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Accessory Dwelling Unit Legislation

Years ago, they were called in-law apartments, carriage houses and granny flats. Today planners classify them using a somewhat “less-folksy” term: Accessory Dwelling Units or ADUs.

In recent years, the concept of ADUs has been given new life as young professionals and families navigate a nationwide housing shortage and soaring prices; both of which are making home ownership more difficult or completely out of reach for so many. Empty nesters and retirees looking for additional income in their later years are also looking to ADUs as a way to repurpose and rent out spaces in their homes that are no longer being used to raise their children.

So what exactly is an ADU?

The American Planning Association (APA) describes an Accessory Dwelling Unit as a smaller, independent residential dwelling unit located on the same lot as a stand-alone single-family home. These separate living spaces typically contain a kitchen, bathroom and a sleeping area. They can be located in a basement unit or over a garage, or completely detached from the home, such as with a backyard cottage. Regardless of its physical form, an ADU must be part of the same property as the main home and cannot be bought or sold separately. The owner of the ADU is also the owner of the main home.

Expanding access to affordable housing with accessory dwelling unit legislation

Accessory dwelling units are commonly created in low-density residential neighborhoods where lower-cost housing types might otherwise be unavailable, helping to expand access to resource-rich areas for low- and moderate-income households. These units can also improve affordability for existing homeowners, as rent payments create a source of income that can be used to cover a portion of the mortgage or other expenses. Tenants may also pay reduced rent in exchange for taking on a portion of home maintenance responsibilities, which can help senior homeowners to age in place. According to a study by Architects LA, ADUs when done correctly (detached ADUs in particular), have the potential to increase property values by 20-30%.

Weighing the costs

ADUs may contribute to an increase in property taxes, create possible issues with renters and maintenance, and decrease privacy. The cost of building an ADU can be substantial too. According to real estate experts, the general estimate is that an ADU will cost typically around $100,000-$140,000, and could extend up to as much as $180,000. The cost however will vary greatly by region, labor expenses, square footage, materials etc. Local laws may also restrict or totally deny the construction of ADUs, so it’s always a good idea to check local zoning requirements before starting an ADU project.

Communities need to consider other impacts of ADUs

Although ADUs diversify the local housing market, communities may be resistant to approving this type of housing. Density, overcrowding, and parking and traffic impacts are among the top concerns for local municipalities. While these concerns are valid, impacts from ADUs are generally minimal. Within communities that permit ADUs, there must be property owners willing to make a financial investment and potentially serve as a landlord. They also must have property that can accommodate an additional dwelling unit that meets zoning and setback requirements. 

Flexible and equitable zoning rules help ADUs get done

As ADUs gain ground in many places across the country, challenges remain with local zoning laws responsible for regulating the location, design, size and occupancy of residential areas. Permitting, and other requirements can frustrate homeowners unfamiliar with the development process. Further, community opposition often hinders local efforts to allow ADUs. And while ADUs are typically less expensive to build than single-family homes, they can be cost prohibitive to those without access to sufficient funds.

Accessory Dwelling Unit legislation is typically adopted at the local level, although several state legislatures have required cities to allow them. Where it’s legal to build ADUs, homeowners still need to follow rules about where it can be done, how many square feet they can contain, how they can be used. These rules can be found in the local zoning code.

Many communities are finding that ADU-related zoning codes should be restrictive enough to prevent undesirable development but flexible enough that ADUs get built. Every community has its own priorities and concerns, and there’s a wide enough range of regulatory controls that communities can leverage to write appropriate ADU rules.

ADUs by the numbers

  • There are an estimated 1.5 million Accessory Dwelling Units (ADUs) in the United States, making up roughly 2% of all homes in the country
  • ADUs are growing at a rate of 9%, or 100,000 per year
  • An average cost of an ADU is $180,000, or $260 per square foot
  • In America’s biggest cities, a home with an ADU is priced 35% higher on average than a home without one
  • The top states for ADUs are California (30%), Florida (12%), Texas (10%) and Georgia (5%)

Source: Porch; September 7, 2021, 2021 Study: How Much Value Do Granny Flats and Other Accessory Dwelling Units Add to a Home?

What’s your state’s position on ADUs?

eCode360® is a great resource to look at for Accessory Dwelling Unit legislation in your area or neighboring communities. Here are some useful examples to get you started:

Is your municipality looking to pass accessory dwelling unit legislation? Let us know.

General Code is ready to help you update your municipal code so the latest regulations are always available to the public. Contact us to get the process going. We are happy to help!

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