To address the state’s housing shortage, California legislators adopted laws effective 2017 to ease regulations on the construction of accessory dwelling units (ADUs)—small, secondary housing units on lots zoned for single-family homes. In the two years following the change in state law, the City of Los Angeles permitted over 6,000 ADUs, almost ten times what was permitted in the decade prior. In fact, ADUs represented half of all housing units permitted in the City of LA in 2018. With around a half million single-family parcels in Los Angeles, ADUs showed potential to significantly increase the city’s housing supply. If ADUs are like other rental properties, the increase in supply might help stabilize housing prices and increase affordability. However, ADUs are unlike other rental properties in three important ways: first, not all homeowners use the new units as housing; second, homeowners may be more discriminating in choosing their tenant than absentee landlords, potentially excluding all strangers; and third, if homeowners are motivated by financial need, then using the ADU as a short-term rental is more flexible and potentially more profitable than using it as a long-term rental. This dissertation explores the effect of the 2017 ADU legislation on housing supply, focusing on three interrelated components: 1) methods to enumerate unpermitted ADUs, which limit the number of single family parcels available for future ADUs; 2) what neighborhood level characteristics potentially drive permitting, and whether and how the regulatory change affected what types of neighborhoods have seen the most growth in permits; and 3) how homeowners are using ADUs. I answer these questions using data from the Los Angeles County Office of the Assessor, the Census, the City of Los Angeles Department of Building and Safety (LADBS), and an original survey of homeowners who pulled a permit for an ADU. I find that ADUs have increased the supply of relatively low-cost rental units in low-density neighborhoods, but their potential impact is capped both by the absolute number of parcels where ADUs are allowed and also by the number of homeowners willing to sacrifice their privacy and control over their backyards to use the additional unit as housing if not financially necessary.