What Is an ADU?

An accessory dwelling unit, or ADU, is actually a simple and old idea. To put it in simple terms, it’s having a second small dwelling right on the same grounds (or attached to) your regular single-family house, such as:

• an apartment over the garage
• a tiny house (on a foundation) in the backyard
• a basement apartment

An ADU is legally a part of the same property as the main home regardless of its physical form (backyard cottage, basement apartment, etc.). The ADU and home may not be bought or sold separately. The owner of the main home is also the owner of the ADU. They cannot be separated as a whole legally.

ADUs are Making a Comeback

Though ADUs are an old idea (like alley apartments in DC, or carriage houses in fine old Seattle homes), stopped being built, used, or created as often beginning in the middle of the 20th century.

Now, however, they’re coming back, and they have lots of names. Planners call them ADUs (Accessory Dwelling Units), but they’re also known as granny flats, basement apartments, in-law units, laneway houses, over the garage rentals, secondary dwelling units, and a hundred other names. An ADU can be tiny houses, however, tiny houses are not always ADUs.

Homeowners build them for lots of reasons, but the most common goals, are gaining extra income via rent or housing a family member.

Housing Shortage & Environmental Footprint

With the housing shortage and the shortage of areas to build new homes, there are many reasons why ADUs make sense. Consider the environmental, lifestyle, and financial reasons alone to see the value. Though homeowners buy houses and live in them for decades, their actual needs change over time. The way that houses are currently being built doesn’t reflect those changes, especially the way households may spend decades with just 1 or 2 members. Many American houses are too big for a family with only 1 or 2 members living there. Size is probably the biggest single factor in the environmental impact of a house.

You could have your best friend, your mother, or your grown kid, live with you. As the nation’s population ages the kind of flexibility and support of the ADUs could really help many families. Homeowners want to stay in their homes as they age, but finances and design can be a problem. An ADU could help aging homeowners meet their needs without having to move and leave the neighborhood they love.

We Get It

In many cities, homeowners can get legal rental income from their permitted ADU. Or they could live in the ADU and rent out the main home. This adds a lot of flexibility to the finances.

Here at I Live in a Bank, we understand that ADUs are major construction projects. We will assist homeowners with the design, financing, permitting (city approval), project management, and long term financial strategies.