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Can I Build an ADU or JADU In My Backyard for Short-Term Rentals?

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Over the last decade, certain nonprofits, research institutes and local and state governments across the US have encouraged construction of ADUs and JADUs. The primary goal of city and state governments that have recently passed pro-ADU legislation is to alleviate their housing crises by providing additional long term rental units on existing residential lots. In some states, homeowners can build multiple accessory dwelling units on properties that were previously residentially zoned. For example, California Governor Gavin Newsom signed Senate Bill 9 late last year. In doing so, he allowed homeowners to build as many as four housing units in residential neighborhoods of California. Cramped West Coast cities like San Francisco, Los Angeles, Portland and Seattle have led the ADU movement. East Coast cities like Boston have started loosening ADU regulations in recent years, but still lag behind their West Coast peers. Like LA and San Francisco, Boston hopes to add affordable housing in the form of long term rentals by legalizing ADUs. However, many property owners across Boston, San Francisco and Los Angeles have turned their ADUs and JADUs into short-term rentals and vacation rentals instead. Citing fair housing regulations and recent legislation, cities like Los Angeles have effectively banned ADU short term rentals in response. In this post, we define ADUs and JADUs. We also take a look at local laws in Boston, Los Angeles and the San Francisco Bay Area. Many neighborhoods in these cities encourage each property owner with an ADU to prioritize long term tenants.

Understanding the Difference Between ADUs and JADUs

An ADU is an “accessory dwelling unit,” which might also be called a “granny flat,” “secondary unit,” “backyard cottage” or “owner-adjacent unit” depending on where you live. As the name suggests, ADUs are built as secondary structures — often as a vacation rental, short-term rental or guest house — on a lot that already hosts a single family home or duplex. To be considered legal, ADUs usually require a permit and certificate of occupancy. An ADU is typically smaller than the property’s existing single-family home. In some areas of the country, ADUs can be built in neighborhoods that are residentially zoned.

Depending on the homeowner’s needs, an ADU could provide consistent income from a long term tenant, rental income from many short term visitors or a place for caregivers, adult children or elderly parents. Different types of ADUs include basement conversions, attached ADUs, detached ADUs, garage conversions, second story ADUs and other type of detached conversions — i.e. conversion of a carriage house or other outbuilding.

JADUs are “junior accessory dwelling units.” These units are much smaller than ADUs and are always attached to the primary dwelling unit. According to the City of San Mateo California resource “Accessory Dwelling Unit Information and Resources,” a JADU “is an additional, independent living unit created through the conversion of an existing legally permitted bedroom in a single-family dwelling.” Some cities only allow JADUs or attached ADUs and do not allow detached ADUs.

Typical ADU and JADU Requirements

Though requirements vary from state to state and city to city, there are a few that remain relatively constant across most jurisdictions. For example, a JADU is typically no larger than 500 square feet, while an ADU is typically no less than 500 but no more than 1,200 square feet in size. Cities often restrict ADUs to a maximum size of 50% of the primary residence’s square footage. According to the California Department of Housing and Community Development, JADUs “must have cooking facilities, including a sink, but [are] not required to have a private bathroom.”

While local governments often require extra on-site or street-side parking for ADUs, extra parking is rarely required for JADUs. Owner occupancy is typically required for both JADUs and ADUs. Neither ADUs nor JADUs can be sold independently of the single family home next to which they were built unless they meet the requirements outlined by local subdivision laws. Setback rules are also common when building ADUs.

Tiny Houses and RVs as ADUs

In general, tiny houses and sheds are not considered ADUs in most cities. In his article “What to know about ADUs in Los Angeles” for Curbed LA, Elijah Chiland explains. According to Chiland, “the airstream trailer in your backyard is not an ADU.” In California, ADUs do not “include recreational vehicles like campers and RVs—at least not yet.” Los Angeles city officials are currently workshopping standards “for a new category of dwelling called ‘moveable tiny houses.'”

As of 2022, “these residences on wheels cannot be permitted as ADUs.” Some local governments along the Central Coast of California and in Oregon have already legalized tiny homes as accessory dwelling units over the last couple years. These include San Luis Obispo and Portland. ADUs and JADUs were once prohibited in cities like Los Angeles, San Francisco and Boston.

ADUs in Gated Communities and Neighborhoods Subject to HOAs

Gated communities and other neighborhoods subject to homeowners’ associations (HOAs) tend to restrict construction of ADUs and JADUS. HOAs often cite privacy and security concerns when crafting rules designed to limit short term rentals and long term rentals in gated communities. While states like Massachusetts might not have clear legislation regarding ADU and JADU restrictions in gated communities, California has addressed this issue. Benjamin Donel explains in his article “California’s New Accessory Dwelling Units Laws: What You Should Know” for Forbes.

Donel writes that AB-670 changed legislation surrounding ADUs and JADUs constructed in gated communities and other secured neighborhoods. According to Donel, AB-670 “makes it easier for people within HOA complexes to construct ADUs.” The bill “prevents banning or unreasonably restricting on single-family lots on the construction of these units.” This means that the CCRs outlined by many HOAs might not be able to “prevent people from building ADUs” in the future. Donel notes that “HOAs will likely challenge this bill…in court.” For now, however, property owners who live in “an HOA complex with single-family homes…can construct an ADU.”

Why Cities Across the US Are Legalizing ADUs and JADUs

Over the last five years, states from coast to coast have changed their legislation to allow ADUs and JADUs. According to a resource released by AARP and Orange Splot LLC, “California required all of its cities and counties to allow ADUs so long as the property owner secured a building permit” in 2017. Also in 2017 — but on the East Coast — New Hampshire demanded that local zoning codes “allow ADUs nearly everywhere single-family housing was permitted.”

Cities that have legalized and often encouraged ADU construction cite the need for more affordable housing in expensive but crowded suburban and urban areas. Some cities have offered legal help, permitting expedition, low-interest loans and grants for homeowners hoping to build ADUs in their backyards. In California, these pilot programs were intended to boost availability of affordable housing — sometimes with the goal of helping unhoused Californians escape homelessness.

Others encourage homeowners to build ADUs for the elderly. For example, the AARP and Orange Splot LLC resource “The ABCs of ADUs: A guide to Accessory Dwelling Units and how they expand housing options for people of all ages” identifies a program from the Monterey Bay affiliate of Habitat for Humanity and the City of Santa Cruz. Called “My House My Home: A Partnership for Aging-in-Place,” this Central California pilot program builds ADUs “so older homeowners can downsize into a new, aging-friendlier home and earn rental income from their original house.” It also allows seniors to continue living in their current homes while renting out their new ADUs.

Short Term Rental Regulations in Boston, LA and San Francisco

As mentioned above, many cities across the US regulate if and how a property manager or homeowner can use their ADU or JADU as a rental unit for additional income. While some cities encourage homeowners to use their ADUs for consistent rental income from long term tenants, others explicitly ban short term rentals hosted on sites like Airbnb and VRBO. Below, we explain if and how homeowners in LA, SF and Boston can use their ADUs as short term rentals. We also note which neighborhoods require homeowners to use their ADU as a long term rental. Some do require that homeowners use their ADU unit long term, with leases exceeding 30 days. Follow below to learn more.

Can You Use an Accessory Dwelling Unit for Short Term Rentals in San Francisco?

As mentioned above, California Governor Gavin Newsom recently signed Senate Bill 9. Senate Bill 9 allows homeowners in residentially zoned neighborhoods to build as many as four units on their properties as long as lot size allows and building codes are followed. The same bill tamped down on use of ADUs as short-term rentals. 

Maggie Angst explains in her September 2021 article “What California’s new SB9 housing law means for single-family zoning in your neighborhood” for The Mercury News. According to Angst, “any unit created as a result of the law cannot be used for short-term rentals.” Instead, units created under SB9 must be long term rentals, meaning “they must be rented for a term longer than 30 days.” Furthermore, “any new units created under SB 9 must only be used for residential purposes” and cannot be used for commercial activities. 

Local regulations in San Francisco are even more stringent than the statewide laws. The city bans short-term rentals in ADUs built before Senate Bill 9 was passed. According to the San Francisco Planning Department, “legally established Accessory Dwelling Units (ADUs)…[are] ineligible for short-term rentals.” San Francisco has the same primary residence requirements as Los Angeles, which makes most ADUs ineligible for anything other than long term rental use.

According to Airbnb, in order to register a short-term rental listing in SF, “you must live there for at least 275 days per year (or, if you haven’t lived there for a full year, 75% of the days you have occupied the unit).” As the Planning Department resource puts it, “short-term rentals hosts must live in the same individual dwelling unit, so they could not reside in the main unit and utilize the [units] for short-term rentals (or vice versa).” 

Other Short-Term Rental Requirements in San Francisco

In general, San Francisco makes hosting short term rentals fairly difficult. For example, only permanent residents are allowed to register units for short term rental use. In his article “Overview of Airbnb Laws in San Francisco” for NOLO, Stephen Fishman, J.D. lists additional requirements. Fishman writes that all supplemental income from short term rentals is also subject to a “14% San Francisco hotel tax–called the ‘Transient Occupancy Tax.’” Hosts must pay annual taxes and renew their permits each year. 

Can You Use an ADU As a Short-Term Rental in Los Angeles?

In general, Los Angeles homeowners cannot use ADUs as short-term rentals, vacation rentals or unhosted rentals for periods less than thirty days as defined by the city’s Home Sharing Ordinance (CF 14-1635-S2). According to Airbnb, “home sharing is permitted in Los Angeles if your listing is your primary residence,” which most ADUs and JADUs are not. In addition to the primary residence requirement, “hosts are required to register with the city and post their permit number on their listing, or claim a valid reason for exemption, in order to comply with the ordinance.” The short-term rental platform notes that “listings without a permit number or exemption posted will be blocked from hosting short-term stays” as Airbnb rentals.

According to the City of LA resource “Home-Sharing Ordinance: Background & Frequently Asked Questions,” Los Angeles adopted this ordinance in 2018 and instituted it in 2019. The Home-Sharing Ordinance “established a legal process whereby residents may be authorized to rent their primary residence to short-term visitors.'” The city resource notes that any property listed as a short-term rental “must be the host’s primary residence, where they live for more than six months out of the year” and must be “approved for residential use.” This means that home-sharing in LA is not legal when the listed property is “a vehicle parked on the property, storage shed, trailer, temporary structure, or other structure not built for residential use.”

Los Angeles residents who currently use an ADU as their primary residence might be legally allowed to use that unit as a short-term rental when out of town on vacation or for some other reason. Residents must provide proof of primary residency each time they apply for and renew their permits. Those who do qualify must meet requirements outlined by Olivia Livingston in her May 2021 post “Short Term Rental Regulations in the City of Los Angeles” for Ontario-based property management company Guestable. In order to use their ADU legally, hosts must register for “a Home-sharing permit…only register one property per city at a time” and display the registration number on all listings. Even if they meet all other requirements, ADUs in areas that are subject to LA’s “Rent Stabilization Ordinance (RSO)…[are] not eligible for home-sharing.”

Penalties for Los Angelenos Who Use ADUs as Illegal Short-Term Rentals

Just as cities have different requirements for short-term rentals and long-term rentals, they also have different penalties for failure to adhere to those requirements. In Los Angeles, thousands of ADUs and other units have operated as illegal short-term rental units over the last few years. In their 2020 article “Thousands of online listings are violating L.A.’s new short-term rental law” for The Los Angeles Times, Emily Alpert Reyes and Ben Poston explain. As of 2020, Poston and Reyes note that “thousands of illegal rentals [were] still being advertised online…and only a fraction [had] been penalized with fines.”

An LA Times analysis found “nearly 5,000 Airbnb listings for short-term rentals in Los Angeles [that] lacked city registration numbers.” The city estimates more than 6,000 LA listings listings on Airbnb and other platforms are illegal. According to Poston and Reyes, this amounts to “roughly 42% of active listings on all platforms in Los Angeles.” Most violations are centered in Hollywood, Venice and Downtown LA. While the city has not penalized platforms like Airbnb and VRBO, the city has penalized individual property owners. Penalties issued to homeowners include sending warning letters and issuing “more than 650 citations to rental hosts, imposing one-time fines of $500 each.”

Can You Use an ADU for Short-Term Rentals in Boston?

At Torii, we also help homeowners and prospective home buyers in the Greater Boston Area, so we have included short-term rental requirements from Massachusetts’ City on the Hill as well. Like other East Coast cities, Boston has been slow to allow construction of ADUs in residentially zoned neighborhoods. In recent years, however, local and state officials have launched pilot programs to guide and encourage homeowners hoping to build ADUs on their properties. Recent changes to state law include the Housing Choice Law of 2020 and the Boston Additional Dwelling Unit 18-month Pilot Policy of 2017. That program was amended and then extended two years later. Though the pilot program is still operating in 2022, only homeowners in Mattapan, Dorchester, Roslindale and Jamaica Plain are eligible.

In their article “Accessory Dwelling Units – Part of the Housing Crisis Solution?” for ​​nonprofit MassLandlords, ​​Eric Weld and Nomer Caceres elaborate on how policy has changed. Weld and Caceres write that “Accessory Dwelling Units (ADUs) have become easier to develop and build in Massachusetts, thanks to zoning change regulations passed as part of the state’s housing choice legislation in January 2021.” Newly passed legislation allows for a “lower voting threshold” when amending local ordinances related to residential, commercial and mixed use zoning laws. Removing this barrier means that “municipalities may now be able to pass ADU-friendly zoning that they couldn’t have managed before.” 

Which Cities in the Greater Boston Area Allow ADUs?

As of 2021, however, “the majority of cities and towns in the Greater Boston region [continue to] restrict development of ADUs.” Referencing a survey conducted by the Pioneer Institute on Public Policy, Weld and Caceres note that “of the 37 communities that allow ADUs, only 2.5 are built per year.” Greater Boston Area cities and towns that currently allow ADUs include Medfield, Lexington, Cambridge, Lincoln, Newton and Concord. Of course, there are dozens of other municipalities in the Greater Boston Area that do not permit ADUs. 

Most of the towns that do allow ADUs restrict their design, location and use. For example, most cities that allow ADUs require that the owner occupy the home or accessory unit, that the unit not exceed a certain size and that there are both adequate parking and appropriate setbacks. Though few cities in the Greater Boston Area outright ban short-term rentals in ADUs, some do.Newton specifically notes in its ADU regulations that short term rentals are not allowed and that the minimum rental term is 30 days. Others allow homeowners to use their ADUs as short-term rentals as long as certain criteria are met.

Short-Term Rental Eligibility in Boston Neighborhoods That Allow ADUs

Like San Francisco and Los Angeles, there are a few loopholes in local and state laws that allow homeowners to use their ADUs as short-term rentals. This resource from the City of Boston government explains. According to the City of Boston, “Boston’s Short-Term Rental (STR) program allows the renting of residential units for less than twenty-eight (28) days for a fee.” Similar to LA, Boston only allows short term rentals in “owner-occupied condominiums, single-family, two-family, and three-family buildings.” Limited share units, home share units and owner-adjacent units can all be listed as short-term rental units as long as the local government permits. ADUs could be considered either home-share or owner-adjacent units, as long as they represent the owner’s primary residence.  

Requirements and Penalties for ADUs Used As Illegal Short Term Units in Boston

According to Airbnb, short term rental hosts must register “as a short-term rental operator” in both the city of Boston and the state of Massachusetts. They must also apply for a license and a business certificate. Lastly, property owners must notify neighbors that they intend to use their unit as a short-term rental. It is unclear if there is a period of public comment.

Owners of illegal short-term rental units in Boston are subject to heavy fines levied by the city, as are listing sites like Airbnb and VRBO. In the 2020 article “If It Seems Like There Are Fewer Airbnb Listings In Boston, That’s Because There Are” for WBUR.org, Zeninjor Enwemeka explains. According to Enwemeka, “Boston has issued 367 fines totaling $90,200 since the short-term rental ordinance went into effect” in 2019.

Still Unsure If Your ADU Qualifies?

If you are still unsure if your ADU can be used as a short-term rental in Boston, Los Angeles or the Bay Area, reach out to our team of agents. Our agents can provide you with all the information you need.