How Accessory Dwelling Units are evolving—and what it means for Bay Area homeowners and buyers
If you’ve been thinking about building an ADU—or buying a home with one—you’re not alone. The momentum behind Accessory Dwelling Units continues to grow in 2025, and I’m seeing more clients across San Jose, Campbell, Mountain View, Los Gatos, and the Peninsula ask how they can use an ADU to create more space, flexibility, or income.
ADUs are no longer just backyard cottages—they’re modern, energy-efficient, and designed for the way we live now. Whether you’re a homeowner, investor, or multigenerational family, here are 10 ADU trends shaping the market this year—along with practical takeaways to help you plan smart.
1. Streamlined Permits and Faster Approvals
Thanks to California laws like AB 2221, SB 13, and AB 68, building an ADU is now faster and simpler. Cities are required to process permits more quickly, many zoning restrictions have been lifted, and minimum parking requirements have been waived in some areas.
You can now build on more types of lots—including those once considered ineligible.
đź”— San Jose ADU Resource Center
đź”— Santa Clara County Pre-Approved ADU Plans
2. Demand Is Surging Across California
In 2023, over 26,900 ADUs were permitted in California, including more than 2,700 in the Bay Area—more than double the number in 2020. Early data shows that 2025 is on track for another 10%+ increase in new ADUs.
With relaxed permitting, easier financing, and rising home prices, ADUs are becoming a go-to solution for affordable housing, rental income, or creating a flexible multigenerational setup.
If you’ve looked at the ADU rules before and felt overwhelmed, it’s worth revisiting. The team at Samara recently broke down the differences between the 2022 and 2025 California ADU handbooks, highlighting what’s changed and how those changes make it easier to build. The updates include faster timelines, fewer zoning restrictions, more flexible setbacks, and expanded eligibility for previously excluded properties. These reforms open up opportunities for more Bay Area homeowners—especially those who were previously told their lot “wouldn’t work” for an ADU.
3. Sustainable, All-Electric ADUs Are the New Norm
Energy-efficient ADUs are on the rise. Think solar panels, heat pumps, all-electric appliances, rainwater systems, and even green roofs. Many cities now encourage or incentivize eco-conscious builds.
These features aren’t just good for the planet—they lower utility costs and increase resale value.
4. Smart Home Tech Meets Small-Space Living
ADUs in 2025 aren’t just modern—they’re smart. From voice-controlled lighting and AI-powered thermostats to integrated security systems and remote monitoring, today’s ADUs are more intuitive than ever.
Brands like Google, Apple, Amazon, and Honeywell are bringing powerful automation tools to smaller spaces, making ADUs feel like high-end homes in miniature.
5. Flexible, Multifunctional Layouts
Today’s ADUs are designed to adapt—whether you’re working from home, hosting guests, or creating a personal wellness space. Many homeowners are now using fold-away furniture, moveable partitions, and dual-purpose areas to maximize every inch.
Whether you need a gym, art studio, guest suite, or quiet office, one well-designed ADU can do it all.
6. Larger Units with Pre-Approved Plans
Thanks to AB 1332, cities and counties will now publish pre-approved ADU designs online starting in 2025. That means less guesswork, lower design costs, and faster approvals for homeowners.
This trend also includes larger ADUs with better open-concept layouts, vaulted ceilings, and smart flow between rooms.
7. Multigenerational Living Is Booming
As families look for ways to stay close while keeping independence, ADUs have become the perfect solution. With private kitchens, bathrooms, and entrances, ADUs allow parents, grandparents, or adult children to live nearby without feeling cramped.
This setup is especially popular in cities like Los Gatos, Cupertino, and Menlo Park, where home prices make multigenerational options even more valuable.
8. Shared Ownership & Co-Living Models
With housing affordability still a challenge, more buyers are teaming up to co-purchase properties and build ADUs—either as rental units or primary living spaces. I’m seeing this trend grow among friends, siblings, and even adult children investing with their parents.
Shared ownership with an ADU on-site provides flexibility and long-term wealth-building potential.
9. Sleek Modern Design: Mono-Pitched Roofs
Mono-pitched roofs are quickly becoming a favorite for ADU construction. They offer a sleek, modern aesthetic—and function too: vaulted ceilings, more usable interior space, and ideal conditions for solar panel installation.
If you're aiming for net-zero energy or just want that high-design look, this trend is worth exploring.
10. ADUs as Wellness Retreats
One of the more unexpected trends in 2025? Turning ADUs into personal wellness spaces. Homeowners are adding saunas, spa-style baths, air filtration systems, and smart lighting to support relaxation and wellbeing.
If you’ve dreamed of a peaceful retreat right in your backyard, this may be the year to build it.
What Does It Cost to Build an ADU—and What’s the Return?
In the Bay Area, building an ADU typically costs between $150,000 and $350,000, depending on size, layout, and finish level. Garage conversions tend to fall on the lower end, while detached 1- or 2-bedroom units with premium features land at the higher end. While the investment is significant, the return can be substantial—especially in cities like San Jose, Mountain View, and Los Gatos, where rental demand remains strong.
Here's a quick look at average ADU build costs and income potential in 2025:
ADUs Build More Than Space—They Build Value
In case you need one more reason to explore the ADU route: According to the FHFA, homes in California with ADUs consistently receive higher appraised values than comparable properties without one. That means you're not just adding square footage—you're building equity.
Let’s Explore What’s Possible
Whether you're planning to build, buy, or sell a home with an ADU, I’ll help you navigate city regulations, connect you with trusted ADU builders, estimate ROI, and time your decision right.
Call or text me at (408) 649‑8351
Or schedule a time to chat on my Calendar
Helpful Resources:
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San Jose ADU Resource Center
https://www.sanjoseca.gov/your-government/departments/planning-building-code-enforcement/accessory-dwelling-units-adu -
Santa Clara County Pre‑Approved ADU Plans
https://plandev.santaclaracounty.gov -
Zillow: What Is an ADU?
https://www.zillow.com/learn/how-to-build-accessory-dwelling-unit-adu/ -
Realtor.com: Is It Worth It? Adding an Accessory Dwelling Unit
https://www.realtor.com/living/pro-tips/is-it-worth-it-adding-an-accessory-dwelling-unit/ -
California ADU Guidebook – HCD PDF
https://www.hcd.ca.gov/sites/default/files/2023-03/ADU-Handbook-Update-2022.pdf -
FHFA: Trends in Median Appraised Value for Properties With ADUs
https://www.fhfa.gov/blog/statistics/trends-in-median-appraised-value-for-properties-with-accessory-dwelling-units-in-california
