Federal housing finance research indicates that properties with ADUs in California tend to appraise at higher values compared to similar properties without ADUs. An analysis by the Federal Housing Finance Agency (FHFA) examining appraised values for California homes found that in 2013, the median appraised value for properties with ADUs was about $550,000, versus $405,000 for properties without ADUs. By 2023, the median values had risen to approximately $1,064,000 for properties with ADUs and $715,000 for those without, indicating a persistent value premium associated with ADU-equipped properties.
Within that research, Los Angeles County stands out as a leading ADU jurisdiction, with more than 45,000 ADUs permitted in the county cited in discussions of the state’s ADU expansion. This volume of permits reflects both strong homeowner demand and growing lender and appraiser familiarity with ADU configurations. The FHFA analysis suggests that ADUs can support higher valuations because they add rentable, code-compliant living space and may increase the property’s income potential.
Appraisal practice in this context typically involves recognizing the ADU as an additional dwelling unit contributing to overall gross living area and potential rental income, while still treating the property as a single real estate asset. Appraisers may use sales comparison, looking at similar homes with ADUs, or an income approach, where market rental data for ADUs are used to estimate contributory value. In Los Angeles County, where ADU rents are meaningful relative to underlying land values, this income potential is often a material component of value.
However, the exact premium varies by neighborhood, quality of construction, legality of the unit, and local demand for small rentals.