In an era where home prices continue to steadily rise, many folks are left wondering how they can afford a piece of the American dream.
Some have broached the idea of sharing, but co-ownership – even among family – is a little too cozy for most. The tenancy approach is probably the easiest.
Today, many buyers are looking for homes with the potential to add “accessory dwelling units,” or ADUs.
ADU residences can be build-ons, re-purposed space or a separate, free-standing unit. The main draw is practicality.
ADUs provide a sense of autonomy for the renter at a lower cost, and can provide the homeowners with help paying their mortgage. The majority (62 percent) of U.S. households are made up of one or two people, while most new and existing homes are designed to accommodate three or four. Legacy housing stock is simply more than many people need.
No one knows for sure, but some estimates put the number of informal and formal ADUs as high as 13 million nationwide.
But ADUs can run into problems with regulations limiting construction and parking, and many homeowners associations are sure to have opinions.
That being said, legislators in places such as Seattle, Portland, Ore. and Los Angeles are responding to local housing crunches in part by warming to the ADU concept, offering fee waivers and easing the permitting process.
Because ADU housing has a relatively small environmental and social footprint, this movement doesn’t receive much opposition from anti-development groups. ADUs can come into residential neighborhoods without dramatically changing a neighborhood’s character.
Moreover, ADU dwellers are considered more stable, and can provide the demographic and financial diversity a neighborhood needs, and some governments require.
Homeowners will want to consider the future impact of an ADU on future resale value. Some buyers shy away from “overbuilt” properties, and an ADU not built to code could be a huge problem.
Blog Source: Bay Equity Mortgage Newsletter