I spoke with 10 people who built ADUs. They all have one thing in common.

Business Insider

4 days ago

Between scanning Zillow, reading housing studies, and even scrolling through social media, one thing is clear: buying a new home has never felt so out of reach, even for two working people with decent salaries.
For my job as a real estate reporter, I've interviewed 10 people who built accessory dwelling units, or ADUs. Many of them did so because moving to a new or bigger home wasn't an option for them or their loved ones, so they resorted to a workaround that, while not cheap, is less expensive than a typical house.
Todd Kuchta, an engineer from Northern California, spent $248,000 building one for his adult son who has special needs — a bargain given that typical homes in the area sell for over $1 million. Justin Mauldin, the CEO of an Austin-based PR agency, added a backyard office to free up space in the main house. The total price tag? $41,500, much less than upsizing to a new home in the Texas capital.
Sure, building an ADU is not an option for my husband and me just yet. But hearing how people have turned to them as an alternative to moving — as ways to house a relative and add square footage without a full-on renovation — is inspiring.
ADUs aren't just tiny homes, and their popularity is still rising
ADUs are small backyard homes that typically range from 150 to 1,200 square feet, depending on local regulations. The average cost to build one falls between $100,000 and $300,000, not including permitting fees. Some states, including California, Colorado, New York, and Vermont, offer grants to help homeowners offset these costs.
Sheri Koones, an author and expert on ADUs and home construction, told me that the nation's severe shortage of homes for sale is driving ADU popularity.
"It is a particularly difficult market for young people and baby boomers trying to find housing," Koones said. "Multigenerational housing situations are becoming more common. Parents will have adult children live in the ADU on their property, and when the 'children' have their own children, they swap housing with each other."
A 2024 study from the Federal Reserve Bank of San Francisco estimates that there are now at least 1.6 million ADUs in the US. The Fed indicates that the number of single-family homes with an ADU is nearly one-third the number of owner-occupied condos nationwide. Of all states, California has the most, with at least 201,000, followed by Washington, with over 77,800.
California resident Selma Hepp, chief economist at Cotality, formerly known as CoreLogic, and an ADU owner herself, told me that as long as soaring home prices and mortgage rates keep housing affordability at an all-time low, ADUs will continue gaining traction.
"When you look at the markets that are least affordable, in the future, you may see people thinking of alternative ways to maximize their land use," Hepp said. "Potentially down the road, you'll see them in more areas."
ADUs are a solution for homeowners wanting more space
Last fall, I spoke with Kuchta, 58, about building an ADU in his backyard for his son, Jacob.
Jacob, who is in his mid-20s, wanted more independence and a place of his own. But because he has autism, he still relies on his parents for help with daily tasks like cleaning, taking medication, and preparing meals.
With his monthly medical support costs exceeding $9,000, buying a larger home or moving to an assisted living facility was out of the question.
I completely understand why. The Kuchtas live in Napa County — one of the most expensive real estate markets in the country. The region is dotted with multimillion-dollar estates and wineries. As of February, the median home sale price was $1.1 million, according to Redfin.
Rather than purchasing a new property, the Kuchtas are making the most of what they already have. To build a 480-square-foot tiny home on their 6,000-square-foot lot, they took out a second mortgage on their home, valued at over $800,000. That gave them $160,000 to work with. They also received a $63,000 forgivable loan from Napa County's Affordable ADU program.
Jacob's new place — a one-bedroom unit with a full bathroom and kitchen — cost $248,000 to build. It's a fraction of what the Kuchtas would have paid for a larger, separate home.
"That's the reality of the housing market in California," Jacob's dad told me. "Buying a new house is very expensive unless you got into it before prices skyrocketed. If we sold our home and moved, we would also face increased property taxes, from around $3,000 a year to as much as $12,000 a year."
Why move when you can build?
As someone who doesn't own a home and is still paying off student loans, building an ADU feels just as out of reach as buying a new house.
But for homeowners with built-up equity, it can make a lot of sense. I can see how, for them, the cost of an ADU can feel like a bargain compared to purchasing another, probably more expensive property that might also come with higher insurance premiums and property taxes.
For Mauldin, who built a nearly 200-square-foot ADU in his Austin backyard for $41,500, it probably felt like a steal.
The married father of two wanted a dedicated home office, but his 1,200-square-foot main house didn't have enough room. He told me that moving to a larger home in the city, where the median sale price was $512,500 as of February, was also well beyond his budget.
"Of course, we'd love a bigger home, but with prices still unaffordable, it's tough," Mauldin said. "When we bought our home, our interest rate was locked at 2.5% — rates now are much higher. Most homes in desirable areas are in the $1.5 million range, and with the high property taxes here, it's just not realistic."
Mauldin told me the ADU has been a "game changer."
"The office has certainly made living in our house much more comfortable," he said. " For now, we're happy with our place, and maybe we'll add a bathroom one day."
When I hear stories like the Mauldins', I'm reminded that even if I can't afford the home of my dreams today or tomorrow, I can still shape one in its image.
ADUs are as much about comfort as they are about affordability
My conversations have given me a lot of insight into the financial reasons homeowners don't want to move. They've also revealed that, for many, the decision is just as emotional as it is practical.
If I had lived in a neighborhood for decades, I don't think moving would be easy. I've rented in my apartment building for more than three years now, and I dread the day I'll have to say goodbye.
It's a feeling that Christine Wilder-Abrams, a 72-year-old woman from Oakland, California, wanted to avoid at all costs. Although she found it difficult to climb the stairs of her two-story house, she wasn't ready to give up the home or neighborhood she'd lived in for nearly 35 years.
Instead, she built a 560-square-foot accessible ADU in her backyard for $350,000, and her 34-year-old daughter and young granddaughter moved into her 2,000-square-foot main home.
Koones told me that this type of ADU, also known as a granny pod or granny flat, has become a popular solution for older people wanting to age in place.
"Years ago, a lot of older people just moved into senior facilities, but people are living longer," she said. "An ADU gives them an opportunity to live close to their children, help with childcare, meals, and be close by."
The ADU has been a win-win situation for both Wilder-Abrams and her daughter.
She didn't have to buy a new house in the city, where the median sale price was $749,000 as of February, and now has support as she ages. Her daughter, a single mom, also has an extra pair of hands to help raise her child.
"I get to live close to my daughter and granddaughter," she said. "It's nice that I'm here for them."
Wilder-Abrams makes me think of my parents and in-laws.