The 33-year-old residential complex at 1121 N. La Cienega Blvd. in West Hollywood recently unveiled a few new studio apartments.
Technically, they’re ADUs — accessory dwelling units, like the room you’d rent in someone’s guest house.
These units — 695 square feet each, cozy to say the least — were repurposed from parking spaces, laundry facilities and storage rooms in the complex. They’re listed at a not-so-cozy price of $3,100 per month.
How does an apartment complex get away with squeezing more units out of parking and amenity space to create more (un)affordable housing? California Assembly Bill 68.
AB68, passed in 2020, was meant to alleviate the housing crisis by promoting accessory dwelling units (ADUs) within both single-family and multifamily properties.
But real-estate firms like LaTerra Development are beginning to take advantage of the bill as well.
Several other American cities and states, such as Seattle, Chicago, and Minneapolis, have implemented comparable regulations to accommodate ADUs, aiming to counteract escalating housing expenses. Although single-family homeowners in California are the most recognized beneficiaries of this legislation, building backyard ADUs and renting them out, apartment owners are also exploring ways to leverage this opportunity. Chris Tourtellotte, LaTerra’s managing director, told Costar News this could lead to a surge of new multifamily units throughout the larger Los Angeles area.
The new units, which took 15 months to complete from planning to construction, are equipped with modern amenities and fixtures. California’s legislation expedited this process by allowing property owners to bypass certain bureaucratic procedures.
Constructing new apartments from scratch in West Hollywood would have been a more prolonged and expensive endeavor. LaTerra’s ADU project on La Cienega Boulevard cost approximately $300,000 per unit, significantly less than the estimated $800,000 per unit for traditional construction.
In late 2021, LaTerra acquired the property for $29.2 million.
California is at the forefront of ADU construction, with homeowners applying for over 30,000 permits in 2022 alone. This means that one out of every six homes built in California that year was an ADU.
LaTerra is contemplating adding more ADU units to its La Cienega Boulevard property and other multifamily properties in California. Tourtellotte’s perspective on property evaluation has been influenced by this ADU project. Now, he assesses potential sites with an eye for ADU integration opportunities.
Tourtellotte believes that the ideal apartment properties for ADU conversions are those with lower densities, abundant parking, and amenities like storage or laundry facilities.
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