Los Angeles County built more accessory dwelling units last year than ever before, as backyard homes and converted garages continued their rapid rise from a niche form of housing to a major source of new construction.
The county completed 10,230 ADUs in 2025, more than six times the 1,624 built in 2018, according to a new report from the University of Southern California’s Lusk Center for Real Estate. ADUs accounted for 37% of all new housing units certified for occupancy last year — the highest share in the eight years of data analyzed by researchers.
The surge stands out because overall housing production dipped slightly in 2025, to 27,293 units from 28,498 the year before. ADU construction, meanwhile, continued climbing. Some of the overall housing production, however, represents replacement rather than additional housing, with teardown activity rising sharply in 2025 in part because of the Palisades and Eaton fires, according to the report.
The growth is one of the clearest bright spots in USC’s second annual State of Los Angeles County Housing and Neighborhoods report, which finds modest signs of progress after decades of housing underproduction. But researchers caution that the boom in small backyard units is not enough on its own to close the county’s enormous housing shortage — and that ADUs do not always function like conventional apartments available on the open rental market.
“Accessory dwelling units, or ADUs, make up 37% of the total new housing units in the county in 2025,” Cameron Yap, systems and data manager at USC Neighborhood Data for Social Change, said during a presentation Tuesday. “This is a higher share than any other year on record.”
Researchers pointed in part to years of state and local policy changes that have made ADUs easier to build, including measures that streamlined approvals and relaxed some development restrictions. The shift is stark: ADUs accounted for roughly 10% of new housing completed in Los Angeles County in 2018, compared with 37% in 2025.
Jared Schachner, the report’s research director and a research assistant professor at the USC Price School of Public Policy, said the growth demonstrates how government policy can spur housing construction.
“It’s an encouraging policy story that certain policies can be extremely effective in driving additional housing supply,” Schachner said in an interview after the presentation. At the same time, he said, researchers are “just not seeing the same scale of impact” from policy changes affecting other types of rental housing.
ADUs also move from permit to completion considerably faster than large multifamily developments, according to the report. In the City of Los Angeles, ADUs took an average of about 18 months to complete after receiving a permit, compared with roughly three years for projects with five or more units.
That speed matters in a region where housing construction has lagged population growth for decades. Los Angeles County jurisdictions are expected to plan for roughly 812,000 new homes during the state’s 2021-29 housing cycle. Through 2025, about 125,000 units had been completed, according to the report.
“Even if the trend is moving in the right direction, the scale of the gap between where we are and where we need to be in terms of the regional goals is so vast that the ADU impact is ultimately a drop in the bucket,” Schachner said.
Still, he said, that does diminish the significance of the increase. “I don’t think that’s to say we shouldn’t feel encouraged by these initial signs of a supply expansion when it comes to ADUs,” Schachner said. “But it’s not nearly enough to fill that gap in terms of what we need regionally.”
Researchers also urged caution in treating every newly built ADU as equivalent to a conventional apartment entering the rental market. Some may instead house relatives or friends, be rented seasonally or remain vacant.
“It’s not clear entirely whether these ADU units are being rented out on the private market, like another type of rental housing unit ordinarily would be,” Schachner said.
If a large share is not entering the conventional rental market, he said, the ADU boom may have less effect on the overall rental supply than the construction numbers alone suggest.
The broader report found other signs of progress. About 19% of new rental units completed in 2025 were affordable to low-income households, nearly double the average share over the prior seven years.
But affordability remains severe. In 2024, 57% of Los Angeles County renters were rent-burdened, meaning they spent more than 30% of their income on rent, while 30% were severely rent-burdened, spending more than half.
Homeownership also remains far less common in Los Angeles County than statewide or nationally. High-income households make up a growing share of the county’s renters: 17% of renter households earned more than $150,000 in 2024, up from 10% a decade earlier, according to researchers.
That leaves ADUs in an unusual position: They are one of the few forms of housing whose production has accelerated dramatically in recent years, even as the county remains short of its overall housing goals.
Schachner said the challenge now is determining what changes could produce similar growth in other types of housing.
“We really have to look at each unit type and see what policies need to change to achieve the growth that we’ve seen in ADUs and other rental unit types,” he said.