Woefully underinsured, an Altadena retiree ponders building a tiny house at the back of his yard to replace the three-bedroom home he lost in the January firestorms.

His insurance would pay, at most, just a third of the cost to replace the 78-year-old house he shared for almost three decades with his wife.

The only way to get back home and preserve the generational wealth he’s created for his heirs could be a casita or a granny flat, or as city planners call it, an accessory dwelling unit.

“I’m definitely thinking we’re going to build an ADU,” said Martin Gordon, using the familiar acronym for these secondary home structures. “There’s no way I could afford to build a house.”

L.A. wildfires’ economic toll: Devastating losses followed by burst of building

Across the Eaton and Palisades burn zones, more displaced families are considering ADUs as a way to get back to their land quicker and more cheaply.

For some, it’s a place to live before insurance money for rent runs out. Others see it as a temporary shelter while they design and finance construction of their replacement houses.

State and local leaders see them as a way to hold shattered communities together, easing restrictions and expediting approvals to encourage more ADU construction.

“ADUs are generally regarded as one of the most cost-effective ways to bring new housing online,” L.A. County Board of Supervisors Chair Kathryn Barger said. “It’s going to help property owners … to remain in their homes.”

More than 250 residents who lost homes in the Los Angeles County firestorms have applied for ADU permits so far, city and county figures show.

Once residents rebuild their primary home, they can rent out their ADUs, generating cash to offset the cost of their mortgage, Barger added. And an ADU can be a win-win situation, creating more housing inventory in the community as well, she said.

“I want to get back to my neighborhood, even though it’s still sort of in pieces,” said Pacific Palisades resident Ed Amos, 68. “It’d be so nice and reassuring to be back to where we lived. And the ADU really accomplishes that as a starting point.”

In January, Gov. Gavin Newsom issued an executive order aimed at simplifying the process of building ADUs and allowing homeowners to set up temporary trailers on their properties. The goal was to provide them with a place to live while they rebuild or repair their homes.

Also see: Newsom picks housing over CEQA in 2 bills aimed at speeding construction

The governor’s executive order also suspends certain environmental laws and fast-tracks rebuilding for coastal properties, exempting them from Coastal Commission review for new construction. It applies only to properties “that are in substantially the same location as, and do not exceed 110% of the footprint and height of, properties and facilities that were legally established and existed immediately before this emergency,” the order reads.

In April, Los Angeles Mayor Karen Bass issued development guidelines allowing homeowners to add an ADU to their plan without losing the expedited approvals allowed for “like-for-like” rebuilds. L.A. County has similar rules in place.

Some homeowners told the Southern California News Group they are building standalone ADUs, something not previously allowed without a primary home on the parcel. Others say they are taking advantage of the opportunity to expand their living space.

“The fact that we’ve waived permit fees, and we’ve waived the requirement that an ADU has to be on property where there’s an (existing) structure has really simplified that part of it as well,” Barger said.

Moving forward

After losing his 1,400-square-foot house in the Eaton fire, Scott Uriu is moving forward with plans to build a modern two-story, 1,200-square-foot ADU with one bedroom, 1 ½  bathrooms and balconies. While this will serve as a temporary living space for him and his family, it may also become a rental property after his house is rebuilt.

Uriu, who owns an architecture firm, is also designing two other ADUs for neighbors, as well as several primary residences.

Also see: Can 3D-printed homes solve California’s housing crisis?

For his own project, he intends to use the ADU to help secure financing for his larger 2,200-2,500-square-foot house, which will almost double the size of his original home.

“I’m blowing way past (like-for-like),” he said. “The county might take a long time to actually approve what I want to do for the main house, but the ADU is no problem.”

Altadena is governed by a set of community design standards that require a 25-foot rear yard setback, which can be challenging on smaller lots.

ADUs are the exception.

“A 25-foot tall, 1,200-square-foot ADU, unless it’s in a very high fire zone, can be 4 feet from the rear property line and 4 feet from the side property line,” Uriu said. “And that is, to a certain degree, what I’m doing.”

That not everyone is rushing to take advantage of the opportunity baffles Uriu, who is currently sharing a 1,000-square-foot rental in Highland Park with his wife and two college-aged children, who are home for the summer. In April, he took to the American Institute of Architects’ Instagram page to spread the word about building ADUs first.

More on insurance: Eaton Fire survivors meet in person to call for end to denials and delays

With most insurers only covering rent for two years, he said, ADUs are bound to be in demand “just to get people out of their rentals and onto their properties.”

Skyrocketing demand

ADU production skyrocketed over the past seven years after California lawmakers lifted restrictions on them to increase housing.

Seventeen laws adopted since 2016 lifted owner-occupancy requirements and restrictive lot size, setback and parking standards, according to UC Berkeley’s Terner Center for Housing Innovation. Subsequent laws allow homeowners to build up to two ADUs on a single-family lot.

Also see: 12 new California laws looking to boost affordable home construction

L.A. County jurisdictions issued more than 63,000 ADU permits from 2018 to 2024, accounting for nearly half of all the permits issued statewide, according to figures from the California Housing and Community Development Department.

State and local officials now see this housing type as an integral part of the fire recovery.

As of early July, L.A. County planning and building officials received 224 rebuild applications that include an ADU. Among these, 29 are standalone ADUs, said Edward Rojas, assistant director of the county’s Advanced Planning Division.

City officials in Los Angeles received at least 29 ADU applications for fire-damaged lots by mid-July, while the city of Pasadena received two.

More on LA’s recovery: Plan for rebuilding in fire zones: Cut permit delays, fees, but look to feds for loans

The ADUs range from 250 to 1,200 square feet. Costs vary, but homeowners interviewed said they’re spending from $84,000 to $600,000.

The financial aspects of ADU construction present challenges, such as whether a bank would be willing to issue a second loan for an ADU if the homeowner already has a primary mortgage, said Dana Cuff, director of cityLAB-UCLA and a co-author of the landmark ADU ordinance that became law in 2017.

But, Cuff said, building ADUs in the fire zones “makes sense.”

“(With) housing circumstances so dire, it makes it possible to make changes that wouldn’t be possible otherwise,” Cuff said. “Supervisor Barger and her team are anxious to make those things happen.”

Also see: State Farm under investigation for handling of Palisades, Eaton wildfire claims

The county also is urging residents to consider prefabricated and factory-built homes as a way to speed up rebuilding.

To demonstrate the feasibility of prefab ADUs and houses, cityLAB is collaborating with Barger’s office and LA4LA  to install four prefab units by August, including two ADUs.

“We’re going to hook those up permanently, allow people to tour them, and then rent them to people who’ve been displaced by the fire,” Cuff said.

The county has identified two other sites on Lincoln Avenue in Altadena for an additional eight prefab units to showcase housing options and allow residents to “kick-the-tires.”

Also see: How San Diego hacked California housing law to build ADU ‘apartment buildings’

“I think (ADUs) are a brilliant part of the return home for people who lost property in the burn areas,” Cuff affirmed.

Reza Akef, owner of Metro Capital Builders Inc. and a construction adviser for Pali Strong, expects to break ground on an ADU in Pacific Palisades for a family of five.

The family, currently living in the South Bay, is building a two-story, 657-square-foot beach cottage with one bedroom, one bathroom, a kitchenette and a stacked laundry area. It’s designed to complement the main house, which will be built later.

“They want to do the ADU first so they can get back to normal. They just want to go home,” Akef said. “I hear it in their voices. In all of this chaos, the ADU is a silver lining.”

So, why aren’t more people doing it?

Akef said people who initially considered building an ADU found it more cost-prohibitive to build separately rather than at the same time as the main residence.

And many people are still having issues with insurance companies that are paying a fraction of the cost of rebuilding, he said.

Coastal loophole

Homebuilder Alex Filler is seizing the opportunity to build an ADU at his beach-close Malibu-area home without needing a Coastal Commission permit.

“It was very difficult in the past to get an ADU approved, … and it was not a guarantee that it was going to be approved,” said Filler, 41. “But through this executive order, it streamlined the process, and I was able to get an approval for my ADU in three weeks through the county.”

His family was in Florida visiting relatives when the fire destroyed his home, so they stayed there.

Now, Filler plans to live in the ADU off and on while he rebuilds his main house.

“I can finish an ADU quicker,” Filler said. “I can live in it while we’re completing the rest of the reconstruction, and then, gradually, the family would be in a position to move back.”

Since Filler is using his own homebuilding company and importing building materials from his overseas suppliers, his 244-square-foot ADU will only cost around $84,400. It will feature a kitchenette, bathroom, shower, sauna and living area.

Both the ADU and the main house will have steel framing, tile siding and a metal roof — materials likely to withstand a future conflagration. Prefab walls will be assembled in his company’s factory, and then trucked to the site for assembly.

More on rebuilding: What is ‘home hardening’? Fire-resistant walls, roofs, windows and landscaping

If everything goes as planned, Filler’s family will move back home by Christmas.

Another Pacific Palisades fire victim, Parag Agrawal, 39, is building an ADU to help finance the rebuilding of his Pacific Palisades house.

His insurance won’t cover the full cost of rebuilding, so he’s hoping to get a Small Business Administration disaster loan to fill the funding gap.

The basement ADU he’s planning could generate rental income to help pay off the loan. And if he and his wife still can’t cover the payments, they could sell the home for enough to pay off the debt, thanks to the ADU’s extra square footage.

Primary homes that are no more than 10% bigger than the original house qualify for expedited approvals under emergency regulations.

“The ADU doesn’t count toward that base plus 10% of the original square footage,” said Agrawal, who is unrelated to the former Twitter CEO of the same name. “We could add more square feet, and it would be a faster process.”

A place to land

Nic Arnzen and his husband, Dr. Ray Samoa, need to return to their property in Altadena before the rent allowance from their insurance runs out. They’ve hired the ADU Resource Center in Glendale to build a two-bedroom, two-bathroom unit in their backyard.

The unit, which measures 900 to 1,000 square feet, will cost about $400,000, including the necessary utility hookups.

For now, the family is sharing a Silver Lake townhome with their daughter, their daughter’s friend, two big dogs, a cat and a bunny.

“We’re going to run out of money for our rental,” said Arnzen, a member of the Altadena Town Council. “So, we’re going to put this up, and then we’re going to have to face how we rebuild after that.”

Ed and Christine Amos realized shortly after losing their Cape Cod-style house in the Palisades fire that they wanted to return. They also knew they didn’t want to rebuild their future home with the same combustible wood shingle siding and wood eaves.

“I want something that will be fire-resistant, and I want to rebuild smarter this time,” said Christine, 66, a retired pharmacist. “I don’t want to keep going back to the old wood framing, wood siding structure.”

The Amoses began by ordering a pre-fabricated steel ADU from Cover in Gardena, making sure they have a structure on their land while they plan and design their main home.

Cover Chief Executive Alexis Rivas said that hundreds of families from the Eaton and Palisades fire zones have toured his factory. The company builds modules that can be assembled in various configurations, allowing clients to customize their backyard units.

“They’re like Lego blocks,” Ed Amos said.

The two-bedroom, 750-square-foot structure that the Amoses ordered will cost about $450,000, including site preparation, installation and utility connections, he said.

“For now,” said Christine Amos, “it’s just a really great solution for us to have an intermediate home — a place to land on our property.”