The latest amenity for homeowners is another smaller home. These add-ons are
known as Accessory dwelling units or ADU’s. An ADU can be as large as a free-
standing 2,000 square foot house, or as small as a little studio apartment above the
garage, in the basement, or as an extension. Cities are making zoning changes to
increase low-income housing and homeowners rent them out to reduce their
ADU’s typically cost around $100,000 to construct, but some builders are offering
them as an option on new construction. According to a recent survey, hosting out-of-
town visitors or renting to tenants are the top reasons consumers would consider
an ADU according to a 2022 Freddie Mac survey, but many homeowners also use
them for home offices or other personal uses.
ADU’s aren’t going to solve the housing shortage on their own, but if you can make
the initial investment and don’t mind being a landlord, renting out an ADU can cover
part of your monthly housing costs.