ADU Success: California Homeowner Builds Rental Cottage

How One Homeowner Solved California's Housing Crisis in 528 Sq Ft

Elaine Yang bought a home in California and built an accessory dwelling unit (ADU) on her property. Her 528-square-foot, one-bedroom cottage sits in her backyard and rents for $3,000 (about €2,550) a month. Yang sees her separate living unit as a small-scale solution to the housing shortage in the state.

I never thought I'd own a house. I just crossed my fingers that I'd be able to retire someday. For most of my adult life, I lived in a single room—probably about 120 square feet—with a shelf in the kitchen and a bathroom I shared with several people. Every time I looked at apartments, the costs were so high that I'd end up sticking with my room.

So the idea of buying a house seemed out of reach. But when my parents moved from Taiwan to the U.S. in the 1960s, they learned how to invest in real estate. They taught my siblings how to do it and wondered why I wasn't following their lead.

When I first started working, I didn't earn much, so I kept putting the idea aside. But my parents never stopped asking. As my career stabilized, I began thinking about renting an apartment. Then I thought, Well, what would it be like to buy a house?

Building an ADU wasn't originally my idea—my parents have big dreams. They said, "You have a house. Why not build a separate unit in the back?"

I have a background in urban planning, so I was familiar with all the ADU regulations, the details, and the approval processes. They kept saying, "You can do this." And I'd say, "I can't afford it." It wasn't until my career advanced further that it finally became feasible.

Knowing how critical housing is—and how badly it's needed in California—that motivated me. I had the expertise in ADUs and the permitting process, so I knew I could make it work. I told myself, "You know what? Let's just give it a try."

At first, I looked into traditional construction. I hired an architect to design the ADU and calculated everything I could think of—construction costs, permits, even school fees. When I saw the final estimate, I wondered if there were comparable prefab homes that would be easier to build.

From there, I struggled to figure out how to finance the ADU. So I looked for the path of least resistance—something affordable. I checked out a few companies and ended up with Samara. The materials, the design—everything was included in one package. They handled the contractors and the permits. On top of that, they offered a financing option that allowed me to take out a second mortgage. With that second mortgage, the ADU became financially viable.

It's essentially a standard mortgage, except it's subordinate to the primary mortgage on my main house. Of course, interest rates in 2025 weren't as favorable as they were in 2020. My monthly payment is around $1,600 (about €1,360), while the rental income is $3,000 (about €2,550).

There aren't many small rental homes in Irvine, so I looked a little outside the city for comparisons. It's 528 square feet, with one bedroom and one bathroom. The bedroom and living area have high ceilings, making it feel much more spacious than it sounds.

The ADU does add to my financial burden. I can't live as freely or carefree as some people in similar professions who rent, so it definitely ties me down financially.

But there's a saying I like: Calculate the cost, pay the price, and live a life without regret. So you have to weigh the costs—you can have an ADU, but every single decision comes with a price.

I didn't build an accessory dwelling unit to live in it myself. It was something I wanted to try, and I know it brings benefits—for me and for people searching for housing.

I'm well aware that many struggle to make ends meet or even qualify for a rental apartment in the first place. It's truly heartbreaking. If we can increase the supply of rental housing, that could help stabilize rents.

For the foreseeable future, I'd like to keep renting it out. I'm pretty financially conservative, so it's hard for me to imagine ever reaching a point where I'd think, I don't need anyone living there—why not turn it into a meditation room or something?

That said, if my family or friends ever needed a place to stay, I'd absolutely consider letting them move in.

I can't stress enough how building a separate living unit is one of the most effective, efficient, and beneficial ways to create housing. It's a government-approved process: As long as you comply with regulations—even if the neighbors hate it—you're allowed to build. It's simply a fantastic way to add housing, and I really hope this trend continues.

It's a solid partial solution to the housing crisis, though it won't solve the problem entirely.

When I look at this unit, it reminds me of my own limiting beliefs—how easy it is to tell myself, I could never own a home. I could never build an ADU. Retirement? Forget about it.

There are so many unconscious mental barriers we carry. I think we owe it to ourselves to at least allow ourselves to dream and explore the possibilities, even if the numbers don't add up right away. Where there's a will, there's a way.