The Differences between Guest Houses & ADUs

Bay Area homeowners often seek additional property space to accommodate guests and family members or generate rental income. Guest houses and accessory dwelling units (ADUs) are two popular options for creating extra living space. While the terms are in use interchangeably, there are distinct differences between these two housing options.

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This article aims to highlight and compare the features of guest houses and ADUs, helping Bay Area homeowners make informed decisions regarding their property needs.

1. Definitions

A guest house, also known as a mother-in-law suite or granny flat, refers to a detached or semi-detached property structure providing self-contained living quarters. It typically includes a bedroom, bathroom, kitchenette, and living area. Guest houses are primarily intended for short-term visits and offer additional privacy for hosts and guests.

On the other hand, an accessory dwelling unit (ADU) is a secondary residential unit that is either attached or detached from the primary residence. ADUs are fully functional living spaces with entrances, kitchens, bathrooms, and sleeping facilities. Also, they are intended for long-term occupancy, and Bay Area homeowners can use them for accommodating family members, renting out, or as additional living space.

2. Permits and Regulations

Regarding obtaining permits and complying with regulations, some differences exist between guest houses and ADUs in the Bay Area. Guest houses, depending on their size and location, may need to adhere to zoning laws, building codes, and permit requirements. The regulations vary between cities, so homeowners must consult their local planning department to understand the requirements.

ADUs, on the other hand, have gained popularity as a means of addressing the housing crisis in the Bay Area. State legislation, like Senate Bill 1069 and Assembly Bill 2299, has been passed to make it easier for homeowners to build ADUs on their properties. ADUs often have specific sizes, setbacks, parking, and utility connection guidelines. However, qualifying for a streamlined permit process has made building ADUs more accessible for homeowners.

3. Size and Design

Guest houses and ADUs can differ in terms of size and design. Guest houses are typically smaller and range from a few hundred to a couple of thousand square feet. They may have a more traditional architectural style and can be designed to blend in with the primary residence.

ADUs, on the other hand, can vary in size, from compact studio apartments to multi-bedroom units. The design of ADUs can be more flexible, ranging from traditional to modern styles. ADUs often require adherence to design parameters to ensure compatibility with the existing neighborhood.

4. Intended Use and Flexibility

Guest houses are primarily designed for short-term accommodation and hosting guests. They offer additional privacy and convenience for both homeowners and visitors. Guest houses are ideal for accommodating friends and family during holidays or providing a comfortable space for guests seeking short stays.

ADUs, however, are designed for long-term use and offer more flexibility in their applications. Homeowners can use ADUs to accommodate extended family members, such as aging parents or adult children, providing them with separate yet connected living spaces. ADUs can also be rented to generate income or serve as a home office, art studio, or gym space.

5. Cost and Return on Investment

Regarding cost and potential return on investment, guest houses tend to be more expensive to install than ADUs. Guest houses often require additional construction, plumbing, and electrical work, which can increase the upfront costs significantly.

ADUs, in contrast, can be more cost effective to build, especially with recent changes in legislation making the permit process more streamlined. ADUs can provide a higher return on investment, as they can be rented out for long-term or short-term rental income. Further, ADUs can increase the overall value of the property.


In summary, while both guest houses and ADUs offer additional living space and can cater to the needs of Bay Area homeowners, there are notable differences between these two options. Guest houses are typically smaller, designed for short-term stays, and require adherence to specific local regulations. ADUs, on the other hand, are more flexible in terms of use, easier to obtain permits for and offer potential rental income opportunities. Homeowners should carefully consider their needs, budget, and local regulations to decide which option suits them best. Besides, we are available 24×7 to respond to your relevant queries.

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