Home improvement professionals say they’re fielding more inquiries from homeowners about adding accessory dwelling units—often nicknamed “granny flats.” A fifth of remodeling contractors say they undertook projects over the last year to create an ADU by converting an existing space, and a similar number say they created an ADU by building a new addition to a property, according to a new survey released by the National Association of Home Builders.
ADUs are smaller units added to a property, and they can be pricey to build. Only 6 percent of remodeling contractors report completing an ADU project for less than $25,000. Three-fourths say ADU projects cost at least $50,000, and 28 percent report projects costing at least $150,000.
ADUs usually require a building permit, but local and state ordinances vary significantly across the country. Some areas will not allow them at all. There are no federal standards or programs that track ADUs.
ADUs have been cited by industry experts as one possible solution to low inventory, and that has prompted some cities to explore ordinances or programs to add more ADUs to existing properties. For example, Fannie Mae last year picked an ADU program in Denver as one of its three “innovative ideas” for tackling housing shortages. Through this program, city officials and community development nonprofits work together to educate low-income homeowners about how to build ADUs that they can then rent out to earn extra money.