As home prices continue to rise, many are left wondering how they can afford a piece of the American Dream.
Some have broached the idea of sharing a home, but co-ownership—even among family—is a little too cozy for most. The tenancy approach is probably the easiest.
That’s why many homebuyers today are looking for houses or property with potential to add “accessory dwelling units,” or ADUs.
ADU residences can be build-ons, repurposed space or even a separate, free-standing unit. The main draw is practicality, providing a sense of autonomy for the renter at a lower cost and a sense of security for the owner as it helps with paying their mortgage.
Needless to say, there’s a market for ADUs.
62 percent of of U.S. households are made up of one or two people, even though most new and existing homes are designed to accommodate three or four. So legacy housing stock is simply more space than many people need.
As a result, some estimate the number of informal and formal ADUs to be as high as 13 million nationwide.
Despite their practicality and popularity, ADUs can run into problems with regulations limiting construction and parking. And let’s not forget homeowners associations—they’re sure to have opinions as well.
That said, legislators in cities like Seattle, Portland, OR and Los Angeles are responding to local housing crunches by warming to the concept of ADUs, offering fee waivers and easing the permitting process.
Because ADU housing has a relatively small environmental and social footprint, this movement doesn’t receive much opposition from anti-development groups. These units can come into residential neighborhoods without dramatically changing a neighborhood’s character, bringing with them a stable demographic and a financial diversity that neighborhoods need (and some governments require).
As great as ADUs can be, homeowners will want to consider the future impact of a unit on their future resale value. Some buyers shy away from “overbuilt” properties, and an ADU that’s not built to code could be a problem.