People aged 40 to 60, often referred to as the “sandwich” generation, find themselves in the challenging position of caring for both their aging parents and their children. Finding suitable housing arrangements can be overwhelming in this balancing act.
Enter the accessory dwelling unit (ADU), a versatile and innovative solution that offers numerous benefits for those facing the unique demands of multigenerational living.
Also known as in-law units, granny flats, or carriage houses, ADUs typically include a kitchen, living area, and separate entrance. While they can be built as standalone units, they usually share water and energy connections with the primary house.
A junior accessory dwelling unit (JADU) is a smaller version of an ADU, not exceeding 500 square feet, and is contained entirely within a single-family residence. It has its own entrance and kitchenette, but may share bathroom facilities with the main house.
The state of California has made significant legal reforms to make it easier to construct ADUs and JADUs. These reforms include streamlining the permit approval process, reducing or eliminating minimum lot size requirements, eliminating or reducing parking mandates, and relaxing setback regulations.
For example, the state now requires all agencies involved in reviewing ADU plans to respond within 60 days of plan submission, including planning departments and utility companies.
The relaxation of regulations for ADUs aims to promote more accessible and efficient construction, address the housing shortage, and provide homeowners with greater flexibility in utilizing their land.
While some may have concerns about higher-density housing and increased residents and cars in the neighborhood, constructing an ADU on residential property offers many advantages for the homeowner. It can create more space for adult family members or provide opportunities for supplementary income.
Privacy and Space for All
The core of the ADU concept lies in its ability to provide a harmonious living situation for multiple generations. Maintaining privacy becomes crucial as aging parents require assistance and adult children return home. ADUs offer separate living spaces that can be customized to meet the needs and preferences of the occupants.
Aging parents can enjoy independence without feeling isolated, while young adults can have autonomy while saving on housing costs. This spatial division helps reduce the stress often associated with shared living arrangements and ensures a better quality of life for everyone involved.
Support for Boomerang Kids
With the increasing cost of living and education, it’s becoming more common for young adults to move back home after college. ADUs provide a middle ground where boomerang kids can regain stability without compromising the family’s living space. By offering a self-contained living area, parents can continue nurturing their children’s growth while instilling a sense of responsibility and independence.
In other words, they can be kicked out without truly being kicked out. Their tiny home becomes a launching pad for young adults as they transition into fully self-sufficient lives.
Caring for Aging Parents
The role reversal that occurs when the Sandwich generation takes care of their aging parents can be emotionally and logistically complex. ADUs streamline this process by allowing grandparents to maintain autonomy while living close to their children and grandchildren. This setup ensures that necessary care is readily available and fosters intergenerational bonds, creating a unique family dynamic that enhances everyone’s lives.
Flexible Housing Options
One of the standout features of ADUs is their flexibility. These units can serve various purposes depending on the family’s changing circumstances. When not occupied by family members, the ADU can be utilized as a valuable source of income. The housing shortage in California has driven up demand for rental properties, making ADUs an ideal option for both vacation and long-term rentals. This dual-purpose functionality allows the Sandwich generation to adapt to their evolving needs while generating extra funds to support their household.
Tiny Houses
For widowed or single individuals approaching retirement, moving into their Accessory Dwelling Unit (ADU) while renting out their primary house has become a smart financial strategy.
This innovative arrangement offers a two-fold advantage: first, it allows homeowners to downsize and maintain an independent yet manageable living space tailored to their needs; second, renting out the larger primary house generates a consistent stream of rental income.
We have witnessed clients move their children and grandchildren into the main house while they transition to the tiny house since they no longer need the extra space but want to maintain their own separate living area.
Man Cave or She Shed
If you find yourself with an empty nest and no need for rental income, the additional room in your ADU opens up endless possibilities. It’s like having a blank canvas waiting for your personal touch. Whether you envision a cozy “she shed” or a place to work away from the main house where your creativity can flourish, or an ultimate “man cave” for relaxation, the extra space becomes your sanctuary.
By providing additional space, privacy, and autonomy, accommodating boomerang kids, supporting elderly parents, and offering income opportunities, the Accessory Dwelling Unit emerges as a versatile and valuable solution for the Sandwich generation.
Some lenders offer specific home improvement loans that can be used for ADU construction. These loans often have favorable terms and interest rates. It’s important to consult with a tax professional to understand any limitations on mortgage interest deductions and property taxes if you decide to build an ADU.
To learn more, the California Department of Housing and Community Development offers a free handbook about building an ADU, including the most recent legislation. You can find it online at hcd.ca.gov.
Michelle C. Herting is a certified public accountant, an Accredited Business Valuator, and an Accredited Estate Planner. She specializes in succession planning, business valuations, and settling trusts.
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