While home buying is down, housing prices remain high as inventory remains low. This has caused a boom in the construction of Accessory Dwelling Units (ADUs). The state of California recently passed legislation that allows homeowners to build and sell ADUs on their own residential lots.
Mike McNamara, Samara CEO, joins Yahoo Finance to discuss how his business aims to capitalize on this phenomenon by building customized units for prospective buyers.
McNamara explains the soaring demand for ADUs: “Adding just the cost of the unit itself on to the backyard and be able to get full rental income is very attractive, and it almost creates an immediate free cash flow impact for many areas of California. So what California does is trying to stimulate this housing, more and more housing units. It’s affordable by nature because the units are smaller so they tend to rent for less or cost less to build, and so it appeals to many different customers. But the demand for these ADUs on the back of all of these law changes, since 2016 to now, has gone up right about 20x, and it’s currently the largest permit request for this form factor is the highest of any in California right now.”
#youtube #ADU #realestate
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