ADU-Friendly States: A Detailed Guide For Homeowners

In today's housing market with rising costs and limited affordable options, Accessory Dwelling Units (ADUs) are becoming an increasingly attractive solution for homeowners. Not only can they provide additional living space for tenants or family members, but they can also generate rental income and potentially increase the value of your property by up to 35%.

Here's what ADUs are and which states are leading the way in ADU-friendly legislation.

What is an ADU?

An Accessory Dwelling Unit (ADU) is a second dwelling unit on the same property as the primary residence. ADUs come in various forms:

• Detached ADU: A building separate from the main residence, such as a backyard cottage

• Attached ADU: It shares its structure with the main residence, often with its own entrance

• ADU above the living area: Access via a staircase inside or outside the main house

• ADU above the garage: A second-floor living area above an attached or detached garage

• Garage conversion ADU: An attached or detached garage that is converted into living space

THe Most Adu-Friendly States

Some states have taken significant steps to make it easier for homeowners to build ADUs. Here are the six most ADU-friendly states with their most important laws:

1. California

California has been at the forefront of ADU legislation since 1982. Recent laws include:

• SB 9: Allows ADUs on property zoned for single-family or multi-family residential use

• AB 671: Requires cities and counties to develop plans for the expansion of ADUs

• AB 68: Prohibits cities from imposing minimum lot sizes for ADUs

• SB 13: Eliminates fees for ADUs less than 750 square feet and limits owner-occupancy requirements

• AB 1033: Allows homeowners in participating cities to sell ADUs separately from the main lot

California also offers a $40,000 grant through the California Housing Finance Agency (CalHFA) to reimburse homeowners for the cost of building ADUs.

2. Oregon

Oregon has been ADU-friendly since 1981. Recent statewide laws include:

• SB 1051: Allows ADUs in cities throughout Oregon

• HB 2001: Encourages the construction of ADUs on land previously reserved for single-family homes

• Oregon prevents cities from imposing common ADU barriers such as owner-occupancy requirements, parking requirements, and discretionary reviews for ADU permits.

3. Washington

Washington has allowed ADUs in its largest cities since 1993. Recent legislation includes:

• HB 1337: Considered one of the strongest statewide ADU laws because it repeals parking requirements, ends owner-occupancy requirements, limits accessory dwelling units, and legalizes two ADUs per lot

• 2SSB 5045: Allows certain counties to grant property tax exemptions for ADUs rented to low-income households

• HB 1110: Requires cities to allow more "middle housing," including ADUs

4. Connecticut

Connecticut passed HB 6107 in 2021, which legalizes ADUs anywhere single-family homes are allowed. Towns were allowed to opt out until 2023, but many of them still established their own ADU regulations.

5. Maine

The first ADU law in Maine, LD 2003, was passed in 2022. It allows homeowners to build an ADU on land zoned as single-family residential, requires ADUs to be at least 190 square feet, and prohibits towns from imposing additional parking requirements.

6. New York

While New York doesn't have comprehensive ADU legislation like some other states, it does offer financial incentives:

• The Plus One ADU Program: Combines low- or no-interest capital loans and home improvement grants

• 85 million dollars in state-allocated grant funds to support the creation of ADUs

What This Means For Homeowners

If you're a homeowner in one of these states, it may be easier for you to build an ADU on your property. Even if you don't live in one of these states, the trend toward ADU-friendly policies is growing nationwide.

Before you plan your ADU, consider the following:

• Check local zoning regulations and building codes

• Calculate the potential return on investment

• Determine how you plan to use the space (rental, family dwelling, etc.)

• Explore financing options, including state or local incentives

As more states recognize the benefits of ADUs, it's becoming easier for homeowners across the country to build these multi-use spaces on their properties, which could alleviate the housing shortage and create additional income opportunities.

Cover Photo: Courtesy of https://www.buildinganadu.com

Disclaimer: This briefing document is intended for informational purposes only and does not substitute for reviewing the official Municipal Code and consulting with your Community and Economic Development Department in the community you reside in.