Growth of the Backyard Bungalow

Accessory dwelling units are popping up in more backyards, CNBC reports. These standalone housing units are either serving as rentals to generate extra income for homeowners or extra space for aging parents or adult children who move back home. The growing interest in ADUs has sparked changes to local and state zoning rules to allow for more construction. Some communities are even pointing to ADUs as a solution for a lack of affordable housing.

“ADU is still, for the most part, an affluent homeowner product, meaning you have to have cash on hand to take this on,” Steve Vallejos, CEO of Prefab ADU, told CNBC. His company’s most popular ADU model is a 288-square-foot home that costs about $105,000 to build. ADUs are “addressing financing, it’s addressing standardizing products within cities, and then also it’s creating partner relationships with contractors, architects, and even other builders,” Vallejos says. “There are many different scenarios that people look into based on income, lot size, different zoning rules—so we build ADUs that start at about 150 square feet up to 1,200 square feet.”

Consider Adding a ‘Granny Flat’

Home improvement professionals say they’re fielding more inquiries from homeowners about adding accessory dwelling units—often nicknamed “granny flats.” A fifth of remodeling contractors say they undertook projects over the last year to create an ADU by converting an existing space, and a similar number say they created an ADU by building a new addition to a property, according to a new survey released by the National Association of Home Builders.

ADUs are smaller units added to a property, and they can be pricey to build. Only 6 percent of remodeling contractors report completing an ADU project for less than $25,000. Three-fourths say ADU projects cost at least $50,000, and 28 percent report projects costing at least $150,000.

Source: “Many Remodelers Are Now Creating ADUs,” National Association of Home Builders’ Eye on Housing blog (May 22, 2019)

More Home Owners “Add Second Units to Existing Homes”

Household sizes are growing: More home owners are renovating homes to add second units so they can take in roommates to bring in extra cash or have a space for aging parents or adult children who want to move back home. 

Michael Litchfield, author of In-Laws, Outlaws and Granny Flats, says many of these second units are either converted garages, attics, unused rooms or basements, or actual additions or detached cottages.

More cities are passing laws to make it easier to build second units too. These are usually called accessory dwelling units or ADUs. For example, Denver recently changed its housing code to allow second units, USA Today reports. And in Hudson, Wis., housing codes now allow garage apartments.  

Mostly driven out of economic worries and tighter budgets, more “people are doubling up, even tripling up,” says Arthur Nelson, director of the University of Utah’s Metropolitan Research Center.

Source: “A House Divided Helps Pay the Bills,” USA Today (Aug. 17, 2011)

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