Del Mar resident launches online tool to calculate benefits of building an ADU

Del Mar resident Rachel Olsen created a website to help prospective ADU builders calculate the financial benefits.
(Luke Harold)

As accessory dwelling units become a bigger piece of the puzzle to solving the statewide housing crisis, a Del Mar resident launched an online tool to help homeowners determine their potential return on investment if they build one.

“The financials are very compelling,” said Del Mar resident Rachel Olsen, who started the website to give prospective ADU builders an idea of how much an ADU can pay off over the years, relative to factors such as home value and rental income.

Olsen, a realtor, developed the website after she and her husband built and started renting out an ADU in the backyard of a house they bought in Oceanside, which they also rent out to other tenants. The ADUROI site allows potential builders to estimate the costs and eventual long-term payoff of an ADU by filling out a series of fields in a spreadsheet for values such as construction costs, down payment, monthly mortgage payments and taxes.

But there are other factors to consider; with an ADU comes the responsibility of screening prospective tenants, knowing the ins and outs of state and local housing laws, and all the other responsibilities of a landlord.

“Is this a lifestyle you can live with?” Olsen said of the factors to take into account beyond potential profits. “There are tradeoffs to everything.”

Facing new state-mandated requirements to add to the city’s housing stock, Del Mar City Council members have repeatedly mentioned more ADUs as one of the solutions.

The California Department of Housing and Community Development has required San Diego County to add about 171,000 new units as part of the Regional Housing Needs Assessment process, which is updated every eight years. The San Diego Association of Governments, which divided that number among the 18 cities and unincorporated area based on proximity to transit and jobs, assigned 163 to Del Mar.

As of the end of 2019, the city of Del Mar has received five applications for accessory dwelling units, including one that has been completed on the 600 block of Avenida Primavera, city records show. Three other applications have been approved by the city, including one on the 400 block of Luzon Avenue with a 30-year deed restriction to be a low-income rental. An application for a fifth ADU was submitted last September, the only ADU application the city received in 2019.

In 2017, the City Council approved ADU regulations, specifying their maximum size, the floor area ratio, parking requirements and other considerations. When the calendar turned to 2020, a series of new laws went into effect designed to streamline the ADU building process throughout the state.

“We’ve invested more in new housing than at any point in our history, and we have created powerful new tools to incentivize housing production,” Newsom said in a statement when he announced the housing bills he signed into law last October. “Now, we are removing some key local barriers to housing production.”