Accessory Dwelling Units (ADUs): What Homeowners Should Know Before You Build

Accessory Dwelling Unity in the form of a tiny house in back yard with wooded lot and metal roof

It’s not surprising that Accessory Dwelling Units (ADUs) have become a popular option with a nationwide shortage of affordable homes, a high cost of living, and skyrocketing interest rates.

There are 42 million renters across the U.S, with over 21 million renters considered cost-burdened, spending more than 30 percent of monthly income on housing costs. That represents almost half (49.7%) of all renters.

That cost burden does not account for other necessities such as food, health insurance, child care or clothing. Additionally 18.8 million homeowners are spending more than 30% of their monthly income on home costs. Creating a large population of cost-burdened homeowners.

Although regulations vary from state to state for building AUD’s, currently more states are adopting more favorable regulations as a way to help ease housing shortages.

Rental cost burdened households by race, asian 1 million; white 10.4 million; Indian or Alaskan 229k; native Hawaiian 53k; two or more races 2.8 million; hispanic 4.8 million

Property owners across New England have been utilizing ADU’s for additional income, home offices, multigenerational living, and as a way to increase living space and property values. Massachusetts recently passed state legislation, which overrides local zoning for discretionary permits. Thus AUD’s are now the owners right to build, as second living space in a single family dwelling zone.

Local municipalities still dictate septic requirements, property setbacks, site plan reviews, and if the property can be used as a short term rental.

Here’s what you should know if you’re thinking about adding an ADU.

2. Who Benefits From An ADU?

rental income sign for accessory dwelling unit income for property owners

Both tenant and property owners benefit:

  • Rental income for property owners
  • More options for older adults to have a caregiver live near by, but still maintain privacy
  • Affordable rental costs for tenants
  • Multi-generational family units, allows older parents to downsize, stay in their neighborhood, as their grown children raise a family in the home they grew up in
  • Snow bird affordability to keep an affordable rental where they have roots
  • Some tenant and property owners make arraignments for assistance with upkeep and maintenance with tenants to lower rent, and help the homeowner share in the upkeep of a yard & maintenance

4. Plan for Utilities & Sewer / Septic Tie-Ins

utility tie ins for ADU; gas, water, electricity, wifi symbols shown over a house

Your new ADU will need proper connections for water, sewer (or septic), electric, and possibly gas. In rural areas, your existing septic system may need an upgrade to handle the added load.

Even if you plan to use the space for yourself now, plan for the option of a rental for the future by separating meters. Working with an experienced contractor helps you avoid surprises. 

 6. Know the Costs 

lot planning drawing, calculator and pen for Accessory Dwelling unit building

Building an ADU isn’t cheap, but it’s often more affordable than buying a bigger house. Costs will vary depending on your design and needs.

Many homeowners recover costs over time through long-term rental income and increased resale value. It’s important to work with a reputable contractor to address your needs and evaluate your site.

Helpful References for New England Homeowners Looking to Build an ADU:

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