Cottage ADU Impact Report: California Demand for ADUs Outpaces Build Completion Rate

Cottage's first annual ADU Impact Report reveals 66% of submitted ADU permits never result in a completed unit

SAN FRANCISCO, Feb. 7, 2023 /PRNewswire/ -- Cottage, the company redefining the residential design-build process by uniting homeowners and contractors to build Accessory Dwelling Units (ADUs), today released its 2022 ADU Impact Report, which found the number of ADUs built in California is not keeping pace with increasing homeowner demand in the state.

California is facing a housing crisis with an estimated one million unit housing deficit. While California saw a 3% year-over-year increase in the number of ADU permit applications filed in 2022, local municipalities and contractors have not kept up with market demand. The ADU Impact Report uncovered that for every three ADU permits submitted in 2021, only one had resulted in a completed dwelling by the end of 2022. Additionally, the study found that if all ADU permits submitted across California in 2022 had been approved and built, the state could have created 50% more homes.  

According to Renofi, 50% of homeowners found it difficult to build their ADUs to their city or county's development standards. Many people struggle with the length and complexity of the permitting process and feel like their jurisdictions impose unnecessary red tape in the permitting process. In an unpredictable industry, current homeowners and hopeful buyers face a myriad of challenges at almost every stage of the building process. In a 2022 survey of California homeowners, Cottage found that ADU projects are also abandoned due to other circumstances, including lack of financing, budget constraints, and/or site conditions.

While California recently implemented grants of up to $40,000 for low- to moderate-income Californians looking to build ADUs, the agency overseeing the program announced funds for the program had exhausted completely in late 2022 due to popular demand.

"What we're seeing is a major disconnect between homeowners and local regulators. Local requirements for ADUs are complex and have changed significantly over the past few years. Even well-researched homeowners with renovation experience struggle to navigate the permitting and build," said Alex Czarnecki, Founder, and CEO of Cottage. "ADUs are a growing, natural solution to the ongoing housing crisis that will create a major impact across the state. For this to happen, homeowners need to understand local ADU regulations and permitting, but they don't have to do it alone. Cottage's main objective is to help homeowners through this process so they can focus on the design and get their ADU over that finish line."

Since the company's launch in 2020, Cottage has added hundreds of homes to local communities and has seen a 350% increase in YoY demand. In a homeowner survey conducted by Cottage in 2022, 68% of respondents said they want to build an ADU to increase the overall value of their property, 57% want to create additional rental income, and 47% want to create a permanent residence for a family member. Cottage has noted homes with ADUs can have a 50% return or more on investment compared to homes without an ADU.

In the last three years, Cottage has created over 1,000 jobs for contractors and designers in 100 cities across California and has generated $75 million in business for local designers and contractors. Cottage guides homeowners from idea to move-in-ready home, including feasibility, design, permitting, and construction, allowing homeowners to enjoy the creative parts of the project without the hassle and stress.

To access the full data report, which highlights California demand across major cities, ADU legislation across the country, and what homeowners need to know, please visit https://cotta.ge/resources/california-adu-report.

About Cottage
Cottage is an Accessory Dwelling Unit (ADU) platform committed to providing homeowners with the easiest process to build additional housing. Made up of architects, builders, and technologists, Cottage leverages its expertise in every step of the design and build process to build ADUs faster and more transparently, while simultaneously maintaining the highest standards for customization and quality.

After launching in 2019, Cottage has quickly become the go-to custom ADU option for California homeowners, working with homeowners in over 100 cities to create the Cottage of their dreams.

Media Contact:
BAM for Cottage
[email protected]

SOURCE Cottage