The Hot New Homebuyers’ Accessory? ADUs

Small ADU home sits along a slate patio with table and chairs nearby
John Keeble, Getty Images

The Hot New Homebuyers’ Accessory? ADUs

An accessory dwelling unit (ADU) gives homebuyers a chance to charge rent that offsets their mortgage costs – or helps kids or parents who need housing.

NEW YORK – The latest homeowners’ accessory is an accessory dwelling unit (ADU) – a free-standing miniature home as small as a studio apartment and tucked away in a backyard, once sometimes called in-law suites or granny flats.

An ADU can be above a garage or in a basement, it isn’t necessarily small – some can extend to more than 2,000 square feet. A 2020 Freddie Mac study found 1.4 million single-family U.S. homes with ADUs, though the actual number could be higher because some homeowners build them without permits.

ADUs are growing in popularity as more states encourage their construction via zoning changes, and as more homeowners sees the units as a way to lower their housing costs by renting out the units.

Beyond homeowners and buyers, federal, state and local governments have an interest in promoting an increase in ADUs as frustrated homebuyers and renters deal with a shortage of housing and high home prices. Policy makers see adding units on existing lots as a quick way to increase housing supply.

Some states, including California, Oregon and Maine, have passed laws in recent years to encourage ADU construction.

“For some buyers, it’s really becoming a strategy, how to afford the home they want or maybe a little more home than they otherwise would have gotten,” says Daniel Faina, chief marketing officer at California builder Williams Homes.

The average cost to construct an ADU is approximately $100,000, according to building-permit data company Builty.

Source: Wall Street Journal (10/09/23) Friedman, Nicole

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