Design Group in Santa Rosa. A property owner can also save money by installing prefabricated components like kitchen and bathroom pods. In rural areas or on properties in the wildland- urban interface (WUI), the property owner must pay an additional cost for the ADU so it complies with WUI standards and codes. Unincorporated parts of a county may require the property owner to add an additional water and septic system for an ADU. There can be a solution to this issue. For example, a property owner can “declassify” a bedroom in the main house by declaring it is being used as a home office rather than a bedroom. Then the bedroom in the ADU will count as one of the parcel’s bedrooms for a septic system. Typically, a property owner whose parcel is within city limits can connect an ADU to the main home’s existing water and/or sewer lines. Other costs for an ADU include insuring the ADU as an additional item on a homeowner’s policy. An ADU with a kitchen may require more coverage on a home- appliance warranty policy. If an ADU is for a special purpose, like housing a person with a physical disability, the owner must pay for specialty items like a wheelchair ramp. They will also need to pay to furnish the ADU and pay interest on the ADU construction loan. These expenses can result in a total cost in the tens to hundreds of thousands of dollars beyond the cost of basic construction. Cost is a factor limiting the number of ADUs in Windsor, say Kimberly Jordan, project planner, and Jennifer Sedna, planner, both for the Town of Windsor. “We get a lot of inquiries from people who are interested. After they estimate the cost, they find $300,000-plus would be too much,” says Jordan. Windsor currently sees more interest in ADUs from property owners with larger parcels. “Yet so far there isn’t a trend as to where in town people want to build ADUs,” says Sedna. “In 2024, we saw 21 people apply to build an ADU. Six of those [have been approved so far].” She says all the applications will be issued if the applicants continue through the permit process. The 2024 applications and prior approvals for ADUs have been all over town. Property owners can approach local lenders to get assistance for ADU construction. In 2022, Redwood Credit Union (RCU) began partnering with Napa Valley Community Foundation to offer ADU loans. “Borrowers can use future rental income to qualify for their loan,” says Ron Felder,
“We seem to average only three or four ADUs a year. There have only been one or two JADUs constructed here in the city total,” says Rafael Miranda, associate planner for the City of Cloverdale. Novato has issued a relatively high amount of ADU permits, but its numbers have started dropping. Michael Smith, principal planner for the City of Novato, estimates the city will issue permits for 15 ADUs a year between 2023 and 2031. “The City of Novato issued 23 permits for ADUs/JADUs in 2024, 24 permits in 2023, 20 permits in 2022, 27 permits in 2021, 13 permits in 2020 and eight permits in 2019,” says Smith. In comparison, the City of American Canyon is seeing interest go up. American Canyon issued seven permits for ADUs/JADUs in 2024, five permits in 2023, six permits in 2022, one permit in 2021, four permits in 2020, and four permits in 2019. One of the most interesting questions about ADUs is why property owners are building the units. City and county permit applications typically do not require this information. Yet during conversations about permits, property owners may share their reasons. Contractors and nonprofits usually learn the property owner’s motivations as they discuss plans. A property owner can change the purpose of an ADU at any time.
executive vice president and chief lending officer for Redwood Credit Union. “Our loan product also establishes a value for the completed ADU based on future rental cash flows instead of the cost of construction. This provides a more favorable loan-to-value ratio.” Other advantages of working with RCU include competitive fixed rates and the option of leaving a first mortgage in place. RCU can process a loan preapproval upfront so the potential borrower can make an informed decision. Currently, RCU only finances ADU construction on properties that are a borrower’s primary residence. The borrower can live in either the main structure or the ADU as their primary residence. A look at numbers Redwood Credit Union indicates property owners in Napa and Sonoma counties have the highest level of interest in ADU construction, followed by interest in Marin County. Yet the numbers are not uniform across a county. There are also spots in Marin County where there is more interest, and areas of Sonoma County where there is less. For example, there is not a great deal of ADU development in Cloverdale.
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April 2025
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