Accessory Dwelling Units have been around for ages, but today they’re gaining traction and taking on a modern spin. They’re used for family, paid guests, unpaid guests, and long-term renters. Some believe ADUs are becoming one of the next big things for housing in highly populated cities.

What Are ADUs?

Accessible Dwelling Units, or ADUs, is a housing term that covers any kind of second fully livable unit that is part of the main property, attached or detached, and cannot be sold separately. In other words, it can be a carriage house, a tiny house, an over-the-garage apartment, a granny flat, an in-law suite, or a basement with access to the outside.

Reasons for ADUs

The motivations for ADUs today are varied based on a home owner’s needs. A family may want an aging parent nearby with enough privacy to live on their own. Finding a multi-generational home isn’t always an option and moving can be a burden. Or there is a young adult family member who needs a place to live while maintaining independence. Others may want to bring in a passive income by renting out the unit. And more entrepreneurial types can use an ADU for a business, renting out the extra unit on vacation and temporary-stay sites such as Airbnb and VRBO.

What Could Make ADUs the Next Big Thing in Housing?

Some believe that building more ADUs will help alleviate economic and environmental issues. It’s estimated that 62% of all households in the U.S. are one- and two-person households. If a single person or family of two wants to live in a house, they most likely will rent or buy one that can accommodate three or more people. This is because of the low availability of homes made for fewer people. If cities promote the creation of more ADUs, whether conversions or new builds, opportunities increase for people in the one- and two-person demographics to live in more residential communities without drastically changing the appeal of these neighborhoods. For example, fewer big housing developments in a community helps retain charm and a close-knit community feel.

There are also environmental upsides to promoting more ADUs. These units have much smaller environmental footprints. ADUs overall are 33% smaller per capita than typical new single family rentals (44% smaller per capita for detached ADUs). In environmental terms, all of this means utilizing less energy in construction, deconstruction, and habitation.

Two obvious upsides to ADUs from a home owner’s perspective are the flexibility to have room for multiple generations without moving and the potential for additional income from either long- or short-term renters.

FAQs About ADUs

If the idea of creating an ADU on your property is appealing, make sure you’re aware of zoning laws and building code requirements where you live. There are many informal or unpermitted ADUs that might be considered illegal. Also research property laws and tax implications.

How do I know if ADUs are legal in my area? Check your local government website for information on ADUs and what specific permits must be acquired.

Does an ADU increase home value? In-law suites and guest houses in particular are known to increase home value. How much value depends on many factors such as location, features, and condition of the ADU.

How does an ADU access necessary utilities? Most ADUs access the main property’s utilities. Sometimes electric meters are split separately, depending on zoning laws. Cable and internet providers can provide separate accounts.

Must an ADU have a kitchen? Yes, the ADU’s own kitchen is the defining feature that distinguishes the unit from just being additional space inside or outside the main house.

Real Estate Term of the Week

Zoning Law A municipal law that outlines permitted uses for various sections of land. Some parts of a city may be dedicated to industrial use, while others may be set aside for residential or commercial use only. A zoning ordinance may also regulate building height or restrict sound.

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