ADU garage conversion reassessment in Los Angeles

[George Papandreou]

I have recently completed a permitted garage conversion to a 360 sqft ADU in the west side of Los Angeles. The project has triggered a reassessment for the addition. The assessor has used the cost-based approach with a per-sqft cost of $401, yielding 360 x 401 = $144K. They gave me a credit of $11K for the lost garage, resulting to a total of 144K - 11K = $133K increase in the assessed value of the property.

Based on the publicly available California assessor handbook residential building cost tables, I was expecting a much smaller unit cost of around $200 per-sqft, which is much closer to the actual cost of the conversion (no work was needed for new foundation and framing). I talked to the LA county appraiser and he told me that the $401 unit cost he used is based on in-house ADU building cost tables which are not publicly available. It is a real shame that the assessor's office does not publish this information given the popularity of ADUs in California.

Have other people in BP built an ADU which resulted in reassessment? Can you share your experience?

I am considering filing an appeal to the assessor appeals board: The cost of the ADU garage conversion was much lower than the reassessment but it is complicated to prove it to the appeals board because I did the ADU conversion and an interior remodel of the main house at the same time and is hard to separate the costs. Another appeal strategy would be to pursue reassessment based on comparable recent sales: I could commission a professional appraisal to compare the value of houses in the neighborhood with/without ADU conversions. Based on recent sales in my neighborhood, I would estimate that the ADU garage conversion only adds about $50K to the value of the single family house given that the garage is sacrificed. Any feedback on this would be greatly appreciated!

[Lee Bell]

@George Papandreou

Another appeal strategy would be to pursue reassessment based on
comparable recent sales: I could commission a professional appraisal to
compare the value of houses in the neighborhood with/without ADU
conversions.

If you go this way make sure you get an appraiser familiar with your area, and the property type. And ADU's. This would not be a typical appraisal. Actually it would be 2 appraisals, or at least 2 opinions of value, one with and one without the ADU. I suggest you hire someone well qualified. If you hire Mr Cheap, you get what you pay for. I am not angling for the job, btw. I don't want that kind of headache.

Maybe you should talk to an accountant or tax expert about it. Hope this helps.