Unlock Your Property’s Hidden Value: Multifamily ADU Additions

In today’s competitive real estate market, maximizing the revenue and value of your existing multifamily assets is paramount. For apartment building owners in California, a powerful and recently expanded opportunity lies dormant on your property: the addition of Accessory Dwelling Units (ADUs). Xtraunit is your expert partner in navigating this complex but highly lucrative process, turning underutilized space into new, rent-generating units.

The New Math of Density: How ADUs Add Value

Historically, the number of units on your property was capped by zoning regulations and density limits. Recent changes in California law have fundamentally altered this equation. Under California Government Code § 66314 (c), ADUs are not counted toward a property’s density calculation. This means even if your property is currently “maxed out” on its allowable number of units, you now have a legal pathway to add more, significantly increasing your door count and monthly cash flow.

At Xtraunit, we don’t just build ADUs; we provide a strategic service to unlock your property’s full financial potential.

Your Path to More Units: ADU Strategies for Multifamily Properties

California law provides two primary pathways for adding ADUs to existing apartment buildings. The right strategy depends on your property’s specific layout and your investment goals.

1. Detached ADUs: Building New Income Streams

(Under Senate Bill 1211)

This strategy is ideal for properties with available open space, such as underutilized yard areas or excess parking. You can construct brand-new, standalone units on your lot.

• Potential: You can add the same number of ADUs as there are existing units, up to a maximum of eight new detached ADUs.

• Flexibility: These units can be converted from existing detached structures (like garages) or be entirely new construction.

• Regulations: While these units are subject to standard lot coverage, setback, and floor area restrictions, a local agency can only limit them to a maximum of 800 sq ft, and many jurisdictions are more permissive.

2. Attached ADUs: Monetizing Unused Space

(Under Gov. Code, § 66323, subd. (a)(3)(A))

This strategy allows you to convert existing non-livable space within your apartment building into new, revenue-generating units. This is perfect for properties with large storage rooms, boiler rooms, or underutilized garages.

• Potential: You can add a minimum of one attached ADU, or up to 25% of the existing number of units, whichever is greater. This can lead to the largest increase in unit count.

• Key Limitation: These ADUs must be created from the conversion of existing non-livable space. New construction for attached ADUs is generally limited, though the City of Los Angeles allows for one newly constructed attached ADU under LAMC 12.22 A.33 (c) and (e)—a nuance our team expertly navigates.

The Xtraunit Advantage: Overcoming Development Hurdles

Adding ADUs is more than just construction; it’s about navigating a complex web of state and local regulations. This is where our expertise becomes your greatest asset.

Solving the Parking Problem

Parking is often the biggest barrier to adding units. However, state law provides powerful exemptions for multifamily ADUs.

• Under Gov. Code, § 66314, subd. (d)(10)(A), the maximum required parking is only one space per ADU, and tandem parking is acceptable.

• Crucially, many properties will require NO new parking. This requirement is often waived entirely for properties located within a one-half mile walking distance of a major transit stop—a definition that covers a vast portion of Los Angeles.

Your Expert Navigator

The rules are complex and vary between jurisdictions. Our team lives and breathes these codes. We conduct a thorough feasibility study on your property to determine the optimal strategy, identifying the maximum number of units you can add and charting the clearest path through design, permitting with LADBS, and construction.

Increase Revenue. Build Generational Value.

Adding ADUs to your multifamily property is one of the single most effective capital improvements you can make. You are not just adding square footage; you are creating new, independent income streams that will pay dividends for years to come.

• Boost Monthly Cash Flow: Each new ADU is a new revenue source.

• Increase Property Valuation: More units and higher net operating income directly translate to a significantly higher asset value.

• Attract and Retain Tenants: New, modern units make your entire property more desirable.

Ready to Unlock Your Property’s Potential?

The legislative landscape has opened a golden opportunity. Let the experts at Xtraunit show you how many units you can add to your property and what the return on your investment could be.