Accessory Dwelling Units (ADUs)

What is an Accessory Dwelling Unit?

An Accessory Dwelling Unit (ADU) is an attached or detached residential dwelling unit that provides complete, independent living facilities for one or more persons, including permanent provisions for living, sleeping, eating, cooking, sanitation, and parking, and is located on a lot with a proposed or existing dwelling. They may be permitted in any residential zoning district, subject to approval by the Community Development Department through the Building Permit plan review process. The Building Permit Fees are based on the size of the unit and the proposed scope of work to create the unit.

Ordinance Update

Recent changes to State law requires cities to update their ADU regulations to streamline the development of ADUs. Staff is currently updating the City’s ADU Ordinance to be consistent with the most recently legislation. Upon adoption by City Council, the revised ordinance must be reviewed by the State Department of Housing and Community Development for consistency with State law. 

City Council reviewed the draft ordinance at its meeting on February 8, 2022. The staff report for that meeting can be viewed here. At that meeting, Council directed staff to make changes to the draft ordinance regarding rooftop decks, architectural design standards, and modify where ADUs are allowed on a property. Council also requested that staff consider a fee waiver program to further incentivize ADU construction. 


The draft ordinance, with the revisions requested by Council, will be presented to Planning Commission in the Spring of 2022. Please check back for more information about future meetings. 

For more information, please contact Andrew Perez, Acting Planning Manager at or (805) 473-5425. 

Pre-Approved ADU Plan Program

The cities of Arroyo Grande, Atascadero, Grover Beach, and Morro Bay obtained grant funding as joint applicant to hire a consultant and create a pre-approved ADU plan program. The goal of this joint effort is to expedite the ADU permitting process and encourage the construction of accessory units to support our regional housing goals.  This joint effort for Regional Pre-Approved Accessory Dwelling Unit stock plans responds to local conditions and design themes and will be available for use by the cities of Atascadero, Arroyo Grande, Grover Beach, and Morro Bay. The benefits of pre-approved ADU plans include:

  • Saving applicant pre-construction design time and money by providing a selection of pre-approved stock plans in a variety of sizes and styles 
  • Streamlining the City construction plan check review process (plans will be pre-reviewed and approved. Only site specific plans will require review)
  • Boosting production and development of accessory units that can help each City maintain housing stock that is affordable by design

The Planning Commission provided feedback to the consultant on the six (6) preliminary design themes. The staff report for that item can be viewed here. Conceptual plans for the pre-approved ADUs can be found here


Development of construction documents for each of the pre-approved plans are underway. The final designs will return to Council prior to being made available to the public. Please check back for more information about future meetings. 

For more information about the program, please contact Andrew Perez, Acting Planning Manager at or (805) 473-5425.


CalHFA ADU Grant Program

The California Housing Finance Agency created a program that would provide up to $40,000 for eligible households to reimburse pre-development and non-recurring closing costs associated with the construction of ADUs. Pre-development costs include site prep, architectural designs, permits, soil tests, impact fees, property survey, and energy reports. Grant funding is available for households with low or moderate incomes. For more information about the program and income eligibility, please visit the grant programs webpage here.