Recently, a state bill was approved (Assembly Bill AB 1866), which requires local agencies to permit second dwelling units in ALL RESIDENTIAL ZONES without discretionary action. In other words, subject only to a building permit. The purpose of the State law was to increase California's supply of affordable housing in response to a perceived housing crisis in many areas of the state. This same law allows you to build a second home on your lot for family or income.
Looking for something a bit smaller or maybe a structure that's not a complete house? Valley Home Development has a line of structures ranging from 200sq.ft. to well over 600sq.ft. that can be used as an office, game room, pool house, home theater or whatever you can dream up.