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ADUs in Los Angeles: Where are they located and by how much do they raise property value?

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  • Jan K. Brueckner
  • Sarah Thomaz

Abstract

Using data from Los Angeles, this article explores the locational determinants as well as the assessed‐value effects of the presence of accessory dwelling units (ADUs). The results show that ADUs are less likely to be found on large parcels containing newer houses and at dense locations near the CBD, the LAX airport, and beaches. ADU presence is more likely close to commercial districts, light‐rail stations, and educational establishments but less likely in higher income areas and Black neighborhoods, although parcels in Latino neighborhoods are more likely to contain ADUs. The assessed‐value regressions show that ADU presence raises a parcel's assessed value and selling price by 7%–9%, while also accurately capturing the unusual rules for property assessments under California's Proposition 13.

Suggested Citation

  • Jan K. Brueckner & Sarah Thomaz, 2024. "ADUs in Los Angeles: Where are they located and by how much do they raise property value?," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 52(3), pages 885-907, May.
    • Handle: RePEc:bla:reesec:v:52:y:2024:i:3:p:885-907
    DOI: 10.1111/1540-6229.12471
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    References listed on IDEAS

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    1. Jackson, Kristoffer (Kip), 2018. "Regulation, land constraints, and California’s boom and bust," Regional Science and Urban Economics, Elsevier, vol. 68(C), pages 130-147.
    2. Molloy, Raven, 2020. "The effect of housing supply regulation on housing affordability: A review," Regional Science and Urban Economics, Elsevier, vol. 80(C).
    3. Brueckner, Jan K. & Rabe, Claus & Selod, Harris, 2019. "Backyarding: Theory and evidence for South Africa," Regional Science and Urban Economics, Elsevier, vol. 79(C).
    4. Davidoff, Thomas & Pavlov, Andrey & Somerville, Tsur, 2022. "Not in my neighbour’s back yard? Laneway homes and neighbours’ property values," Journal of Urban Economics, Elsevier, vol. 128(C).
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    2. von Bergmann, Jens & Davidoff, Thomas & Lauster, Nathan & Somerville, Tsur, 2025. "Upzoning and redevelopment: The details matter," Journal of Housing Economics, Elsevier, vol. 69(C).

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