What is a Granny Flat? The Ultimate Guide to Granny Flats in 2022

May 23, 2022

Photo by Jed Owen on Unsplash

As increasingly more people reconsider longstanding ideas about housing, accessory dwelling units (ADUs), a.k.a. “granny flats,” are becoming more common. With these structures, you can add more living areas to your existing property for less money – and with less work – than buying a new home. Learn more below.

What is an ADU?

An accessory dwelling unit (ADU) is an independent housing unit built on the same lot as an existing property. It’s often a smaller home in your backyard, though sometimes, you can attach an ADU directly to your current home as well or convert a part of your home, such as a garage or a basement, into an ADU. That said, detached ADUs are typically easier to install on your property. They can be great for earning some extra rental income or accommodating family members. 

An ADU living space has a separate entrance, bathroom, and kitchen. That means whoever lives there won’t have to enter your existing single-family home for any reason. It’s a great way to coexist with other people on the same property while allowing for privacy.

Alternatively, if you’re not quite ready to open your property to newcomers, an ADU can make for ideal extra workspace or studio space. And when the time comes to sell your property, then your ADU will likely increase the value of your estate.

What is a granny flat?

A granny flat is basically just another term for an ADU – whether or not your parents or grandparents live there. It’s an attached or detached housing unit that’s perfect for one or two people. 

Why is it called a granny flat?

There’s a common misconception that ADUs and granny flats are different, that the latter is a subcategory of the former. In reality, they’re one and the same, but the latter is a more colloquial way of describing it. The term “granny flat” gets its name from the most common use of the space – to house aging parents or in-laws. 

The extensive history of granny flats somewhat explains the name too – their use dates back to the granny flat’s predecessor, the “dowager house.” This term referred to a separate house on an English or Scottish estate reserved for the dowager, which is the widow of the estate owner. The dowager moved into this house when the estate’s heir took over the main property. It was a courtesy to the dowager so she could be near family and continue living on familiar grounds. 

Though there’s been somewhat of a shift away from this multigenerational housing in the U.S., a granny flat is a great solution to maintaining separation from family members while also keeping older parents who need your care within arm’s reach.

Cute cabin on a hill
Photo by Luke Stackpoole on Unsplash

What are some other terms for granny flat?

“Granny flat” isn’t the only alternative name for ADUs. Other popular names include “granny pod,” “in-law suite,” “mother-in-law suite,” “granny annex,” “elder cottage,” “carriage house,” “backyard cottage,” “secondary unit,” and many more. These are just a few examples – if you encounter an unfamiliar name that you think refers to “ADU,” there’s a chance it might. That said, “granny flat” might be the most common alternative name.  

What are the types of granny flats?

There are some subcategories under the umbrella term of the granny flat. Below are the main forms your ADU can take – some are standalone, and others are attached to your home. 

  • Garage conversion. This style refers to transforming an existing garage structure into a granny flat. You can also use your garage conversion for anything else that your city and county permits allow, such as office space or a studio space for an artist.
  • Above the garage. For this granny flat, you’ll build on top of the existing, standalone garage instead of renovating what’s already there. The result is a granny flat separate from your garage so you won’t lose that vital space.
  • Basement or attic. These interior ADUs exist inside your home rather than attached to or behind it. It involves converting your basement or attic into a granny flat. Typically, the cost to build an interior ADU is more expensive if you go with the attic over the basement. The building process can also be more complex than starting from scratch with a detached ADU.
  • Standalone unit. This unit is a standard “detached ADU,” also referred to as a DADU. It’s a separate living space not part of any existing structures on your property. This freestanding unit is typically constructed in the backyard area of a property.

Specifications of a granny flat

A granny flat may be a studio unit or a one-bedroom unit. It will include a living area, an eat-in kitchen, and a bathroom as well. The average size in California is roughly 615 square feet, though some ADUs can be as small as 300 square feet. Rarely will you see granny flats of more than 1,400 square feet. 

If you’re indeed using a granny flat to house older family members, other specifications can include accessibility measures. These inclusions can mean a ramp for an entryway, a rail or seat in the shower, or other options to accommodate more specific needs. 

Key granny flat specifications:

  • Average size: 615 square feet
  • Typical minimum size: 300 sq. ft.
  • Typical maximum size: 1,400 sq. ft.
  • Can add accessibility features ideal for older inhabitants 

Legal facts for a granny flat: What you need to know

Lady Justice figurine
Photo by Tingey Injury Law Firm on Unsplash

If you go about building a granny flat without heeding building codes, permits, and other legal considerations, you could find yourself in trouble. Knowing some basic information about how to construct a granny flat can save you a headache down the line.  

Do I need a permit for a granny flat?

Yes, permitting is required to build any type of granny flat. If you live within your proper city limits, then you must heed your city’s building, planning, zoning, or other departments as dictated. Outside of a major city like Los Angeles or San Francisco, you’ll need to check with your municipality. You may also be subject to county or state guidelines, depending on where you live. You should check with officials – or hire an ADU company that knows the laws and the people who enforce them – before building. 

Do granny flats require planning permission?

In most cases, you’ll need permission from a planning board or similar government body to build your granny flat. That means you’ll often need authorization before launching construction or expansion projects, but not always. In 2020, California introduced legislation that lets you skip planning if your ADU is less than 800 square feet and under 16 feet tall. ADUs with four-foot rear and side setbacks can also skip planning. Other parameters may apply. 

How do I know if my property is zoned for a granny flat?

To determine whether your property is zoned for a granny flat, look at the above criteria. You can skip planning if you meet them. Otherwise, do your research and contact your local municipal planning department. There, you can often find key zoning information that’s relevant to your property. 

Alternatively, you can hire an ADU company like Spacial that specializes in zoning and permit research, not to mention actually building your granny flat. No matter which route you take, before doing your due diligence upfront, you’re investing in a smoother process for a successful build. 

How much space do you need for a granny flat?

The amount of space you need for your ADU is partially a preference. It’s also partially a reflection of what the ADU’s future inhabitants will need and the realities of the space confines in which you’re working. Several more concrete factors also play a part. 

For starters, “space” in an ADU context means the unit itself and the distance between the ADU and your primary dwelling, when working with a DADU. Government regulations often dictate the latter. 

Does a granny flat require a kitchen?

A granny should be a fully functioning home with a separate entrance and amenities that don’t require occupants to enter the main house. That means your granny flat needs a kitchen – the person living there shouldn’t have to enter yours for food. Plus, your local building codes likely require a kitchen, as a lack of a kitchen is often the line between a granny flat and a short-stay guest house. But these codes don’t say the kitchen has to be big – if you need to save space, you can likely install smaller appliances or build out a scaled-back kitchenette.

Can I convert my shed into a granny flat?

While you can technically convert a shed into a granny flat, doing so is ill-advised. For starters, most sheds aren’t big enough to comfortably house someone. Sheds also aren’t built for living in the first place, so their walls may not be large enough to support utilities and seismic features. Converting a shed into an ADU is like converting a sedan into a tractor – possible, but extremely expensive and likely to result in low quality. 

How do you set up a granny flat?

The easiest way to set up a granny flat with an experienced ADU design company that can handle the entire process from beginning to end. These companies can handle the permitting, planning, project management, construction, and furnishing aspects for your ADU, avoiding the need to find your own way through a sea of overwhelming and confusing options. With the right ADU partner, your granny flat has the potential to be ready in four to nine months. 

Spacial can be that partner if you’re building an ADU in the San Francisco Bay Area. We specialize in studio and one-bedroom ADUs, and we’ll do all the heavy lifting – quite literally, including craning your ADU into place – on your behalf. Plus, our offsite construction process eliminates the usual noise and hassle of backyard ADU assembly. We just drop your granny flat into place over the course of one day.

Living Room in Spacials Studio ADU
Photo by Spacial

Can I put two granny flats on my property?

The answer to this question depends on your municipality and the size of your property. If you’re considering building two units, then say so when you initially contact the proper municipal or county authorities. Sometimes – but not always – a local government that allows one granny flat will allow two. Several states and cities do allow the construction of two ADUs on a single property. Do your research, speak with the right people, or partner with the right team to find out what’s in the cards.

Financial facts about granny flats

Alongside legal ADU questions come financial concerns. After all, you should budget before you start building. Below, you’ll learn the average cost of ADU construction, whether granny flats can increase property taxes, and other key ADU financial considerations. 

Are granny flats worth it?

Yes! Granny flats are worth it, as long as you plan and budget for them properly. 

Granny flats can increase the value of your property and open an extra income line through property rentals. You can also use them to house your parents or grandparents right in your backyard. Or your granny flat can just be a guest house for when you have friends or family in town.

Determining whether granny flats are right for you requires lots of thinking, not to mention looking at your finances. Review all your options, and then decide from there if a granny flat is worth it both now and in the future. In theory, a granny flat has all kinds of uses, and with an ADU design team, you can easily set one up sooner than later. 

Does a granny flat add value to your home?

Yes! But how much value it adds depends on the housing market where you live. It also depends on the shape the housing market is in when you decide to sell. Overall, though, investing in an ADU makes your property more attractive and valuable. It increases your square footage and introduces the potential for additional rental income if a new buyer is looking to make extra money. 

All that said, granny flats may deter certain buyers who aren’t looking for extra space. To these buyers, the ADU might appear as another unit to maintain – a hassle instead of a perk. But as ADUs continue to rise in popularity, buyers are more likely to view them as pluses, not detriments. 

Does adding a granny flat increase property taxes?

A granny flat will increase your property taxes since it increases the value of your home. That’s true even before you get your home reassessed. As a simple example, a $150,000 ADU would add $150,000 to your property value. Your property taxes would increase accordingly. Speak to a CPA or another tax professional for more information. 

Can you rent a granny flat?

You can rent a granny flat, though some cities restrict the rent to occupants for longer than 30 days.  

How much does it cost to build a granny flat?

As with any home building project, the cost of your granny flat can vary. Your cost will primarily depend on how you go about the build and all the bells and whistles you’re looking to add. When considering cost, you’ll have to factor in location, the quality of your building materials, and ADU size. Naturally, a larger, granny flat in a more expensive region is going to cost more than a small ADU in an inexpensive area. 

To get a quote for your ADU, contact an ADU design firm. With Spacial, unit-only studios start at $139,000 ($376 per month on a 3.25% home equity line of credit). Unit-only one-bedrooms start at $157,000 ($425 per month on a 3.25% home equity line of credit).

Is a granny flat tax-deductible?

If you get your granny flat permitted as an income property, then in certain states, you can deduct any related expenses. You can also deduct the granny flat’s depreciation.

On the flip side, you’ll also have to claim any income that your ADU generates on your tax returns. While that’s not a concern in the nine states that don’t collect income tax, it’s paramount in certain ADU-heavy states such as California. It’s best to contact a tax professional to see if you can rent out your granny flat to lower your taxes. 

Is building a granny flat a good investment?

Enhancing your property is typically a great investment. Most lots of a certain size can legally and affordably fit ADUs. They contribute to your total square footage, create opportunities for passive income, and create space for other revenue-generating hobbies that you don’t have room for in your home. You can also think of your granny flat investment beyond the traditional sense of increasing your property value. Consider the savings on childcare from having a relative living in your ADU, or budget for revenue from renting out your granny flat.

Occasionally, though, your situation might make granny flats an imperfect investment. Perhaps the most pressing concern is whether it would be too expensive to prepare your lot for an ADU. For example, the process of installing a foundation on a lot with a steep incline might take extra work and money. That could lessen your return on investment.

The Spacial difference

It’s a lot easier to turn your granny flat idea into a reality when you have a dedicated partner. Spacial can be that helping hand at every step of the way – or, more accurately, we can do almost all the work for you.

We’ll measure your site and pursue city permits to determine if your home is zoned and viable for a granny flat. The units are fully complete on the inside, with everything from insulation, drywall, and kitchen appliances ready to go. And through our West Elm partnership, your granny flat will also be fully furnished, making the transition from installation to move-in especially quick.

Exterior of Spacial ADus
Photo by Spacial

We offer studios and one-bedrooms in custom colors, so you can meet homeowners association (HOA) requirements while sticking to your vision. Plus, our units are fixed-cost (though construction costs may vary), so you’ll know upfront how much your granny flat will cost you. And we’ll construct your unit offsite so you'll only have one day of loud backyard action as we crane your one-piece ADU into place.

Above all, we want to make sure Spacial fits your vision. If you don’t see what you need, talk to us – we know we can make it work. 

Let Spacial build your granny flat 

At Spacial, we ensure that every step of building your granny flat, from site inspection to installation, is a smooth process. To us, your property, time, and vision are as valuable as your home. It’s our mission to make expanding your space and your life as easy and quick as can be. Contact us today to learn how we can put you on a path toward the perfect granny flat