Have you been wondering why your neighbors are all talking about building an accessory dwelling unit (ADU)?
They’re probably trying to make the best of the housing market right now. Given the rising mortgage prices and dwindling options, it’s not exactly the home buyer’s dream. But ADU gives you more space to maneuver.
With an ADU, you can increase your property’s usability and value. It also gives you the option to generate rental income. Many people opt for these alternative options due to their affordability—something that is needed in the face of housing shortages.
If you’re curious about ADUs and are considering building one on your property, you’ve come to the right place.
Below, we’ve outlined all you need to know about ADUs to help you make informed decisions moving forward. And if you do decide to build one, you can take up the project successfully.
Let’s start with the basics.
What Is an Accessory Dwelling Unit?
Accessory dwelling units, or ADUs, are independent living spaces built on the same lot as a single-family home. While they may share the foundation with the primary structure on the property, ADUs must have their own legal access to water, sewer, and utilities, along with fully functional spaces for the kitchen, bathroom, living room, and bedroom.
These units can be bought or sold separately, rented out, or used as additional living or working spaces for the family.
Building an ADU requires a permit from local authorities. It may not be legal in some jurisdictions.
Types of ADUs
ADUs can be categorized into different groups based on where they are built.
Here are some of the most common types of ADUs:
1. Attached ADUs
Attached ADUs share a wall with the primary home and are often built on the side or rear part of the existing structure. They have a separate entrance.
They are also fully functional living spaces, though they may share utility hookups with the main residence.
2. Detached ADUs
These types of ADUs are the opposite of attached ADUs. They are fully functional and independent living spaces with separate entrances and don’t share a wall with the main house.
3. Junior ADUs (JADUs)
JADUs are built in the space of the primary house on the property, within the same walls. They’re not visible from the outside and take up less than 500 square feet. They are often built-in attics, basements, or spare rooms that may or may not share sanitation facilities with the primary structure.
4. Garage Conversions
These are garages that have been converted into fully functional living spaces. They’re an ideal solution for those short on living areas and don’t need the parking space.
Benefits of ADUs
Regardless of what type of ADU you plan to build, you will surely enjoy many perks.
From monetary benefits to improved property value, here are some reasons to consider building an ADU on your property:
Affordable and Cost-Effective
The main reason to build an ADU is because it is a very affordable type of construction. In most cases, you don’t need to build an ADU from scratch but only need to add some utilities and certain functionalities.
Some states like California also promote ADU construction, where they remove the following restrictions:
- No need to occupy the primary residence or the proposed new structure
- No impact fee for ADUs smaller than 750 square feet
- Builders can apply for ADU permits regardless of how the lot or home is situated
- No need to meet off-street parking requirements if homeowners convert their garages into ADUs
Applicants in California can also maximize the number of ADUs by ensuring they aren’t less than 850 square feet (1 bedroom ADU) or less than 1000 square feet (1+ bedroom ADU).
Value Addition
Adding an ADU to your property can significantly increase your home’s value. In some cases, such an addition may also lead to tax benefits.
Increased Usable Space
ADUs give homeowners added usable space, which they can use as work-from-home spaces, guest rooms, or rental units. If you have extended family staying with you for a vacation or ones that you need to care for, you’ll greatly appreciate the privacy that ADUs provide.
Source of Income
Homeowners can also use their ADUs as a source of income by renting them out.
Tips on Building an ADU
There are many things to keep in mind when building an ADU, especially before you begin planning:
- Check your region’s zoning laws before getting started with the design planning.
- Measure available interior space before buying new furniture and appliances.
- Choose durable materials that are also sustainably sourced.
- Optimize available space and go for flexible storage solutions.
- Paint small spaces in light colors and decorate them with mirrors to make them feel spacious, light, and bright.
- Consider outfitting the space with all the amenities required for a comfortable holiday or workation.
- Factor in safety features, such as fire extinguishers, safety exits, smoke detectors, etc.
- Integrate as many windows, light fixtures, and height to bring in more light.
- Add outdoor space (with plants) into the ADU package if possible.
- Incorporate a separate entrance for your ADU.
- Give your ADU and its occupants privacy with fences, gates, doors, or barriers.
Financing Options for ADUs
If you’re looking into financing options for ADUs, renovation loans might be a good solution. If you have an existing mortgage, refinancing it is another affordable option if you’re looking for low interest rates.
If you’re in California, you can also look into state grants and incentives for building ADUs.
Build Your ADU With Golden Shore
Despite how easy it looks, researching and building an ADU on your property is a challenging project to take on yourself. Our experienced team can help ensure you get everything you need, whether it is tips on designing ADUs or assistance with zoning requirements.
Do you have more questions about building ADUs or want to start planning your ADU project? Golden Shore is here to help. Let’s get in touch to begin!
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People Also Ask
Building an Accessory Dwelling Unit (ADU) involves navigating complex regulations, which is where common mistakes occur. A major error is failing to secure proper permits or ignoring local zoning codes for setbacks, height, and size limits, which can lead to costly fines or demolition orders. Underestimating the budget for site work, utility connections, and quality materials often results in unfinished projects. Overlooking the need for professional design that maximizes small spaces and ensures natural light can compromise livability. Homeowners also frequently neglect long-term considerations like separate utility metering, privacy for both households, and adherence to universal design principles for accessibility and future resale value.
Rhode Island's new ADU (Accessory Dwelling Unit) law, enacted in 2021, is designed to increase housing availability by making it easier for homeowners to create these smaller, independent units. The law prohibits municipalities from banning ADUs outright in most residential zones that allow single-family homes. It streamlines the approval process, often allowing ADUs by right if they meet specific size, parking, and owner-occupancy criteria set by the local government. Key provisions typically include allowing one ADU per lot, size limits relative to the primary dwelling, and requirements for separate utilities. Homeowners should always consult their local zoning office for the specific ordinances and permitting process in their city or town, as local rules on design, setbacks, and fees still apply.
The cost comparison between building an ADU (Accessory Dwelling Unit) and buying a prefabricated model depends heavily on project specifics. Generally, a prefab ADU can be cheaper upfront due to controlled factory construction, which reduces labor time and material waste. However, site preparation, foundation work, utility connections, and permitting can significantly increase the total cost, sometimes negating initial savings. A custom-built ADU offers greater design flexibility and potentially higher quality but often comes with a higher price tag due to extended timelines and custom materials. The final decision should weigh not just initial cost but also long-term value, local zoning regulations, and your specific property's needs for a functional and compliant unit.
One potential drawback of an Accessory Dwelling Unit (ADU) is the significant upfront investment and complex financing required. Construction costs, including materials, labor, permits, and utility connections, can be substantial. Unlike a primary mortgage, securing a loan for an ADU can be more challenging, often requiring homeowners to use home equity lines of credit or personal savings. This financial hurdle can delay or deter projects. Additionally, the return on investment, while generally positive, is not immediate and depends on local rental markets or property values. Homeowners must carefully evaluate their long-term financial capacity against the anticipated benefits of added space or rental income.
The $25,000 ADU Grant typically refers to California's CalHFA ADU Grant Program. This initiative provides eligible homeowners with up to $25,000 in forgivable loans to cover pre-development costs for constructing an Accessory Dwelling Unit (ADU) or Junior ADU (JADU) on their property. Funds can be used for critical upfront expenses like architectural designs, permits, soil tests, and impact fees. The loan is forgiven if the homeowner completes the ADU and rents it to a low or moderate-income household for five years. This program is a significant financial tool to address the state's housing shortage by incentivizing the creation of affordable rental units. Homeowners should verify current funding availability and specific eligibility requirements directly with CalHFA or a participating lender, as program details can change.
States across the U.S. have increasingly adopted laws to allow Accessory Dwelling Units (ADUs) to address housing shortages. California, Oregon, Washington, and Colorado are among the leaders, with state-level legislation that overrides restrictive local zoning to permit ADUs in most single-family residential areas. Many other states, including Arizona, Texas, Florida, Massachusetts, and Vermont, also generally allow ADUs, but the specific regulations, size limits, parking requirements, and approval processes are almost always determined by county or city ordinances. It is crucial to check with your local planning or building department, as rules can vary dramatically even within a single state. Professional consultation with a design-build firm like Golden Shore is highly recommended to navigate this complex and evolving regulatory landscape.
