LA city’s ADU construction in LA (Accessory Dwelling Unit) permit count has surged more than 4 times compared to 2017.
With the state government’s deregulation and expectations for rental income and asset value appreciation, demand for ADU construction is increasing across Los Angeles, including Mid-City and Mid-Wilshire near Koreatown.
According to the Los Angeles Department of Building and Safety (LADBS), the annual number of ADU permits increased by approximately 4.4 times from 1,659 in 2017 to 7,321 last year.
By region, the Valley area, including Sun Valley, Reseda, and North Hollywood, ranked at the top. Construction permits were also active in areas near Koreatown, such as Mid-City (1,012 cases) and Mid-Wilshire (624 cases), where many Koreans reside and invest.
Chris Lee, CEO of PUB Construction, said, “About half of the demand for ADUs is for residential purposes by children or the owners themselves, and the other half is for generating rental income,” adding, “In cases of actual residential use, there are many instances where people want to provide an independent space for adult children in this era of high prices or to reduce living costs, and they are also used as multi-purpose spaces such as guest rooms or party rooms.”
According to the Korean American Construction Association, the average ADU construction cost in Koreatown, LA, is currently around $300 per square foot. Costs may increase depending on the blueprint design or the level of interior finishing materials. The total required time, including city government licensing, blueprint design, and actual construction period, is about one year on average.
The rapid increase in ADU construction was triggered by the implementation of the state government’s deregulation bills (SB 1069 and AB 2299) in 2017. In addition to the significant easing of parking space requirements and utility connection requirements, ADUs, led by single-family homeowners, are attracting attention as a viable alternative as new apartment development has slowed down due to recent permit delays and funding difficulties.
However, experts urge thorough preparation for the risks of rising construction costs and unexpected additional construction.
CEO Lee advised, “You should fully keep in mind the possibility of exceeding the budget as much as the advantages of rental income or asset value appreciation,” adding, “You should select a company with licenses, insurance, and abundant experience, and carefully review the claim process and funding capacity.”
