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Why are ADUs such a good idea?

There’s plenty of reasons why ADUs are good for personal and financial reasons, which are described below. But, before we cover that, it’s good to understand the range of reasons why ADUs can be good for a community.


  • Generates jobs during construction. Approximately half of the cost of new construction will go towards labor, while half will go towards materials. Labor is inherently a local job, so when you construct, you are keeping money circulating in your community.
  • Enhances property tax base for the city. New residences generate more tax revenue and more taxable income for a city.
  • Creates housing near employment centers and near public transportation, where there is demand for housing.


  • Building small is building green: the smaller the building, the less energy, material, and waste will be used in the construction, residence, and maintenance of the lifespan of the building.
  • Buildings are responsible for approximately 49% of the energy used in the United States. The smaller the spaces in which we dwell, the less energy we’ll use.
  • ADUs are built where there is a market demand for housing. These locations are also the locations where residents are able to walk, bike or ride to work. Transportation (including commuting), is responsible for 33% of the energy used in the United States.
  • Providing more habitable, flexible dwelling options in a pre-existing urban core, utilizes existing governmental infrastructure (eg. roads, sewers, schools), and reduces the demand for expanding infrastructure in far lying reaches of a metropolitan area.


  • Housing stock isn’t matching demographic trends. More and more people are seeking smaller, urban residences. This trend includes “baby-boomers”, generation X-ers, and non-nuclear family partners.
  • Comfortable, affordable, and practical housing for multi-generational households
  • ADUs can provide a means for adult children to give care for their aging parents in a semi-independent living arrangement.
  • Can provide elderly people with sense of personal security and companionship
  • Alternatively, it can provide young adults (with children or other responsibilities) with an affordable urban dwelling adjacent to their parents.
  • Provides organic opportunities for groups and individuals to live and share socially with one another but to have their own living space.
  • Provides more affordable housing options in a neighborhood without changing neighborhood character

Personal Motivations for Building an ADU


The main motivations for homeowners wanting an ADU are due their potential to serve as extra sources of income and the residential flexibility that they can offer. By and large, the most common reason for building an ADU is financial.

Let’s say your one-bedroom ADU rents out for $750/month and your house mortgage is $1,500/month. Well, if you’re living in the house and renting out the ADU, you’ve just cut your mortgage in half to $750/month.

Alternatively, some homeowners may choose to live in their ADUs and rent out their main house, which is even more lucrative than renting out the ADU. That same homeowner above could live in their ADU and rent out their house for $1,500 covering their whole mortgage.

Flexible Housing

The other common reason for wanting an ADU is to have a standalone place for a family member, close friend, or partner to reside. While living in the same domicile may not be appealing for grandparents, parents, or their children, living in close proximity to one another can be very appearing for a range of pragmatic reasons. It is a common arrangement for grandparents to live in an ADU to help raise their grandchildren. Other common house/ADU arrangements may involve people who are providing bartered services for one another in exchange for rent; co-parenting, elderly care, caretaking.

Others may live in the main house, but will simultaneously use the ADU as an office, guest house for family, and a furnished bed and breakfast when the time is right.

There are host of flexible living arrangements that are provided by ADUs. Given the demographic shifts that we’re undergoing in the United States, it’s also fair to say that there is a market demand for smaller houses. Nuclear families are a diminishing demographic while single parents, and adult partners without children are on the rise. Small, alternative housing options such as detatched ADUs are in demand for this shifting housing demographic

About Kol Peterson

Kol is an ADU consultant, advocate and author of Backdoor Revolution: The Definitive Guide to ADU Development. Read more here: and learn about building your own at Email at

One comment on “Why are ADUs such a good idea?

  1. Pingback: Breaking Bad is over. It’s Time to Break Even. | Accessory Dwellings

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This entry was posted on October 29, 2011 by in Policy & Trends and tagged , , , .
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