The ADU Guru
What is Junior ADU or JADU? and is it even worth building in 2022?
Updated: Apr 26
Junior Accessory Dwelling Units (JADUs) are small living units (up to 500 square feet) created out of space within an existing single-family home or an attached garage.
Junior ADU is a legal and regulatory term unique to California. A JADU can be built as an accessory unit in addition to an ADU.
Although JADU and ADU sound similar, the two have a lot of differences.
JADU VS ADU, what's the difference between the two?
A JADU must be contained in the existing structure of the main house, which means it can be a converted living space such as a playroom or bedroom. It can also be a converted, unlivable space that confides within the main house, such as an attached garage (conversion of a detached garage must be an ADU), basement, or attic space.
Lastly, a Junior ADU has fewer requirements from ADUs, as they:
· need their own kitchen, but can share the bathroom with the main house,
· can connect to the main sewer line of the house,
· and they need only an electrical sub panel box rather than their own meter.
These relaxed requirements will reduce the costs involved in constructing a JADU unit.
What is the expected cost for a Junior ADU?
Like any other construction project, the price for a JADU can vary greatly depending on the situation.
While a simple conversion of a playroom to JADU with a small kitchenette and no bathroom might only cost $20,000 to $30,000. More complex garage conversion to a Junior ADU, that has a separate bathroom and full kitchen can cost anything between $50,000 to $90,000, and sometimes even more,
And although the cost of garage conversion to JADU is generally cheaper than garage conversion to an ADU, which ranges between $80,000-$130,000. JADU does come with certain limitations.
What are the JADU limitations?
A Junior ADU can only exist in an owner-occupied residence. This means that once you, the owner, leave the house to live in a different place, the JADU will cease to exist until either you move back into the house or you sell the property to a new owner that will live in the house. In other words, you are only allowed to rent out the JADU if you also live on the property. That is a downside since rental property investors will not be able to use those units as a third unit in houses they do not live in and can potentially lose tens or even hundreds of thousands of dollars during the lifetime of the property if it is not allowed to be rented.
A way around JADU limitations
There is a way to rent all the units: JADU, ADU, and the primary residence, without breaking the law. It's called a Land Trust. You can create a Land Trust and transfer the property to the Land Trust. The state did give exemptions for the next five years in the process, allowing investors to use this method to rent all units. The main issue is using a Land Trust is that the lender might recall the loan, in which case you might need to pay off the mortgage in full. Therefore, before moving forward with a Land Trust, we recommend contacting the bank that holds the mortgage.
So, with all of those limitations, is it still worth building a Junior Accessory Dwelling Unit in 2022?
It depends; it depends if you could build out an ADU or not. If you can build out an ADU in addition to a JADU, I would personally recommend building both a JADU and an ADU as long as you plan to live on the property. However, if you don't have enough space on the lot for both or do not plan on living on the property in the near future, building an ADU and not a JADU is usually the better way to go. But again, every project is different, so if you want help figuring out the best option for you, book a 15 minutes FREE consultation with one of our team members by clicking here, and they will help you determine the best possible route for you.
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