These expanded living spaces could revolutionize the concept of home living for many luxury granny flats
Accessory dwelling units (ADUs) might sound like a new-fangled option for housing, but the concept dates back centuries. Luxury granny flats, guest cottages, and casitas were customary accessories to the main house. It was rare for an estate not to have a carriage house or outbuildings for staff. All these options fall under the mantle of an ADU. Architects such as Jeff Kruth and Murali Paranandi, professors of architecture at Miami University, call them “the original compact housing.” Still, research, including a recent Freddie Mac survey, finds that 71% of consumers are unfamiliar with the concept or the term.
Today, ADUs are being touted as potential solutions to diverse housing challenges, from affordability to changing demographics. And rather than just a place to stash granny, they are increasingly perceived as an option that benefits all age groups.
Photo Courtesy of Superior ADU’s
What is an ADU?
An ADU is a second house or dwelling constructed on a single-family lot that typically is subordinate to the main house. As defined by Freddie Mac, an ADU is an independent living unit. A private entrance, heating and cooling system, bathroom(s), and kitchen are required. Typically, according to John Burns Research and Consulting, the primary home and the ADU are considered one property for tax and appraisal purposes.
ADUs can be built from the ground up or created from existing spaces such as a basement, garage, or attic. Whether attached or detached from the main house, they are required to have a separate entrance.
Photo Courtesy of Bunch Design / By YerinMok
Luxury Granny Flats More Than Simply a Tiny House
Mention these accessory dwellings, and most people envision something akin to a tiny house. Which the International Building Code classifies as 400 square feet or less. What surprises most about ADUs is “how large they feel and how functional they can be.” Says Sheila Hedden, owner of Superior ADUs, a design-build firm in Orange County, California. While some might have square footage comparable to a tiny house, many are substantially larger. Often measuring 1,000 square feet, even 1,200 square feet in some locations, with multiple bedrooms and baths.
Photo By Parrish Ruiz De Velasco
Luxury Granny Flats Not Just for Houseguests
A recent survey commissioned by AARP asked adults 18 years and up why they would consider creating an ADU. A vast majority, 86%, said it would be to provide a home for a loved one in need or to create housing for relatives or friends. Three-quarters said their motivation was to create a place for a caregiver or a nanny. Approximately 69% said it would increase the value of their home. Other incentives measuring over 60% included: “67% would feel safer by having someone nearby.”
Projected uses include multiple scenarios in which having a smaller structure extends options for families. “We are seeing people from all demographics. We see the most interest from homeowners who want to build for family members. Many are built for aging parents, or their young adult children who can’t afford to buy a home. Some are building for themselves and allowing their adult children and grandchildren to move into their primary homes. They downsize, while their adult children upsize. It’s a great way to increase affordability for all involved,” says Hedden. “Even those homeowners who build them for family members are thinking about future rental income, as well as increasing the value of their properties.”
Why ADUs
Recognizing the lack of opportunities to develop new housing, the California legislature passed a suite of new legislation beginning in 2016. It aimed at facilitating ADU construction by easing zoning and land use regulations. According to the California Department of Housing and Community Development, the total number of ADUs permitted in the state rose. It rose from just under 9,000 in 2018 to nearly 24,000 in 2021.
“The demand continues to grow,” adds Hedden. “In 2020, we received many calls from people who were interested but not yet ready to pull the trigger. Some were skeptical about whether the state laws facilitating ADU builds would continue. Since then, it’s gotten easier to build ADUs, and the calls have increased.”
Photo By Parrish Ruiz De Velasco
California might be perceived as the leader of the current ADU vanguard, but states and municipalities nationwide have been proactively relaxing zoning restrictions. New Hampshire and Vermont allow ADUs nearly everywhere single-family housing is permitted. New Hampshire’s 2017 legislation stemmed from builders’ frustration. At not being permitted to construct the backyard cottages and garage apartments clients requested. In 2022, Maine legislators began requiring municipalities to allow ADUs and duplexes to be built on land zoned for single-family housing. In Oregon, cities and counties of specific sizes are obliged to allow ADUs in all single-family areas within urban growth boundaries. In 2021, the state extended ADU rights to rural residential areas. Other states allowing ADUs, according to AARP, include Connecticut, Rhode Island, and Utah.
It’s Still Local
Local zoning is equally instrumental to ADU creation, with local regulations determining location, size, parking and other characteristics even in pro-ADU states. “Some communities allow almost any home to be set up with an ADU. So long as size limits, property line setbacks and placement caveats in relation to the primary dwelling are met. Others start with those basic standards and then layer on extra requirements that can make it challenging to create an ADU,” observes AARP in their deep dive into the topic, “The ABCs of ADUs”. Many cities now allow ADUs, including Anchorage, Atlanta, Annapolis, Asheville (N.C.), Austin, Denver, Honolulu, Houston, Louisville, Philadelphia, Phoenix, Tucson, Seattle, and Washington, D.C.
Photo Courtesy of Bunch Design / By YerinMok
Making it Easier
The approval process can be lengthy. To facilitate this, some cities are creating pre-approved plans for the dwellings. In January 2023, Sacramento released permit-ready, one- and two-bedroom ADU plans that meet all local residential building code requirements and are all electric. In 2021, Los Angeles created a program offering more than 20 different designs that incorporate elements of diverse architectural styles in the city. There are one and two-story plans, some with roof decks.
Photo Courtesy of Bunch Design
“Creating pre-approved plans streamlines the development process for these housing types; residents can immediately begin seeking a permit after submitting a site plan. Additionally, at 750 square feet, the plans are not subject to impact fees,” says Nicholas Julian, program manager of land use for the National Association of Home Builders.
For anyone looking to create a new structure, options range from prefab homes, often produced by notable designers and architects, to custom plans.
“All of our ADUs are built from the ground up and are referred to as stick-builds,” says Hedden, who compares them to small custom homes. “With the help of our designers, our clients select their own flooring, cabinets, countertops, etc. Clients can choose to include a tile backsplash in the kitchen and tiled showers with niches. We recommend cathedral ceilings, which give the ADUs an open, airy feel. Many clients love the exterior farmhouse look, which we provide if it is acceptable in that city. Clients can choose high-end finishes with engineered hardwood floors, black matte hardware and fixtures, and high-end quartz countertops.”
Costs vary depending on size, number of bathrooms, location of utility connections, the type of finishes and locations. Permits and fees tack on additional dollars.
Photo By Parrish Ruiz De Velasco
Photo Courtesy of Bunch Design
Costs and Locations
Not only do these secondary dwellings offer the potential for rental income, but recent changes in FHA policy allow a substantial percentage, as much as 75%, of rental income to qualify for a mortgage. Loans for new home construction can also include an ADU, which, according to the National Association of Home Builders, allows new homes to be built with ADUs from the ground up.