


An ADU can also provide the unique opportunity to own a rental property in Orange County, where the average home cost is now more than $700,000.

No, this is an over-the-counter City approval process. The Planning Staff reviews your design and engineering.  We urge you to not build in a way that blocks views or creates sound that could be disturbing to your neighbors (e.g. A/C-Heat units with loud outdoor motors/fans). If the application is complete the State mandates that the City approve it within 60 days, as per State law.

In an effort to address the state-wide housing shortage, California passed Senate Bill 1069, making it much simpler to build an Accessory Dwelling Unit (aka ADU or granny flat) on your property. The bill took effect January 1, 2017 and includes reduced parking requirements, reduced fees for utility connections, and reduced permit costs and approval time. 

Note: If you build a JADU, which is within the same walls of your existing home, you would just need to connect your utilities to your existing house. On conversions and stand-alone units, depending on the amp voltage of your primary home, you may need and want to create a separate or sub-electric panel and meter so that whoever is in that unit can pay for their own electricity.

Your plans can typically be created within four to six weeks.  The State requires the City to approve the project if a completed application is submitted within two months. The construction of your unit can typically take from 2 1/2 to 5 months, depending on the size and materials used. The City may delay stand-alone ADUs if the Fire Department places unusual or extensive requirements on the project.

Including construction, finished, and city costs, the all-in cost of adding an ADU typically ranges between $250-$375 per square foot, depending on finishes and land preparation needs – assuming no serious flood issues on the property or unusual City Fire Department requirements. Note: if you research the Internet, you will find te all-in cost to create a garage conversion can range from $80,000 to $150,000. We work with a variety of partners that can help you make the best choice for financing your ADU. Most clients will utilize existing available cash, a cash-out refinance, cash from a home equity loan, or a new reverse mortgage to finance their new ADU.  Let us know if you'd like a referral to one of our financing partners.

To find out more about your financing options, click here.

It is likely that your property taxes will increase slightly.  The City provides the County with info related to each building permit. The County Assessor will factor your multi-usage and/or added square footage to the tax valuation of your property, if a tax increase is applicable.  The tax rate is 1.25%, so you would typically add that to the newly built valuation to ascertain the additional tax to be paid.

Yes. The only thing that might be required is a building permit if a remodel is needed.


The State is allowing homeowners to rent both your units until 2025. Therefore, you would not have to live there until that time, per current law.

Yes, you probably can – and without any fines for previous non-conformity. Ask us to visit the unit with you and we can see what can be done.

Yes!  In fact, until 2025, you can rent both units out.

You can check or view the rentals in the Laguna Beach Independent to see what the market for different size units are.

Of course, the higher rents are derived from properties with a view. Adding a patio or balcony to your ADU will increase its appeal.

Examples of rents reviewed in February 2021, without a view:

  • 400 square foot studio or one bedroom: $1,350 to $1,800
  • 500 square foot one bedroom:  1,700 - $2,500
  • 2 bedroom ADU with patio: $2,500 - $3,250

We will bring ad examples when we meet with you to show you what has recently been advertised for rental units, both unfurnished and furnished.

Keep your ADU at 800 square feet or less. To meet Fire Department concerns, plan the placement of your new-build ADU 10' from any vegetation.