An accessory dwelling unit (ADU) is a smaller, independent residential dwelling located on the same lot as a standalone (detached) single-family home. ADUs go by many different names throughout the U.S., including granny flats, in-law suites, backyard cottages, secondary suites, and carriage houses.

ADUs are independent homes with their own kitchen, bathroom, living area, and separate entrance. ADUs can be attached to an existing home (such as a basement apartment) or detached structures like above a garage or backyard cottage.

ADUs provide complete independent living facilities for one or more persons and can be rented or occupied by family members, caretakers, aging parents, college students, a home office, etc. ADUs are a flexible housing option that allow homeowners to utilize their property more efficiently and create more diverse and affordable housing choices within existing neighborhoods.

What Makes a Housing Unit an ADU?

For a housing structure to qualify as an ADU, it must meet the following criteria:

Independent living facilities – Must contain living spaces like a kitchen, bathroom, sleeping area, and living room. Should have full facilities for cooking, sleeping, and bathing.
Separate entrance – Must have its own entrance and not require accessing through the main house. Can have an interior door connecting to the main house.
On the same lot as primary house – Must share the same lot as an existing single-family home. The home and ADU are on one common property.
Smaller size – Usually limited to 30-50% size of the primary house or under 800-1000 sq.ft. Varies by location.
Dwelling vs. outbuilding – Must be designed as a dwelling not as an outbuilding like a shed or garage. Meant for people to live in.
Legally permitted – Must go through proper permitting and planning approval processes for ADUs.
Limited occupancy – Usually 1-2 occupants maximum is allowed.

If a structure meets these criteria, it is considered an ADU and provides a flexible extra living space on a residential property. ADUs are one way to add gentle density and housing diversity within existing neighborhoods.

Why Are ADUs Gaining Popularity?

In recent years, ADUs have surged in popularity across the U.S. There are several driving factors behind the increased demand for ADUs:

Added Rental Income

One of the biggest motivations for adding an ADU is the ability to generate extra rental income by renting out the ADU. The rents collected from the ADU can provide homeowners with added monthly cash flow.

ADUs provide an opportunity to earn rental income from the existing property without having to acquire another investment property. Especially as housing costs rise faster than wages, the extra rental income makes homeownership more affordable.

Housing Cost Savings

ADUs allow homeowners to share utilities and other housing costs with the ADU tenant(s). Any shared maintenance costs are spread across both housing units.

Homeowners can reside in the smaller ADU themselves and rent out the larger main house if they want to downsize and don’t need as much space. This allows them to stay in their community and free up cash flow.

Flexible Living Spaces

ADUs provide flexible spaces that can adapt to the homeowner’s changing needs over time. For instance, the ADU could be used as:

A home office or art studio
Housing for an aging parent or returning college graduate
A guest house for visiting relatives and friends
Space for a live-in caretaker or au pair
Rental income from non-family tenants
Primary residence if downsizing from the main house

Unlike building a room addition that has a permanent use, ADUs are detached living spaces that can serve a variety of uses over the years.

Housing Shortage Solutions

Many communities face housing shortages amid rapid population growth and rising home prices. ADUs present a creative way to gently increase and diversify housing stock without drastically altering local neighborhoods.

ADUs provide small footprint, low-impact infill development that adds housing units within existing neighborhoods. This helps provide affordable rental options for young workers, empty nesters, and elderly on fixed incomes.

Aging in Place

Millions of baby boomers are approaching retirement age and want to remain in their communities near family and friends. An ADU provides parents or grandparents an ideal space to downsize into while still living close to their loved ones.

Having family caregivers reside in or nearby the ADU helps aging adults continue living independently in their own homes for longer periods of time.

Environmental Benefits

ADUs help reduce urban sprawl by utilizing existing infrastructure and homes in established neighborhoods. This eliminates the environmental impacts of new housing subdivisions and strip mall development spreading farther out.

More compact and walkable housing patterns given by ADUs cut down on car trips and commute distances. This shrinks the carbon footprint of daily transportation-related emissions.

Types of Accessory Dwelling Units

While ADUs come in many shapes and sizes, there are several common types of ADU structures:

Detached ADUs

Backyard cottages – A small home in the backyard separate from the main house. Also called backyard bungalows or laneway houses.
Garage conversions – Transforming an existing garage into a dwelling unit. Often done by building a second floor above the garage.
Carriage houses – A detached dwelling built above or beside a garage structure resembling a carriage house. Located at the rear of a lot.

Attached ADUs

Basement apartments – Converting an unused basement into an independent living space. Requires adding separate kitchen and exterior entrance.
Attic conversions -Renovating attic space into a private apartment with an attic stairway for access.
Tiny home – A compact detached structure under 400 sq.ft. Functions as a freestanding ADU.
Duplex divided – Dividing an existing duplex into two separate units. Often shares parking & yard.
Interior ADU – Adding an addition inside the existing walls of a house with a private entry.
Junior ADU – A unit created within the walls of an existing house. Usually under 500 sq. ft. and must have shared entry.

This wide variety of ADU types provides flexible options to match the needs of homeowners, property conditions, budgets, lot characteristics, and local regulations.

ADU Size and Dimensions

ADUs come in a range of shapes and sizes to suit the needs of each homeowner. Typical size parameters:

Detached ADU – Usually 800-1000 sq. ft. maximum or 30-50% of the size of the main house.
Attached ADU – Average 200-600 sq. ft. Depending on existing house layout.
Tiny home ADU – Typically under 400 sq. ft. Minimum allowed by local codes.
Junior ADU – Maximum 500 sq.ft. and often limited to 300 sq.ft.
Number of bedrooms – Most ADUs are 1 bedroom. Sometimes 2 bedrooms if space allows.
Height – Usually cannot exceed height of main house. Often lower height limits.
Lot coverage – ADU and main home combined usually cannot exceed allowable lot coverage.

ADUs must conform to the local zoning size limits, setbacks, height requirements, and lot coverage restrictions. Overall, the ADU must proportionally fit within the dimensions of the existing lot and home.

ADU Floor Plans

When designing ADUs, homeowners must get creative to make the best use of every square foot. Well-planned ADUs incorporate space-saving features:

Open floorplans – Allow living and dining to occupy same space
Multi-use furniture – Examples: murphy beds, trundle beds, fold down tables
Tall ceilings – Give illusion of more space
Small but efficient kitchens – Compact or galley kitchen layouts
Flexible room dividers – Room partitions that slide, pivot, or are multifunctional
Built-in storage – Furniture and cabinetry double as storage
Tiny bathrooms – With all amenities in a 3’x5′ or 4’x6′ space
Outdoor living extensions – Decks, patios, and porches expand living area

ADUs make the most of small footprints through intelligent, space-saving designs. Homeowners work closely with designers to create customized ADU floor plans.

How Much Does an ADU Cost to Build?

ADU costs can vary greatly based on the type built, materials, size, and geographic location. Here are some typical price ranges:

Detached ADU – $150,000 to $300,000
Basement ADU – $50,000 to $150,000
Garage Conversion ADU – $50,000 to $100,000
Attached Addition ADU – $80,000 to $150,000
Junior ADU – $30,000 to $80,000
Tiny Home ADU – $50,000 to $100,000

The most affordable options for ADUs are often basement apartments, junior ADUs, or converting existing outbuildings. Higher price ranges are associated with new detached backyard cottages or 2nd story garage conversions.

Major factors impacting ADU costs include:

Construction or renovation required
Amount of plumbing and electrical work needed
Overall size and height
Design complexity
Quality of finishes and appliances
Accessibility requirements
Local permitting fees

Various financing options exist for ADUs like savings, home equity lines, cash-out mortgage refinancing, or private lender construction loans.

ADU Permitting and Zoning

While ADUs are now allowed in some form nationwide, each local jurisdiction sets its own regulations that dictate ADU development requirements and restrictions. Typical zoning and permitting rules address:

Locations where ADUs are allowed by lot type
Maximum unit size, height, and lot coverage
Building setbacks
Design aesthetics
Off-street parking requirements
Unit occupancy and rents
Utility and service connections
Environmental and health standards

Homeowners must check with their local zoning department to learn applicable ADU rules for their area. The permitting process involves submitting plans for approval and acquiring proper building permits.

Fortunately, places like California and Oregon have passed new laws making ADU and tiny home permitting and approval much simpler and affordable. Various U.S. cities are relaxing codes to encourage more ADU development.

Designing and Building an ADU

The process of creating an ADU involves:

Assessing needs, budget, and property constraints
Evaluating ADU design and layout options
Checking local zoning and permit requirements
Hiring licensed architects and builders
Submitting plans and acquiring permits
Overseeing construction and adhering to inspection schedules
Finalizing all administrative closeouts for occupancy

While complex, building an ADU is manageable with proper planning and partners. Homeowners consult with:

Architects & designers – Develop concepts, sketches, floorplans optimized for small spaces and budgets. Create permit drawings.
ADU contractors & builders – Provide project estimates and advice on feasibility. Build (or renovate) the ADU to approved plans and specifications.
Engineers – Structural engineers (when needed) ensure structural safety and compliance.
Permit expediters – Help advise and navigate the permitting steps and processes.
Lenders – If financing is required, lenders can provide lending options like construction loans.

With the right expertise and financing, ADUs can be designed and built smoothly. New web apps even provide simplified guidance on ADU feasibility and costs.

Renting Out an ADU

Many homeowners plan to rent an ADU for extra income. Top tips for renting an ADU include:

Research market rents – Review ADU rents in your area using sites like Zillow.com and Craiglist.com. Visit competing ADUs for rent to assess features and conditions.
Price your ADU smartly – Pick a monthly rate that covers expenses and is competitive but not under-market. Remember taxes and insurance add costs.
List on multiple sites – List the ADU on sites like Zillow, Apartments.com and local community bulletin boards. Market availability 2 months in advance.
Require tenant screening – Screen applicant backgrounds thoroughly. Require credit checks and co-signers for risks.
Create detailed lease agreements – Use proper lease forms and include clear rules about parking, guests, pets, utilities, and maintenance duties.
Manage relationships – Set clear expectations and boundaries but try to accommodate reasonable tenant requests.
Plan for maintenance – Include 5-10% of rent to cover future maintenance costs and repairs.

Proper planning makes ADU rentals a more passive, hassle-free source of growth. Property managers can oversee tenant management and maintenance for about 10% of rent.

Benefits of Adding an ADU

ADUs offer many benefits and advantages as flexible housing solutions:

Provide homeowners with added income from rents
Add affordable housing options for family or tenants
Offer flexible spaces for different uses over time
Support aging in place for parents or grandparents
Enable efficient use of existing housing infrastructure
Create low-impact additional living spaces
Help build intergenerational and diverse communities
Provide smart housing growth amidst shortages
Represent an environmentally friendly housing choice

ADUs are an innovative housing concept that repurpose existing homes and neighborhoods. They provide affordable and sustainable housing options for all generations.

Common Questions About ADUs

How do I determine if an ADU is right for my lot?

Consider lot dimensions, zoning rules, parking constraints, utility capacities, budget, and your goals. Create sketches of potential ADU shapes and locations. Most lots over 5000 sq.ft. can potentially accommodate an ADU.

What are the main steps to building an ADU?

Assess needs, survey property, design ADU, estimate costs, evaluate financing, apply for permits, hire contractors, oversee construction, and finalize approvals. It averages 6-12 months to add an ADU.

What’s better, a detached or attached ADU?

Detached ADUs provide more privacy but often cost more. Attached ADUs have lower costs but less autonomy. Evaluate budget, existing home layout, lot dimensions, and privacy needs when deciding.

Can I convert a garage or other outbuilding into an ADU?

Yes, existing structures like garages can often be converted into ADUs if zoning allows and proper permits are obtained. The structure must meet ADU living space requirements.

How much space is needed for an ADU?

ADUs average between 200-1000 sq.ft. Tiny home ADUs can be as small as 100-400 sq.ft. Needs like occupancy, uses, number of bedrooms, and available space determine ideal size.

Do I need a specialist contractor to build an ADU?

While any experienced builder can construct an ADU, specialist firms are attuned to the unique needs of compact space design, permitting, and construction. They provide valuable expertise.

How do I obtain financing to build an ADU?

Primary options are cash or savings, HELOC, cash-out mortgage refinance, 401k/IRA loans, home equity loans, private lender construction loans, or low-interest ADU loan programs.

Will my home insurance cover my ADU?

Yes, but notify your insurer an ADU is being added. Extra dwelling coverage will be added and rates adjusted. Possessory interest coverage for tenant contents is also recommended.

Adding an ADU is a smart way to better utilize residential property and create housing opportunities. They represent an important housing solution that benefits homeowners and communities.

Conclusion

Accessory dwelling units are independent small homes located on the same lot as an existing single-family house. ADUs go by many names like granny flats, in-law suites, backyard cottages, and garage apartments. They come in detached and attached formats, providing flexible living spaces ranging from 200-1000 sq. ft. typically.

ADUs have surged in popularity thanks to benefits such as extra rental income, flexible spaces, aging in place, and affordable low-impact infill housing. ADUs enable homeowners to better utilize their residential lot. While ADU zoning and building codes vary by location, many areas are relaxing ADU rules to encourage more development. If designed and built properly, ADUs can provide rewarding living solutions.

What Is an Accessory Dwelling Unit?