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Everything You Need to Know About Granny Flats

Learn the benefits of adding a granny flat to your property and what to consider before building one.

January 3, 2024

If you’re a homeowner in the U.S., chances are you’ve heard the term “granny flat.” Another term for Accessory Dwelling Units (ADUs) or backyard homes, granny flats have exploded in popularity in recent years – particularly in regions like the Bay Area, Los Angeles, San Diego, and Seattle. With the high cost of living in these areas, granny flats present a smart housing solution by allowing homeowners to add an additional unit to their property.

Despite their name, granny flats aren’t just beneficial for the elderly – they can be used for everything from housing family to renting out for additional income. Let’s learn more about granny flats and find out if they’re a good fit for your property.

What is a Granny Flat?

A granny flat, or an ADU, is a secondary living space built on the same property as the main residence. The term “granny flat” was originally coined because ADUs were commonly built for elderly parents or in-laws. While this use case is still common, granny flats are now mostly referred to as ADUs and have a wide range of uses.

Because ADUs are intended for long-term independent housing, they must have their own kitchen, bathroom, entrance, and sometimes, a dedicated parking space. Let’s get into the different types of granny flats you can build.

Types of Granny Flats

Starting with the basics, there are three types of granny flats: detached, attached, and conversion (i.e. an existing garage or basement that’s converted to an ADU).


Detached granny flats are standalone structures, typically located in the backyard of the property. These are favored by homeowners seeking more privacy between the main house and the granny flat.


An attached granny flat shares a wall or other type of structural connection to the main residence. These are ideal for properties that have limited yard space.


Conversion granny flats are built from an existing structure on the property. Garages are the most common type of conversion, but a basement or attic can also be converted.

Granny Flats vs Tiny Houses

Despite what many might think, granny flats and tiny houses are not the same. Both must have a bathroom, kitchen, and space for a bed, but the main difference lies in their placement.

In some municipalities, tiny houses are required to have wheels and must be registered with the DMV as a vehicle. However, these houses depreciate in value over time – so if long-term investment is your main goal, a granny flat is likely a better option for you. In short, a granny flat is a good fit if you’re looking for stability, while a tiny house is better suited for someone looking for mobility.

Some jurisdictions allow tiny homes to be built on a permanent foundation. So what makes them different from ADUs in this case? The difference lies in the fact that ADUs must be an accessory to a main residential structure, whereas tiny homes can be a stand-alone structure on a lot.

Five Reasons to Build a Granny Flat

Homeowners across the West Coast and beyond are realizing the value of adding a granny flat to their property. From making more room for family and creating a rental property for additional income to everything in between, here are some benefits of granny flats.

1. Increase your property value

As soon as construction is completed, your granny flat already proves to be a smart investment. Adding a granny flat to your property can increase your property value by 30% on average, depending on your location and the size and features of your unit. This figure will continue to increase over time as your property appreciates in value.

Want to see a real example? This 430 sq. ft. granny flat added $600,000 in value to a property in Berkeley, CA.

2. Generate rental income

If you’re looking for ways to generate passive income, a granny flat is an excellent option. We’ve seen countless homeowners rent out their granny flats, which also adds much-needed housing to our communities. Depending on where you live and the size of your unit, your granny flat can generate upwards of $2,500 a month.

It’s important to note that many municipalities do not allow short-term rental of granny flats (less than 30 days), so check your local ADU requirements to understand your city’s rental policy.

3. Flexible living space

In this era of remote work, extra space has become increasingly valuable – especially for families. Enter: granny flats. We’ve seen homeowners use their granny flats for everything from home offices to gyms and a space for hobbies. What’s more, granny flats are perfect for hosting visiting family and friends.

Check out how Cottage helped this San Jose family transform their backyard into a multi-functional living space with a granny flat for movie nights, work-from-home, and family hangouts.

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4. Multigenerational living

As the name suggests, granny flats are popular for housing elderly parents or relatives. They allow aging loved ones to be close by, while still providing an independent living space. Plus, granny flats provide an opportunity for grandparents to be closer to their grandchildren – which could allow them to assist with childcare.

Grandparents aren’t the only ones moving into these backyard homes. Many parents are building granny flats for their adult children to live in. It’s a win-win: the children have an independent living space while the homeowners add value to their property through an ADU. That’s exactly why this Los Altos family opted to add a stunning one-bedroom granny flat to their backyard. Once their kids fly the coop, the granny flat can serve as a versatile asset – either generating rental income or for the homeowners to downsize, bringing us to our next point.

5. Manageable space for empty-nesters

As homeowners age, they may find their home to be too large for their needs. With their children gone, the main home feels big and underutilized; plus, mobility can become challenging. This is where granny flats come in once again. Granny flats have become increasingly popular among older homeowners looking to downsize, like this happy homeowner in the Bay Area. Jocelyn wanted to age-in-place on her property, so she worked with Cottage to design and build her dream ADU. The granny flat even matches the style and interior of her main home!

Granny flats can also be equipped with ADA compliant features, like ramps, lower countertops, and no-threshold showers to ensure comfort in the long-run.

5 Factors to Consider Before Building a Granny Flat

1. Your intended use

Having a plan for how you’ll use your ADU is important because it will heavily influence your design. If a granny flat is built to house a family member who has trouble with mobility, the unit will benefit from an open floor plan and accessible features. On the other hand, a granny flat that serves as a rental unit should feature an entryway facing away from the main house for more privacy. Make sure to define what your use of your granny flat will be early on in the process so you can craft a design that matches your needs.

2. Budget and financing

Granny flats can cost anywhere between $200,000 and $400,000 depending on your location, lot characteristics, size, design, and more. From the start, you should have a budget in mind and work with a team of professionals to help you ensure your project can stay within that budget. At Cottage, we provide a free feasibility assessment and budget guidance to help you understand what’s possible on your property and estimate costs. There are a number of financing options available for your granny flat, from loans and refinancing opportunities to regional or state grant programs. Learn more about the ADU financing options available to you in our complete guide.

We know that flexibility is key for a big project like a granny flat. Our pay-as-you-go structure at Cottage lets you choose to move forward with your project at your own pace.

3. Your team of professionals

When building your granny flat, a key decision you’ll make is which professionals to work with on the design and construction of your ADU. For the design, you’ll want to choose an architect or architectural designer who has experience with ADUs and can help craft a unit that meets your needs and budget. On the construction side, partner with an experienced builder who has a track record of successful ADU projects.

Cottage saves you the effort of finding the right designer and builder. We connect you with an experienced architectural designer from our Design Studio and then get you multiple competitive bids from our Builder Network of vetted ADU contractors.

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4. Permitting

To build an ADU, you must acquire the necessary building permits from your city. This means you must submit a full permit set that includes drawings of your entire property, ADU design, utility plans, elevations, foundation drawings, and more.

Given the complexity of ADU permit requirements, it’s important to work with an architect or company like Cottage that understands the ins and outs of the permitting process. At Cottage, we manage the entire permitting process for you from start to finish and expedite your permit – speeding up the start of construction.

5. Local regulations

To obtain the necessary permits for your granny flat, your unit must adhere to your local ADU regulations. Check out our ADU Regulations guide to find your city’s ADU requirements and read on for an overview of California’s ADU regulations.

Regulations for Granny Flats in California

Zoning: Granny flats are permitted in any residential or mixed-use zone. This includes single and multi-family properties.

Size: All municipalities in California must allow granny flats of at least 800 sq. ft. or 1,000 sq. ft. for granny flats with more than one bedroom. Cities can pass ordinances that allow larger size limits, so check your municipality’s ADU requirements.

Height: Granny flats are permitted to be 16 ft. tall under any circumstance. Higher height limits are allowed under certain conditions, depending on the municipality.

Parking: Homeowners are not required to include off-street parking for granny flats if they meet any of the following requirements:

  • The property is located within half a mile walking distance of public transit.
  • The property flat is located within an architecturally or historically significant district.
  • The granny flat is a conversion of an existing accessory structure or a part of the main residence.
  • When on-street parking permits are required, but not offered to the occupant of the granny flat.
  • The property is located within one block from a car share vehicle.

Setbacks: In accordance with California state regulations, granny flats are permitted to have 4 ft. side and rear setbacks. Cities can pass ordinances that allow for different setback minimums. Conversion granny flats are not subject to setback and height regulations if the existing structure exceeds existing requirements.

Occupancy: Owner occupancy is not required for granny flats in California. However, junior accessory dwelling units (JADUs) do require owner occupancy.

Regulations for Granny Flats in Seattle

Minimum lot size: For a detached granny flat, properties must be at least 3,200 sq. ft., 25 ft. wide., and 70 ft. deep.

Occupancy: Occupancy cannot exceed eight occupants between the granny flat and the main house unless all residents are related.

Setbacks: Setback requirements depend on the type of granny flat.

  • Attached granny flats must follow existing setback requirements that apply to the primary residence.
  • Detached granny flats must maintain at least a 5 ft. side and rear distance from property lines and other existing structures on the property. However, if your lot borders a back alley, your detached granny flat can be built to the property line.
  • Detached granny flats built on a corner lot must be at least 10 ft. from property lines.
  • Parking: Adding off-street parking is not required for a granny flat. However, if existing off-street parking is lost as a result of the granny flat, that parking must be replaced elsewhere on the property.

Granny Flat Floor Plans

Ready to start your project? Good news: Cottage makes it easy to get started with our library of granny flat floor plans that can be customized to fit your needs. Browse dozens of floor plans varying in size, shape, and design. Then, work one-on-one with your Designer to tailor everything from the layout to your materials and finishes.

Design Your Granny Flat with Cottage

Granny flats are skyrocketing in popularity as homeowners realize the potential value of a backyard home. Cottage is here to help bring your granny flat to life with our streamlined process that gets you a custom design, multiple bids from vetted contractors, and a modern experience.

Book your free consultation today to jumpstart your granny flat project!


What is a granny flat?

A granny flat, most commonly known as an Accessory Dwelling Unit (ADU), is a secondary housing structure built on a property with an existing home.

Are granny flats legal in California?

Yes, granny flats are legal in California. In fact, California is one of the most progressive states in the country when it comes to granny flat regulations. Specific regulations around the number of ADUs allowed, unit size and height limits, setback requirements, and more vary across municipalities. Find your city’s requirements in our ADU Regulations guide. garage or a basement.

What is the difference between a granny flat and an ADU?

A granny flat and an ADU are the same thing. Both terms refer to a secondary living unit that is separate from the main residence and equipped with a kitchen, bathroom, and a permanent foundation.

What is the maximum size for a granny flat?

The maximum size for a granny flat in California is 800 sq. ft. However, municipalities can pass ordinances that allow larger sizes, such as 1,200 sq. ft. or 50% of the area of the primary residence. Learn more about the granny flat regulations in your municipality.

How much does it cost to build a granny flat in California?

On average, a granny flat can cost anywhere from $200,000 to $400,000, depending on the type of ADU, location, size, design, and other specifications. This cost is typically broken down by design, permitting fees, and construction.

Can you buy land and build a granny flat in California?

Yes, you can buy land and build a granny flat on any single or multi-family residential lot in California. If you are building on an empty lot, California allows for the main structure and granny flat to be built at the same time as long as all permits are approved.

What is the new law in California for ADUs in 2023?

California passed four ADU bills in 2023 that eased some of the restrictions that previously hindered projects. These new bills address front setbacks, permitting processes, height restrictions, and more.

Is a granny flat attached to a house?

A granny flat can be attached to the main house, but does not need to be. Granny flats can also be detached, whether they are a new structure or a conversion of an existing structure on the property.

How small can a granny flat be?

A granny flat can be no smaller than 150 sq. ft. Some municipalities may have higher minimum sizes, so make sure you review your local granny flat regulations.

What makes a good granny flat?

A good granny flat has a design that’s aligned with the homeowner’s plans for the unit, design vision, and budget. When designing a granny flat, it’s important to consider how to utilize space efficiently while adhering to local and state regulations. As experts in granny flat design, Cottage’s Designers are here to help you design the perfect granny flat for you.