Accessory Dwelling Units
By: Chris Allen
Accessory dwelling units, or ADUs, are one of the most practical first steps a community can take toward a more incremental, affordable, and adaptable housing system. An ADU is a small, independent home located on the same lot as a primary residence. It may be a backyard cottage, garage apartment, basement apartment, internal suite, or small addition. What matters is not the form, but the function: an ADU allows one parcel of land to support one more household without requiring large-scale redevelopment, speculative land assembly, or major public infrastructure expansion. AARP describes ADUs as self-contained residences with their own kitchen or kitchenette, bathroom, and sleeping area, sharing a lot with a larger primary home.
From an incremental development perspective, ADUs are important because they allow ordinary people to participate in housing production. They create a pathway for homeowners, small builders, tradespeople, designers, and local lenders to add housing one project at a time. This is fundamentally different from a housing system that depends almost entirely on large developers, large parcels, large capital stacks, and large political fights. Strong Towns describes ADUs as “bottom-up, decentralized, incremental, scalable and adaptable,” which is exactly why they fit so naturally into an IncDev approach to local prosperity.
ADUs are not a silver bullet for housing affordability, and they should not be oversold as one. But they are a high-value, low-disruption reform that helps communities add rental homes, multigenerational housing, aging-in-place options, caregiver housing, starter homes, and modest income opportunities for property owners. Many have long pointed to ADUs as a way to provide more affordable and sustainable housing choices, especially for seniors, moderate-income workers, and people who would otherwise be priced out of the neighborhoods they serve.
The policy lesson is clear: allowing ADUs “in theory” is not enough. Many communities technically permit ADUs while surrounding them with rules that make them difficult or impossible to build. Common barriers include owner-occupancy mandates, excessive parking requirements, large minimum lot sizes, restrictive setbacks, low height limits, discretionary hearings, high fees, utility connection requirements, and long approval timelines. Research summarized by Enterprise Community Partners finds that recent regulatory reforms, especially in West Coast cities, have helped increase ADU permitting, but that production depends on making the process simple, predictable, and financeable.
IncDev’s position is that communities should legalize ADUs by right in residential neighborhoods and then build the local capacity needed to make them real. The best ADU policies are not just permissive; they are practical. They should allow both attached and detached ADUs, remove unnecessary parking mandates, permit reasonable size and height, avoid subjective design review, reduce or waive excessive fees, allow long-term rental use, and provide clear pre-approved plans or pattern-book guidance where possible. AARP’s model state act and local ordinance is a useful starting point for jurisdictions that want to move from general support to implementation.
The deeper point is that ADUs help communities relearn small-scale development. A good ADU ecosystem requires local designers who understand small lots, builders who can work at a modest scale, lenders who can underwrite unusual but sensible projects, appraisers who understand the value being created, and building officials who can administer rules consistently. That is why ADUs belong in the same conversation as missing middle housing, pre-approved plans, small developer training, and zoning reform. They are not merely a backyard housing product; they are a training ground for a healthier local development culture.
A strong ADU policy should be judged by whether a normal property owner can understand the rules, hire local professionals, obtain financing, get a permit, and complete a safe, useful home without needing to become a zoning expert. When that is possible, ADUs become one of the simplest ways to add housing gently, keep wealth circulating locally, support aging households, and make better use of land and infrastructure that communities have already paid for.
Best supporting links
Strong Towns — Accessory Dwelling Units: Top Content
A concise Strong Towns framing of ADUs as bottom-up, incremental, scalable housing reform. (Strong Towns Action Lab)AARP — Accessory Dwelling Units, Defined
A clear, public-facing explanation of what ADUs are and why they matter for households of all ages. (AARP)AARP — ADU Model State Act and Local Ordinance
A useful policy template for state and local officials looking to legalize and enable ADUs. (AARP)CNU — Accessory Dwelling Units
A New Urbanist case for ADUs as affordable, age-friendly, neighborhood-compatible housing. (CNU)Enterprise Community Partners — Four Ways to Boost ADU Production
A practical summary of policy reforms that help move ADUs from legal possibility to actual production. (Enterprise Community Partners)Terner Center — Jumpstarting the Market for Accessory Dwelling Units
A research-backed look at why ADU legalization needs to be paired with permitting, financing, and implementation reform. (ternercenter.berkeley.edu)