You own a single-family home, but you’d like more living space. As a result, you’re questioning whether to build an addition or an accessory dwelling unit (ADU). I’m sold on ADUs as the better option and I’m going to tell you why.
Deciding between building an addition or an ADU isn’t just about personal preferences. First and foremost, you need to find out if your city or county even allows ADUs. Then there are other issues to consider, including your return on investment (ROI) and potential resale value of your property.
My personal experience with ADU construction is in Florida. But I’ve been researching the topic for a while now, and I’m keen to share my findings with readers from all over the U.S. who need guidance choosing between these two options. Where you live and what you want can make a big difference. So, let’s dive in and see which direction you should take.
The fundamental difference between a home addition and an ADU is that ADUs are independent of the primary dwelling unit on a single-family property. Additions are rooms and other spaces that homeowners add onto the primary dwelling unit.
While an addition might contain everything a family member (or even a tenant) needs to live independently, including a bathroom and kitchen, legally, it remains part of the family home. It is also attached to the existing home. That said, an addition doesn’t have to include any special facilities. It can be a single room, or a lavish extension designed as part of a major remodel. It’s your choice.
ADUs may be attached or freestanding. They are always smaller than the primary residence and usually must include a bathroom and an area that can be used as a kitchen to make them fully functional. Cities and counties commonly specify minimum size requirements and sometimes other restrictions. But it varies immensely, so you’ll need to check out your local and/or state ADU building codes.
The legislation relating to ADUs in most parts of the U.S. has been substantially relaxed in the past couple of decades. But there are still areas that impose relatively severe restrictions and limit what can and cannot be built. (Here’s a link to our article Is Your Property Zoned To Build An ADU? Here’s How To Find Out.)
The other factor you will need to consider when weighing up the pros and cons of building an addition vs. an ADU relates to planning permission. In general, it’s easier to get permission to build an ADU. But again, it depends on local permit requirements.
Without going into a huge amount of detail, I’m going to compare planning permissions for additions vs. ADUs in several states, starting with Florida.
Almost all U.S. states have adopted the International Building Code (IBC), which forms the basis for their individual state building codes. But cities and counties also have building codes, and they are usually the ones enforcing the legislation.
Similarly, most states have policies and ordinances that govern ADUs, although local governments also have their own laws that provide additional guidelines and demands. Because there was no existing code to guide state policies, in 2009, the American Planning Association promulgated a model act. As a result, hundreds of municipalities and local authorities adopted ADU laws in response to state legislation. Some did their own thing.
So, it can be complicated and very confusing.
Because there are fundamental differences in planning permission procedures throughout the U.S., I have chosen three states to show you how important it is to do your homework thoroughly before you make a decision on which route to take.
But it’s also important to define your motivation. For instance, do you want somewhere for your in-laws or grandparents to live, or do you want a rental unit that will bring you a passive income?
Permission For Additions vs. ADUs In Florida
For decades, the hundreds of different codes and regulations covering permits and applications in Florida caused huge problems. The motivation for a comprehensive state code was primarily the threat of hurricanes, more specifically, Hurricane Andrew in 1992. So, in the late 1990s, Florida’s Building Construction Standards were implemented, at the time superseding all other existing construction codes and ordinances in the state.
In terms of these standards, unless it is a “manufactured home,” a permit is needed when constructing, erecting, altering, modifying, repairing, or demolishing a building. Unless a homeowner is approved as an owner-builder, a licensed contractor must apply for the permit.
This means that in Florida, basic state law applies to both additions and ADUs (unless they are manufactured units).
In about 2018, the Florida Housing Coalition compiled the Accessory Dwelling Unit Guidebook, a 60+-page document that discusses almost everything you are likely to want to know about ADUs.
Regulatory barriers are one issue. I was surprised to discover that 16 of Florida’s 67 counties don’t even address ADUs! It might have changed a little in the past couple of years, but this guidebook shows that 25 Florida counties explicitly bar the use of ADUs for long-term rental. So, if you’re hoping to rent your ADU out, you might need to think again.
There are also restrictions in terms of minimum property sizes if ADUs are proposed. Also, most counties insist that the owner of the property lives in the main house.
At least 12 don’t allow ADUs in single-family zoning districts (which I find odd, since this is where ADUs are normally permitted). It seems that Florida cities are a little more flexible than counties, though. For example, 11 of the largest 15 cities do allow ADUs in single-family districts.
Wherever you live in Florida, I suggest getting advice from a professional before you go ahead with either option. Ultimately, legislation could impact your decision.
For a little more detail, read our article all about building an ADU in Florida.
Permission For Additions vs. ADUs In California
Building, in general, is governed by the California Standards Commission and its Building Standards Code. And additions are covered by the same legislation, which is very strict. If you are planning to add an extension to your home, you’ll need to comply with these.
At the same time, the new housing legislation in California that is due to take effect in January 2022 aims to make it a lot easier to “build housing for all.” For example, you’ll be able to demolish an existing single-family home and build two separate units that don’t need to be attached and may be sold separately. Neither needs to be an ADU, which obviously has implications.
Of course, it’s not simple and there are restrictions. It’s also not clear how the new law will affect additions, but in all likelihood, you will still need to follow the established legal requirements.
The state of California is the undisputed leader in the U.S. when it comes to ADU permissions. The California State Legislature has done everything it can to facilitate the construction of ADUs in the state by easing land use and restrictive zoning regulations. But I’ve discovered that it’s not always that easy.
According to California ADU, part of the Care Institute of Governmental Studies at Berkeley University of California, the number of ADU permits issued in California between 2018 and 2020 increased from nearly 9,000 to 12,392. A total of 33,881 ADUs were permitted and 22,695 were added to the housing supply in the state.
Of these, about half (51%) are income-generating rental units. So, unlike parts of Florida, it seems that in California you are virtually guaranteed rental income if you opt for an ADU. If you’re wondering how much you can earn on rentals, California ADU reckons the median rental price is around $2,000, ranging from $2,200 in the San Francisco Bay area to $1,925 in the central coast region.
Another interesting statistic is that very few ADUs in California (only about 15%) are used for senior citizen housing.
On the downside, California ADU found that half of the homeowners wanting to build an ADU found it difficult to get a permit. It appears that design challenges and constraints, the local approval process, and the overall cost of construction are all barriers. Maybe this will improve with the new legislation.
Permission For Additions vs. ADUs In Washington
Washington’s State Building Code combines a bunch of national model codes that cover everything from construction and engineering requirements to plumbing, energy, and ventilation. Like most other states, the code is based on the IBC.
House additions are regarded as extensions to existing homes and you’re going to need a construction addition or alteration permit for your project. If it’s a very small remodel, Seattle will consider a subject-to-field inspection permit so you can go ahead and let them evaluate and approve later. You will also likely need to apply for an electrical service change permit from Seattle City Light.
Since the 1993 Washington Housing Policy Act was introduced, cities and counties in Washington State have been encouraged to adopt ordinances that will encourage the development of ADUs in single-family property zones. Initiating this move, the Washington State Department of Community, Trade, and Economic Development (now known as the Department of Commerce) made model ordinance recommendations.
These have been adopted widely throughout the state, although some cities, including Seattle, are rethinking the standards to make them more accessible to homeowners. So, let’s compare permissions for the two options in Seattle.
ADUs in Seattle also require a construction addition or alteration permit and probably an electrical change or new service permit. So there’s not much difference, except that in 2019, the City introduced new legislation that removes some of the regulatory barriers, making it easier to create ADUs. Ultimately, it’s going to depend on your needs and the space you have to work with.
Do you just want to increase the living space in your home, or do you want to build a second unit where family members or other people can live? Do you want to be able to accommodate guests, or perhaps have a home office or studio where you can work or be creative?
There are subtle differences that might extend to long-term motivation. Even if you want your addition or ADU as a workspace, for example, if you design it as a future rental opportunity, this might be a powerful selling point if and when you decide to sell your home.
Whatever your motivation, unless budget isn’t an issue, you really should consider the value it will add to your property, for an additional immediate income and/or resale value.
An exercise you definitely need to do is to estimate your costs and then assess your ROI. Be sure to take everything into account, including utility additions and costs. It’s impossible to know whether an ADU or an addition will be more expensive without checking out the costs.
You will also need to assess whether additions and/or a new ADU will increase your property taxes. If you’re going to rent out the addition or ADU, there may be rental benefits. But be sure that renting out is a legal option. In many areas, it is, as long as the rental is long-term.
Then you will need to assess your ROI. Unfortunately, nothing is set in stone, and there will always be some risk involved.
I’ve given you some guidelines, but ultimately, you’re going to have to do some homework of your own.
For example, even though long-term rentals are a popular option for ADUs, a lot of cities and counties don’t allow short-term rentals. And it’s a bit more difficult renting out rooms or suites within family homes, even when they incorporate living spaces with separate cooking facilities.
There are also enormous variables in terms of what different states, counties, and cities allow in terms of additions and/or ADUs. What’s good in California might be impossible in Oregon.
At the end of the day, my gut feeling is that it’s generally easier to build an ADU rather than an addition. It also tends to cost less, especially when you build the ADU adjacent to your home or convert a garage, attic, or another potentially liveable space.
Please do some of your own research based on the ideas I have given you here. And be sure to get advice from a local professional before you go ahead with either option.