Building Backyards, Building Futures: The Power of Accessory Dwelling Units to Transform American Housing
The solution to one of our most pressing national issues could be found in our backyards. A growing trend in the zoning policy landscape hints at such a possibility, painting a picture of a future where homes are more affordable, equitable, and accessible. This once-in-a-generation opportunity is emerging through the rise of Accessory Dwelling Units (ADUs), small homes, or apartment units on the same property as an existing single-family home.
Nationwide or state-by-state adoption of pro-ADU policies can profoundly transform the housing industry and fundamentally rebalance our housing demand and supply.
ADUs: An Underutilized Housing Solution
An Accessory Dwelling Unit (ADU) is a zoning designation for a smaller home or apartment unit on the same property as a single-family house. These units can be standalone or attached to the main dwelling, serving as a home for family members, caregivers, or renters. While some cities and towns across the United States have passed zoning laws allowing ADUs, these laws often create friction instead of increasing the housing supply.
The California Case: A Trailblazer for ADU Policy
California, a state known for its housing crises and policy innovation, provides a compelling case study. In 2019, the state legislature passed several supportive bills (for example, AB 68, Ting) permitting ADUs by right statewide, provided certain requirements were met. CA HCD has been tracking the overwhelmingly positive response; ADU permits shot up from 8,905 in 2018 to 23,663 in 2021 and nearly 30,000 in 2022, compared with 66,000 permits for single-family homes.
The California policy innovation reduced friction and rapidly boosted ADU adoption across the state, serving as a practical model for other states to learn from.
The Power of State-wide ADU Policy
A state-wide ADU policy can effectively facilitate the establishment of ADUs, providing a framework for municipalities to address their housing needs without disrupting community character. This approach also creates an avenue for municipalities to secure support from the state to achieve their housing objectives.
Other states could unleash a powerful new industry by replicating California's ADU policy. This industry promises to attract innovators to the built environment and offer substantial growth opportunities for the construction and building sectors. The potential is enormous, with current projections suggesting that the ADU industry could burgeon into a sector worth over $30 billion by 2030.
ADUs and Wider State Initiatives
Embracing state-wide ADU policy could enhance existing initiatives to combat climate change, improve energy efficiency, and finance affordable housing. States that adopt housing policies for supply and regional competitiveness will be better positioned to attract and retain the talent necessary to grow their economies.
Breaking the Single-Family Zoning Dam
The dam of single-family zoning is finally breaking. States such as Washington, Colorado, Arizona, Vermont, Oregon, and Massachusetts are actively considering similar ADU policies. ADU policy appears to have bipartisan support, but the missing factor tends to be data. Bequall has worked hard to analyze the ADU opportunity in markets down to the individual parcel level to help governments better understand the opportunities and how to navigate the policy conversations with their stakeholders.
The Time for ADUs is Now
Adopting state-wide ADU policies could stimulate a significant new industry, draw innovators to the built environment, offer significant growth opportunities for the construction and building sectors, and accelerate the creation of a desperately needed housing supply.
We have an opportunity to shape the future of housing right in our backyards. As policy architects, industry leaders, and citizens – the question remains: will we seize it?
Your Backyard, Your Future
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