What is an ADU: Accessory Dwelling Units explained

An accessory dwelling unit, usually just called an ADU, is a secondary housing unit on a single-family residential lot. The term “accessory dwelling unit” might sound institutional, but it’s the most commonly-used term across the country to describe this type of housing. Because the full name is a mouthful, we use the shorthand “ADU” instead.

ADUs are defined by the fact that they’re a type of housing unit—NOT a standardized structural form. When learning about a new design concept like an ADU, it’s natural to want to know exactly what that concept looks like in the flesh. However, ADUs vary in their physical form quite a bit. We want to embed the ADU design concept in or brains as a tangible object that we can mentally reference. Let’s broaden that mental model by exploring and understanding the range of common ADU types.

What are the main Types of ADUs?

ADUs come in a variety of forms: detached new construction, garage conversion, bump-out, basement conversion, and more. This list of images shows the most common structural forms of ADUs as well as some of the other terms you might hear to describe them).

1)  Detached new construction ADUs, also called backyard cottages, granny flats, laneway houses, or DADUs, depending on the jurisdiction. This type of ADU is construction on the lot of a single family home, often in the back or side yard.

2) Garage conversion ADUs: Transform your garage into a home.

3) ADUs above a garage or workshop, or attached to it. In some areas, these may be called garage apartments or carriage houses:

Not sure whether you think ADUs are cool? The Fonz lived in an ADU above the Cunningham’s garage in the TV show Happy Days. Enough said.

4) Addition ADUs or “bump-out ADUs”: These are added onto houses directly, benefitting from shared walls and easier access to utilities.

5) Basement conversion ADUs, also commonly called basement apartments, mother-in-law units, in law units, secondary suites, English basements, accessory apartments, and a host of other names.

Here’s the inside of a basement ADU:

6) Internal ADUs, where part of the primary house other than the basement is converted to an ADU.

What are the common traits of ADUs?

While their structural forms vary, ADUs share many common traits and face similar design and development challenges. For one thing, the fact that they’re secondary housing units on single-family residentially zoned lots puts ADUs into a unique category. ADUs also have some other distinguishing characteristics that help further define, differentiate, and distinguish them from other housing types.

• ADUs are accessory and adjacent to a primary housing unit.

• ADUs are significantly smaller than the average US house.

• ADUs tend to be one of two units owned by one owner on a single family residential lot.

• ADUs tend to be developed asynchronously from the primary house by homeowner developers.

• A large range of municipal land use and zoning regulations differentiate ADU types and styles, and dramatically affect their allowed uses

• Vast numbers of informal ADUs exist compared to permitted ADUs.

These differentiating characteristics make ADUs a distinct type of housing. Until recently, there has been a lack of common understanding around the language and best practices of ADU development.

This website and the book Backdoor Revolution, fixes the lack of understanding by providing clear information about ADUs and how average homeowners develop them.

Next, we’re going to introduce a range of contextualizing information, such as why permitted ADUs are so rare and what demographics are driving ADU demand.

How many ADUs are there?

In over a dozen academic studies and professionally funded surveys that have been conducted on the presence of informal ADUs (detailed in appendix 4 of Backdoor Revolution), they have all found that a whopping 10-20% of all the housing units in their study area are informal ADUs. Granted, these studies were generally conducted in heavily populated metro centers, such as Los Angeles, San Francisco, Portland, and Vancouver, BC, but studies have also been conducted more broadly in metropolitan areas such as the Bay Area and the Boston Metropolitan Area, and the results have been similar. 

Could 1/10th of all residential housing stock in the US be informal ADU-type development? If so, this means there are more than fourteen million ADUs out there.

14,000,000! It seems almost unfathomable, right?

But as I reflect on my personal experience, it actually starts to seem entirely possible. Growing up, my mom’s house had an informal ADU in the attic. My dad’s house across town also had had an informal ADU. When I moved to DC, my first home had an informal ADU in the basement.

10% of all housing stock doesn’t seem like such a far-fetched percentage when I start to think about all the informal ADU type dwellings I’ve lived with for the majority of my own life.

Indeed, the presence of informal ADUs may be the single best indicator of the need for ADUs in general. It’s a “gray market” expression of the demand for this form of housing.

Cities where ADUs are taking hold

Some cities are bringing this shadow form of housing into the light by design. Portland, Oregon, is the de facto leader in the US for this particular type of infill housing. Vancouver BC is the leader in North America.

Austin, Texas has also experienced a substantial bump in ADU development since legislative zoning changes in 2015.

There are many signs that legally permitted ADUs will become more mainstream. Legislative statewide laws in California marked a tipping point for ADUs in that influential state.

Some cities are jumping on board the ADU train by improving their ordinances and development regulations to make ADUs easier to build. Other cities are watching from the sideline. Frankly, there’s an underlying sentiment of resistance to change, and it’s politically challenging to pass good ADU regulations. Seattle provides the nation with a cautionary tale of the fear that surrounds the idea of ADUs amongst some neighborhood associations. Seattle’s city commissioner’s valiant efforts to improve ADU regulations were hung up in a legal battle and were postponed by a year as a result.

The demographics driving demand for ADUs

Why are some cities so eager to improve their ADU codes?

Well, for starters, most households in the United States are now 1 and 2 person households. Yet, most of our legacy housing stock, and even our new residential housing stock, is designed for families of 4 or 5 people. That may have made sense 70 years ago. But, things have changed.

3 and 4 bedroom homes no longer match the demographic realities of the United States:

1-2 person households now represent 62% of the country’s households. Only 38% of the nation's households have more than 3 or more people in them.

Close to 2/3rds of the population in the US are living in 1-2 person households!

Oooh——wait. I know what that chart looks like:

Year by year, 1-2 person households are forced to eat up the single family housing stock (housing pellets, if you will) that was designed for nuclear families, not because they want or need to live in big homes, but because there simply aren’t enough houses built in residential areas designed for 1-2 person households.

Among other demographic factors at play, single person households have become extremely common in major cities, representing more than ⅓ of the households of many cities.

Why cities care about ADU development

There’s a lot of reasons that municipalities may want to spur ADU development. Here’s a few common reasons:

Economic benefits of ADUs

• ADUs provide flexible dwelling options in central city neighborhoods, utilize existing governmental infrastructure (eg. roads, sewers, schools), and reduce the demand for expanding infrastructure in the sprawling reaches of a developed metropolitan area.

Environmental benefits of ADUs

• ADUs provide housing with a relatively small environmental footprint. New, detached ADUs provide rental housing that is 44% smaller per capita than standard, new single family rental units. Overall, new ADUs provide housing that is 33% smaller per capita than standard, new single family units. In a building lifecycle, smaller residential spaces use less energy in construction, deconstruction, and habitation.

Social benefits of ADUs

• ADUs provide more affordable housing options in residential neighborhoods without dramatically changing a neighborhood’s character, especially when compared to other new housing forms.

But, ADUs aren’t a policy panacea….yet.

There are simply too few permitted ADUs to make a real difference in the housing stock. But even if they aren’t going to solve all a city’s problems, ADUs may help homeowners solve some of their own problems. The most common motivation for ADU development is rental income potential, followed by the prospect of flexible living space for multigenerational households.

There are many reasons to appreciate the benefits of ADUs, but there are also many reasons why so few people have chosen to build permitted ADUs.

On this website, book and in the Building an ADU course, I cover the pragmatic steps to developing a permitted ADU on a property, what the common stumbling blocks are, and strategies to overcome those stumbling blocks. We’ll talk about how much they cost to build, how to pay for them, and the return on investment. We'll cover the regulations, finding a designer and builder, basic building science, options for using or renting the ADU, ADU design principles, ADU utility connections, and more. Finally, we'll review the entire step-by-step process to ADU development from start to finish.

Other FAQS about ADUs

What is considered an accessory unit?

ADUs have many synonyms. “Accessory unit” is one of them. An accessory unit is a secondary and architecturally diminutive unit on a property that already has a primary residential unit. In my ADU book research, I identified 64 synonyms.

Does an ADU require a kitchen?

Yes, ADUs must have a kitchen. In fact, the kitchen is the defining feature of an ADU that differentiates it from other additional habitable living spaces (like a bonus room).

Do I need a permit to build a guest house?

Yes, you need a permit from your local jurisdiction to build habitable living space on your property. If the space is non-habitable, and is under 200 sq ft, then sometimes you do not need a permit. But, in the case of building habitable living space, you’re always required to obtain a building permit. 

It is legal to build a house or an inlaw suite in your backyard?

In some jurisdictions, it is legal to build an accessory structure with habitable living space in the backyard. In other jurisdictions, it is not legal to build habitable living space in the backyard. Whether that habitable living space in the backyard can be classified as a house, is another matter. This depends on what your local zoning code says is permissible. In many cases, ADUs will be permissible. In other cases, an ADU may not be allowed, but alternatives such as a guest house or a detached office or bedroom with a bathroom may be allowed. 

Does an in law suite or guest house add value?

Yes, an in-law suite and guest house adds value to a property. The next logical question is, “How much value does an ADU add?”. Unfortunately, it’s impossible to provide a universal answer to this question. The contributory value of additions such as adding an ADU, guest house, or in-law suite, are difficult to measure.

What is considered an illegal apartment?

An illegal apartment is a synonym for an unpermitted ADU, or an informal ADU. This is an additional housing unit that is added to a property without the correct permits. However, there are subtleties here. Was the additional structure permitted? Was the interior finished habitable living space permitted? Was it literally just the oven and kitchen sink that weren’t permitted? These nuances are important to understanding how significant the zoning and building code violations actually are. 

what’s the difference between a tiny house on wheels and an ADU?

Tiny homes on wheels are on wheels. ADUs generally aren’t on wheels.

What’s next?

Ready to learn more about ADU development? It’s important to fully understand the design principles before you move on to the next stages of planning. Download my free eBook of ADU Design Principles to take your knowledge to the next level.