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Additional Dwelling Units

What is an ADU?

An Accessory Dwelling Unit (ADU) is a small, self-contained home that shares a lot with an existing primary home. While ADU is the technical term, they are also commonly called secondary dwelling units, in-law suites, granny flats, carriage houses, lane way houses and many other names. The development of ADUs can be traced back to the twentieth century, when they were a very common sight to see in urban neighborhoods. They eventually fell out of favor mid-century, but are becoming popular again due to the sweeping housing shortage in the U.S.

As housing prices in the U.S. increase, outpacing employment and wage growth, the availability of affordable housing is decreasing in cities across the country. The population continues to expand while the supply of housing keeps declining. To combat this, the majority of states have passed house bills that aim to remove barriers to development, specifically in the case of Additional Dwelling Units, and now is the perfect time to invest in one for your property.

Types of ADUs

There are many ways to incorporate an Additional Dwelling Unit onto your property, depending on your lot size, style of residence, preferences and the regulations in your jurisdiction. ADUs can be separated into three categories: Interior, attached, and detached. We’ve included pictures of the most common variations.

Interior: Located inside the primary dwelling, it is built from existing, converted living space, such a basement or attic. An entire floor of the house can be used if it is multi-level, or something as simple as a spare bedroom can be converted into a studio apartment.

Attached: Attached ADUs are built as an addition and are connected to the primary home.

Detached: A separate, stand-alone structure on the main home’s property, like a cottage or detached garage.

Benefits of An ADU

There are many reasons why you might invest in an Additional Dwelling Unit. They are becoming a popular way to add housing in urban areas without changing the look or size of the neighborhood. Generally, they are built asynchronously to the primary dwelling, allowing the ADU to blend in with the existing property so as not to diminish curb appeal.

To begin, one of the main benefits of having an ADU on your property is generating additional income in the form of rent. Because of their nature, they can be used in many ways and can provide flexible income. As long as you have a permitted ADU, you are allowed to collect legal rent from tenants. If you recently bought a home, you may choose to rent out your secondary unit to help pay the new mortgage. On the flip side, you could also reduce living expenses by living in your ADU, and renting out your primary home for a larger profit. Turn your ADU into an AirBnB, or rent it to long-term tenants.

Another helpful benefit is the option for multi-generational housing. “In-law suites” were named as such because homeowners used to commonly house their parents or their in-laws on their property in order to care for them as they get older as opposed to an assisted living facility. As well, many people want to stay in their homes for decades as they age, but design and finances can often make that a challenging goal. ADUs can give aging people the ability to design a smaller, more accessible home right on their same property without having to relocate. As another example, today’s youth are finding it increasingly difficult to afford housing and are living with their parents for longer than previous generations. ADUs can provide a place for your grown children to stay until they are able to find a home on their own. These secondary units allow every resident to have their own privacy while keeping each other close.

But if you don’t want to use your ADU as living space for others, you can use it as extra space for yourself! Convert it into a studio, use it for fitness or working from home, or even as a sanctuary to unwind and relax. Last, but not least, ADUs will almost always add property value to your lot.

In summary, here are the main benefits of having an Additional Dwelling Unit:
  • Generating rental income
  • Housing family members
  • Added property value
  • Extra space for various activities

As you can see, there is plenty of potential when it comes to Additional Dwelling Units. When you’re ready to explore your options or would like to request a quote for an ADU, contact PSE! Every state and jurisdiction has their own requirements for permitting ADUs, and we can help you navigate the process along with designing a beautiful addition.