Considering an ADU to boost income or flexibility in Santa Monica? You’re not alone. With strong long-term rental demand and a city that supports ADUs, the upside can be compelling if you start with the right facts. In this guide, you’ll learn what is feasible on Westside lots, how much projects typically cost, how long they take, and what returns you might expect near Montana Avenue. Let’s dive in.
ADU basics in Santa Monica
Santa Monica permits accessory dwelling units and junior ADUs and offers a Preapproved Standard ADU Plans program that can shorten design and review time. You choose a preapproved plan, then complete a streamlined permit process with the City. Review the program steps and limits on the City’s page to see if your site fits.
- Learn about Santa Monica’s preapproved plans and submittal process on the City’s program page: Santa Monica Preapproved ADU Program.
Lot, size, and setback rules
Santa Monica’s development standards control where and how big you can build.
- Setbacks: side and rear setbacks are commonly 4 feet for ADUs, and many detached ADUs must be at least 6 feet from the main building. Confirm measurement rules with the City.
- Size: the code sets minimums and maximums. A minimum of 150 square feet applies, and typical maximums vary by bedroom count, percentage of the primary unit, and other limits. See the ADU sections of the municipal code for specifics: Santa Monica Municipal Code.
- Utilities and addressing: ADUs receive a separate address and go through standard building review, which can add time and cost. The City outlines these steps within its program materials.
Rental use rules you must know
Santa Monica’s Home‑Sharing Ordinance allows on-site hosted home sharing but generally prohibits un-hosted, short-term vacation rentals. A 2017 amendment also prevents newly constructed guesthouses or ADUs from being used only for short-term stays. In short, model your ADU as a long-term rental unless you have a verified exception. Review the policy here: City of Santa Monica home-sharing overview.
Property check near 1426 Montana Ave
ADUs are permitted only on parcels with a primary single-unit or multi-unit dwelling. If a parcel is commercial or primarily retail, an ADU is typically not allowed without a change of use or redevelopment into residential. Many properties along Montana Avenue include retail or mixed-use space, so verify zoning, parcel use, and any HOA or CC&R restrictions before you plan an ADU.
Start with a quick feasibility check: confirm your APN and zoning with the City, verify that the property is residential, and review setbacks and lot coverage against the code. For code references, see the ADU sections of the Santa Monica Municipal Code and the City’s ADU program page.
Costs and timelines to expect
Every site is unique, but Los Angeles area benchmarks can help you budget.
- Garage conversion: about $80,000 to $225,000
- Attached ADU: about $150,000 to $325,000
- Detached ADU: about $200,000 to $400,000 or more
- Per-square-foot mid-range estimates often land around $300 to $400-plus in 2025. Source ranges: ADU cost guide for Los Angeles.
Plan for soft costs that add up: surveying, soils and structural engineering, utility trenching, sewer and water connections, landscaping, and any required fire or accessibility upgrades. These can add tens of thousands depending on site conditions. A helpful planning tool: ADU soft cost considerations.
Timeline guidance:
- Scoping and design: 4 to 8 weeks or more (faster with preapproved plans)
- Plan check and permitting: 1 to 6 months or more
- Construction: 3 to 9 months or more
- Total project duration: often 6 to 18 months depending on complexity and revisions. See the City’s expedited track: Preapproved ADU Program.
Fee notes: ADUs larger than 750 square feet may trigger Public Works impact fees in Santa Monica, while smaller units can be exempt from some fees under state law. The City’s program materials explain how fees are assessed and when they are due.
Financing and incentives
California’s CalHFA ADU Grant Program has historically offered up to $40,000 for eligible owner-occupants to help with predevelopment and closing costs. Funding opens and pauses periodically, so confirm availability before you count on it. A good overview and status reference: CalHFA ADU Grant Program.
Local pilots and loan programs sometimes exist through counties or partner organizations. Program availability changes and many options are income-qualified. Check current offerings as part of your budgeting.
Returns near Montana Avenue
Long-term rents in the Wilshire/Montana area are strong. Data snapshots from 2024 to 2025 show studios often in the $2,000 to $3,000-plus range and one-bedrooms commonly in the $2,500 to $4,000-plus range depending on size, finishes, and amenities. Always verify fresh comps before you underwrite your project.
Baseline scenario example
- ADU type: detached 600 square feet, one bed and one bath
- Turnkey cost: $300,000 (about $500 per square foot in a premium market) with a conservative buffer. Industry ranges: LA ADU costs.
- Monthly rent: $3,000 (midpoint for a 1-bed near Montana Ave, confirm with current comps)
- Annual gross rent: $36,000
- Estimated operating and vacancy: 30 percent of gross
- Estimated NOI: $25,200
- Simple payback (no financing): $300,000 divided by $25,200 is about 11.9 years
Sensitivity: rent and cost shifts
- Conservative case: $2,700 monthly rent or a $325,000 build pushes simple payback closer to 13 to 14 years.
- Optimistic case: $3,500 monthly rent and tight cost control can reduce simple payback toward 9 to 10 years.
Note: If you use financing, early cash flow declines and payback lengthens. Run a lender-specific scenario for accuracy.
Value beyond cash flow
A permitted ADU often increases overall property value, though the uplift varies by buyer demand and financing. Some owners recover part of their cost at resale rather than purely through rent. For perspective on valuation thinking, see this discussion of ADU ROI dynamics: ADU return on investment overview.
Step-by-step checklist
- Verify zoning and current use. ADUs require a residential parcel with a single-unit or multi-unit dwelling. Start with the City’s ADU program page and confirm specifics in the municipal code.
- Confirm site constraints. Check setbacks, lot coverage, height, and potential distance from the primary structure.
- Choose a pathway. Compare a garage conversion, attached, or detached ADU. Preapproved plans can reduce design time and review cycles.
- Map fees and thresholds. ADUs over 750 square feet may owe Public Works impact fees. See the City’s process notes: Preapproved ADU Program.
- Price the full project. Gather at least two contractor bids and include soft costs and contingencies. Use industry ranges to sanity-check numbers: LA ADU costs and soft cost guide.
- Confirm rental rules and taxes. Short-term vacation rentals are generally prohibited for new ADUs, so underwrite long-term rent. Review the City’s policy: home-sharing and short-term rental rules. If relevant, check grant availability here: CalHFA ADU Grant Program.
Common pitfalls to avoid
- Assuming a commercial or mixed-use parcel can add an ADU without a change of use. ADUs require a residential dwelling on the lot.
- Counting on short-term rental income. Most new ADUs in Santa Monica must be rented long-term.
- Overlooking HOA or CC&R limits. Association rules can restrict construction or rental use.
- Missing impact fees for larger units. Crossing the 750 square foot threshold can add cost.
- Underbudgeting soft costs and utility upgrades. Trenching, sewer taps, and engineering can materially affect your total.
- Planning to sell the ADU separately without checking local rules. Santa Monica has specific conditions for condominiumizing an ADU. Review the code: Santa Monica Municipal Code.
Ready to explore your ADU options?
If you’re weighing an ADU on the Westside, local nuance matters. From verifying zoning and setbacks to underwriting long-term rent, a grounded plan will protect your budget and timeline. For a tailored assessment of your property and neighborhood comps near Montana Avenue, reach out to Janis Gabbert for local guidance and next steps.
FAQs
What ADUs are allowed in Santa Monica?
- Santa Monica permits ADUs and JADUs with ministerial review that follows local standards for size, height, setbacks, and utilities. Start with the City’s page: Preapproved ADU Program and confirm details in the municipal code.
Can I add an ADU to a commercial property on Montana Avenue?
- Only parcels with a primary single-unit or multi-unit residential dwelling can add an ADU. If a parcel is commercial or retail, you would need a change of use or redevelopment. Confirm zoning with the City.
How long does the ADU process take with preapproved plans?
- Many projects still run 6 to 18 months from scoping to completion, but preapproved plans can shorten design and plan check time. See the City’s process: Preapproved ADU Program.
Are short-term rentals allowed in new Santa Monica ADUs?
- Generally no. The City’s ordinance restricts vacation rentals in new ADUs and allows only hosted home sharing with the owner present. Review policy details: home-sharing rules.
How much does a 600 square foot ADU cost locally?
- A mid-range 600 square foot detached unit often pencils around $200,000 to $400,000-plus depending on site and finish level. See LA ranges: ADU cost guide.
Do ADUs over 750 square feet pay impact fees in Santa Monica?
- They may. Public Works impact fees can apply to larger ADUs. The City’s program materials outline applicable fees and when they are assessed: Preapproved ADU Program.
Can I sell my ADU separately as a condo in Santa Monica?
- The City has adopted rules that can allow separate sale in specific cases. Review the relevant provisions and conditions in the Santa Monica Municipal Code.
