GUEST COLUMN.

Local governments across the US and Canada are grappling with an unprecedented housing shortage, rising costs, and how to accommodate a diversity of housing needs. One part of the solution has been hiding in plain sight.

Accessory Dwelling Units (ADUs)—those "granny flats," garage or basement apartments, and backyard cottages your grandparents might remember—are experiencing a remarkable renaissance. And for good reasons.

ADUs aren't new—they're just back

Before World War II transformed American housing patterns, secondary dwelling units were commonplace. Large houses routinely included smaller units. It was practical, economical—and perfectly normal.

Then came the postwar era's embrace of single-family exclusionary zoning. Suddenly, what had been a natural part of the housing ecosystem was phased out in favor of a one-size-fits-all suburban model.

Now, facing a housing shortage, decades in the making, communities are rediscovering what previous generations understood: ADUs are a gentle yet effective way to add density to existing properties and neighborhoods. They are flexible over time to meet the needs of any household, including housing family, providing rental income, and making aging in place possible. And they work in any jurisdiction—rural or urban—in any residentially zoned area.

A growing national movement for housing solutions

In California, the numbers tell a compelling story. Less than a decade ago, California issued about 1,000 ADU permits annually. Today, that figure has skyrocketed to over 26,000 units per year—representing 21.3% of all new housing permits in the state. In high-demand regions like Los Angeles and the San Francisco Bay Area, that percentage climbs even higher.

This isn't a fluke or a temporary trend. California's strategic approach to ADU policy reform starting in 2016 has relaxed standards, streamlined permitting, and reduced regulatory barriers in every community, creating a thriving market that's here to stay.

California isn't alone in recognizing ADU potential. Oregon pioneered early ADU policies, and now states like Colorado, Massachusetts, Washington, Utah, Arizona, Maine, Arkansas—even Canada—are joining the movement. Each jurisdiction is adapting the concept to local needs while recognizing ADUs as part of a comprehensive solution to increase housing options.

This widespread adoption isn't accidental. ADUs offer something rare in housing policy: a solution that benefits multiple stakeholders simultaneously.

Natural affordability and climate benefits

ADUs are inherently more affordable than traditional market-rate housing. Their smaller size means lower overall rents, even when the cost per square foot remains high. Research shows that ADUs often rent for 6% less than comparable non-secondary units, with many homeowners offering below-market rates to family members or friends. While 500-750 square feet is a common size for ADUs, detached units of 800–1,000 square feet can help fill the gap in many cities for two-bedroom rentals.

Another benefit comes from an environmental perspective. The smaller footprint of ADUs requires fewer materials and less energy for heating and cooling. When ADUs are built as internal conversions or above existing garages, they add no impervious surface area. Most importantly, they increase density in existing neighborhoods, supporting local businesses and public transit while reducing vehicle miles traveled.

Recent Colorado research on infill housing—including ADUs and multifamily housing along commercial corridors—shows dramatic potential for greenhouse gas emission reductions.

Solving housing challenges for homeowners and jurisdictions

For homeowners, ADUs offer multiple advantages: additional rental income to help with mortgage payments, housing for aging parents that maintains independence while keeping family close, and increased property values. Many retirees find ADU rental income particularly valuable as other income sources decline.

For jurisdictions, ADUs increase housing supply without requiring new infrastructure investments or land acquisition. They provide natural affordability without subsidies, help address demographic shifts toward smaller households and can contribute to economic development by supporting local contractors, architects, and related businesses.

The diversity of ADU types—internal conversions, attached additions, detached structures, above-garage units—means they can work in virtually any residential context.

Key lessons for implementation success

·        Experience from early-adopting jurisdictions offers clear guidance for communities considering ADU policies:

·        Embrace "by-right" development, with clear objective standards. Discretionary review processes can kill ADU development through uncertainty, cost, and delay.

·        Ease and simplify rules. Overly restrictive setbacks, parking requirements, or size limitations can make ADU development expensive and impossible. Successful policies balance building requirements with a yes-to-ADUs attitude.

·        Streamline the ADU permit process. Internally auditing the application and permit process and aligning all departments that touch an ADU project can save both staff and homeowners time while getting more ADUs built.

·        Address financing barriers. Rising construction costs and financing challenges remain significant obstacles. Some communities are exploring revolving loan funds, fee waivers, or partnerships with community development financial institutions to help qualifying homeowners.

·        Plan for success. Identify ADU goals to guide program development and incorporate them into overall housing goals. Ensure staff involved in the ADU process are knowledgeable across departments and systems are in place.

·        Develop solid public information. Homeowners building ADUs become developers overnight for most likely the only time in their lives. They need clear and consistent information on the ADU process–from getting started to move-in, online and at the counter.

·        The question isn't whether ADUs are right for your community, it's whether your community is ready to make them work. The future of housing might in part look a lot like the past, but that's exactly what we need.

The contents of this Guest Column are those of the author, and not necessarily Barrett and Greene, Inc. 

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