We've conducted an in-depth examination of successful Accessory Dwelling Unit (ADU) policies from across the country to better understand what drives the creation of these much-needed homes. Our research included a thorough review of academic and policy literature, detailed case studies of leading cities, and direct conversations with partners and advocates on the ground. This multi-faceted approach allowed us to identify which strategies consistently lead to meaningful ADU production, while also helping us understand the barriers that can limit their success.

From this work, we have identified three core strategies that are key to unlocking ADU construction: (1) remove red tape and unnecessary zoning barriers; (2) support homeowners with clear information, financial tools, and streamlined processes; (3) create incentives and subsidies to promote affordability. These strategies are being used in cities that have seen real, measurable increases in the number of homes being constructed. 

By aligning local policies with these proven strategies, communities can empower more residents to create new housing options in every neighborhood.

Strategy 1: Remove Red Tape and Zoning Barriers

To unlock the potential of ADUs, cities must remove red tape and eliminate unnecessary zoning barriers that delay or discourage construction. When homeowners can build without jumping through excessive hoops, more will be able to contribute to the incremental growth of their community. In turn, creating housing that blends into neighborhoods while meeting real community needs. All at virtually no cost to the city. 

Policy Goals to Achieve Strategy:

1. Allow detached ADUs in all residential zoning districts. 
2. Eliminate minimum lot size requirements.
3. Elimination of ADU size restrictions. 
4. Increase height restrictions to allow for more opportunities for property owners.
5. Reduce setback requirements so that more properties are eligible to build an ADU.
6. Allow for existing building conversions into ADUs. 
7. Clarify that an ADU shall not be penalized if there’s a zoning nonconformity elsewhere on the lot. 
8. Authorize ADUs on properties containing structures subject to historic preservation laws, as long as the ADU does not affect the facade as visible from the right-of-way.
9. Create flexibility for homeowners by eliminating or allowing exceptions to parking requirements if the property is in close proximity to active or public transportation. 
10. Eliminate or Add Exceptions to Owner Occupancy Requirements
    1. ADU is located on a duplex, multi-family, or non-residential use
    2. The owner has a bona fide, temporary absence of 3 years or less for activities such as military service, temporary job assignments, sabbaticals, or voluntary service (indefinite periods of absence from the dwelling shall not qualify for this exception); or
    3. The owner is placed in a hospital, nursing home, assisted living facility, or other similar facility that provides regular medical care, excluding retirement living facilities or communities.
    4. The owner has hired a property manager to adequately manage property

Strategy 2: Support Homeowners with Clear Information and Streamlined Processes

Many homeowners are interested in building an ADU but don’t know where to start. Cities can help by providing clear, easy-to-understand guidance and by streamlining the process from application to approval. Offering step-by-step instructions, online tools, and staff support reduces confusion and builds trust. When the path to building an ADU is accessible and predictable, more residents are empowered to add flexible, small-scale housing in their communities.

Policy Goals to Achieve Strategy:

1. Create or recognize a pre-approved design program.
2. Create a guide, handbook, and other resources that clearly explain the process for constructing an ADU.
3. Legalize unpermitted or nonconforming ADUs
4. Authorize ADUs to be sold separately.  
   

Strategy 3: Create Incentives and Subsidies to Promote Affordability

To ensure ADUs help meet local housing needs, cities should pair flexible rules with targeted incentives that promote affordability. Financial tools like permit fee waivers, low-interest loans, and bonus programs for affordable homes can reduce upfront costs for homeowners and create housing for all income levels. These programs can encourage or require ADUs to be rented at affordable rates or made available to specific populations, like seniors, low-income individuals or essential workers. These strategies help maximize the public benefit of ADUs while making them more financially feasible to build.

Policy Goals to Achieve Strategy:

1. Offer low-interest loans or grant funds for homeowners to build an ADU.
2. Provide incentive programs to achieve desired public benefits such as deed-restricted affordable homes, stable rents, or long-term rentership. 
3. Reduce impact fees for ADU construction.