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What Is An ADU?

An Accessory Dwelling Unit (ADU) is a second housing unit on the same lot, located ancillary to a single-family home on a lot. They are subject to various regulations and design standards, with a few exceptions. They are often seen as a way for a single-family household to generate more income or occupy their property even after the original family retires. The sector is growing in popularity due to its low cost, relative ease of construction, and effective tax benefits.

Although an ADU is constructed on the same lot as a single-family home, it’s usually separated by buildings or structures that provide privacy. ADUs were originally developed to solve issues related to housing depopulation. Many homeowners used them to accommodate aging or disabled family members or renters under lease option agreements.

Features of ADUs

•    They are built on the same lot as the home of the same owner.
•    They are often built on a lot that’s at least 30 percent larger than the lot from which the original home was constructed.
•    The ADU is intended to be used as a secondary residence but can also be used as an income-producing or rental property.
•    Many ADUs are built on lots that are already zoned for residential use and meet existing zoning requirements for the ADU.
•    Most ADUs are attached to the main home and are similar in size.
•    Some include separate entrances for the second unit.
•    A few ADUs have a separate structure located on a different lot from the primary home, but they’re still on the same property as the original home. These ADUs have their entrance and aren’t connected to any other structures on the property.

Types of ADUs

•    Garage Conversion ADU – Some homeowners add a detached garage, which is then converted into a second unit.
•    In-law Suite – These are conversions in which a portion of an existing home is converted into an ADU.
•    Secondary Duplex – These units are built as a trailer on the property or in an existing detached building adjacent to the main home.
•    Attached ADU – This unit is built adjacent to the main home and is attached by way of a garage or building that connects the two houses.
•    Basement ADU – A unit is used as a basement sometimes when it’s built below the house, but not necessarily on the same lot.

The Merits of an ADU

•    They can provide supplemental income or be used as housing for an aging or disabled family member or renter.
•    They allow the first homeowner to have an income-producing asset without selling the property that the homeowners originally intended to live in for several more years.
•    Since ADUs are constructed on the same property, they’re often more affordable and convenient than other options, such as a second home in a nearby community.
•    ADUs have a low risk of being sold to a large corporate buyer, which could risk the value.
•    They’re often built with high-quality materials, many of which are energy-efficient and cost-effective.
•    Because the unit isn’t located in a smaller, more crowded neighborhood and can be detached from the main house, crime rates are lower than in many other residential areas.

The Demerits of ADUs

•    They’re still associated with the stigma of not being a “real house,” as they’re sometimes seen as a type of trailer or even an RV that’s not attached to the main house.
•    More zoning regulations regarding ADUs make it more difficult for homeowners to build them. In addition, as many lenders like Fannie Mae won’t finance the construction of properties with ADUs, homeowners may want to look into special financing programs offered by local banks and financial institutions.
•    Since there are more regulations, homeowners need to be aware that the cost of construction increases.
•    ADUs can have a lower market value than the primary home and may not have rent appreciation potential.
•    Since they’re detached, there’s also less infrastructure for utilities, roads, and other amenities nearby for the owner to manage or enjoy.
•    It is expensive to build an ADU, requiring significant upkeep, especially if they’re used as rental units.
•    It can be not easy to obtain building permits and legally develop the property, even if the lot was originally zoned for residential use. In addition, some localities have additional codes that apply to ADUs that homeowners must understand entirely before getting a permit for a second unit.

The Bottom Line

ADUs offer many benefits to homeowners and renters alike. As local governments continue to allow them, they’ll become more common among homeowners who want a home that’s affordable, convenient, and environmentally friendly. Consider building an ADU in the future or design one today to see how relevant it could be to your needs and lifestyle. Contact our professional engineers today to discuss your ADU design, construction, and financing options.

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