Auxiliary Dwelling Units are no longer “just” accessories to existing houses used as rentals.  ADUs are becoming for-sale primary residences.

The Rise of the ADU Experiment

Auxiliary Dwelling Units, ADUs, have been around since before World War II.  Known as in-law apartment, granny flats, or mother-in-law units built on the same property lots as primary homes, ADUs were relegated to rental units as suburban zoning laws favored single-family homes.

ADUs have been popular on the West Coast for a long time.  Currently, policymakers in high-growth, high-cost areas such as Seattle, Austin, Portland OR and Los Angeles are loosening their zoning standards to actually encourage the development and sale of ADUs in efforts to expand housing options for young people and seniors alike.

Last July 2020, Freddie Mac found that the national share of active, for-sale ADU listings had increased to 6.8% in 2019 from just 1.6% in 2000.  Half of the 1.4M for-sale ADU were in the fast-growing states of California, Texas, Florida and Georgia.

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“Temperature Shift” Around For-Sale ADUs

Since the onslaught of the COVID pandemic, Melissa Kaplan-Macey, the vice president of the tristate area’s Regional Plan Association and Connecticut director, said there’s been a “temperature shift” around the subject of buying and selling ADUs.  On the one hand, existing homeowners are often wary of increased density caused by ADUs and on the other, Kaplan-Macey said, “The past year and a half has shined a bright light on the need for safe housing and the range of people that are needed to keep a community going.”

Phil Abramson, founder and chief executive of Topology, a Newark NJ planning firm, said that ADUs enable accessibility to lower-income households and people wanting to age in place who would not have the means to become homeowners in fast-growing and/or middle-to-high income neighborhoods.  Abramson also made a point of recognizing the tension around the idea of making a second dwelling on a permitted use in a single-family neighborhood by asking, “…are we taking away the single-family zoning?”

The Rise of For-Sale of ADUs

Last year, more than one town in New Jersey passed ordinances that opened up the idea of for-sale ADUs.  In Princeton, ADUs are now permitted to be sold separately as condominiums from the primary residence that “shares” a single-family lot.  ADU advocates say ADUs are a “smart way to supply the so-called ‘missing middle’ price range of housing.  Additionally, ADUs help enable seniors to stay in their homes by generating rental income from their ADUs.  This housing option also helps make communities more inclusive economically and racially.

In Connecticut, a new law allows ADUs in all single-family zones as of right – no public hearings and no special permits.  This new law also includes an opt-out provision for municipalities if zoning commissions and municipal legislative bodies vote to not comply before January 2023.

Legislation proposed in New York would legalize ADUs statewide.  This legislation also calls for the creation of a lending program to assist low- and moderate-income homeowners secure financing to build an ADU on their property or bring an existing ADU up to code.

Organizations such as AARP are big supporters of ADUs.  According to the director of AARP’s Livable Communities program Danielle Arigoni said, “We know from our (membership) surveys that well over three quarters of people over 50 want to age in place at home in their community, but less than half think they will be able to…ADUs are a really elegant solution to diversifying the choices that people have in housing.”

Likewise, FIFA (Federal Housing Finance Agency) is looking at options to both ease the cost ADU construction and lower the cost of mortgages for homes with ADUs.

Thanks to The New York Times.

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