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Business Insider
2 days ago
- Business
- Business Insider
I spoke with 10 people who built ADUs. They all have one thing in common.
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.
Business Insider
2 days ago
- Business
- Business Insider
I spoke with 10 people who built ADUs. They all have one thing in common.
I've interviewed 10 people who have built an accessory dwelling unit, or ADU, on their property. Many can't move for various reasons; ADUs are a way to add more space without physically relocating. ADUs are becoming a go-to for homeowners up against higher home prices, mortgage rates, and taxes. My husband and I are in our second year of marriage and are finally starting to think seriously about homeownership. 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. I'm still early in my homebuying journey, and like many others, I wonder about the basics: how much will the down payment be? How much will the home cost? Where will I live? But these conversations about ADUs have also raised new questions, like: will the home I buy one day have enough space for a granny pod in my backyard?
Yahoo
4 days ago
- Business
- Yahoo
Fed's Daly Says Policy in a ‘Good Place,' Can Be Patient
(Bloomberg) — Federal Reserve Bank of San Francisco President Mary Daly said monetary policy is in a 'good place' to continue to bring inflation down. NYC Congestion Toll Brings In $216 Million in First Four Months Now With Colorful Blocks, Tirana's Pyramid Represents a Changing Albania NY Wins Order Against US Funding Freeze in Congestion Fight The Economic Benefits of Paying Workers to Move NY Congestion Pricing Is Likely to Stay Until Year End During Court Case Daly said she doesn't necessarily expect inflation to reach the central bank's 2% goal this year, but she emphasized officials are making progress. She expects inflation will continue to decline over time as the labor market slows but remains solid. Fed policymakers have held interest rates steady so far this year. Officials have said a still-solid economy offers them room to wait for further clarity on a variety of government policy changes, notably tariffs, and their impact on the economy. 'The net net is businesses are still waiting to see, and as they wait to see, we wait to see, because we have policy in a good place for the economy we have,' Daly said in a moderated conversation in Oakland, California. 'We have plenty of opportunity then in time to make decisions as the economy evolves.' Daly said the labor market is in 'solid shape.' She noted it may take workers a little longer to find a job, but that is the balance needed to ensure a sustainable job market that is consistent with 2% inflation. Economists largely see President Donald Trump's widespread tariffs adding to inflation and weighing on economic growth. The administration's chaotic roll out of a range of levies has also made it challenging for businesses to make decisions on hiring and investment. Much remains uncertain. The US Court of International Trade introduced even more uncertainty with a ruling Wednesday that blocked sweeping parts of Trump's tariffs. The administration appealed, and on Thursday a federal appeals court temporarily paused that ruling while it weighs a longer lasting stay sought by the government. Political Pressure When asked about Trump's pressure on the Fed to lower interest rates, Daly said it's not the first time an administration has asked the US central bank to move in a way the president prefers. She said that's 'part of the job' and emphasized the Fed will do what's right to achieve its congressionally mandated goals of price stability and full employment. Earlier Thursday, Trump and Fed Chair Jerome Powell met in the White House for their first in-person meeting since the president's inauguration. The president told Powell that he believes the Fed chair is making a mistake by not lowering rates, White House Press Secretary Karoline Leavitt said. Powell told the president Fed officials will make decisions based solely on 'careful, objective, and non-political analysis,' the central bank said in a statement. —With assistance from María Paula Mijares Torres. YouTube Is Swallowing TV Whole, and It's Coming for the Sitcom Mark Zuckerberg Loves MAGA Now. Will MAGA Ever Love Him Back? Millions of Americans Are Obsessed With This Japanese Barbecue Sauce Inside the First Stargate AI Data Center How Coach Handbags Became a Gen Z Status Symbol ©2025 Bloomberg L.P.
Yahoo
27-04-2025
- Business
- Yahoo
College wasn't worth it for 51% of Gen Zers, study says
(NewsNation) — As the younger generation opts for less traditional jobs and more entrepreneurial side gigs in a digital age, the demand for a college degree has fallen. Indeed, a popular job site and hiring platform, conducted a survey of nearly 800 professionals in the United States with an associate's degree or higher and found that more than half view their diploma as a waste of money. They are skeptical about the return on investment, according to the study, revealing a generational divide. About 51% of Gen Z (born 1997-2012) consider their degrees a waste of money, compared to just 20% of Baby Boomers (born 1946-1964) and 41% of Millennials (born 1981-1996). The best cities for homebuyers and sellers: Report 'For decades, getting a degree meant substantially higher wages,' said Jocelyne Gafner in the study. 'From 1980 through about 2010, the gap between what college graduates earned and what those with only high school diplomas earned grew significantly. But recently, this advantage has hit a wall.' Researchers with the Federal Reserve Bank of San Francisco point to the 'race between education and technology' to explain the dynamic of wage gaps between those with college degrees and those without. Now, the wage gap has gotten smaller. Plenty of people are millionaires from internet and tech jobs that didn't require higher education, whereas plenty of people who attended college are still in debt. 'The combination of stagnating wage benefits, skyrocketing costs, degree saturation and debt may explain why younger generations increasingly question whether college is worth it,' Gafner said. 'The traditional promise of higher education simply doesn't align with the reality many younger professionals experience. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Axios
25-04-2025
- Business
- Axios
Economic outlook deteriorates in Mountain West amid trade war
Overall sentiment about economic outlook in the Mountain West worsened in February and March as President Trump launched the nation into a trade war, according to the Federal Reserve's latest Beige Book report. Why it matters: It's not likely to change anytime soon and could spell long-term woes for a region struggling with severe housing and affordability crises. Context: The Fed publishes the Beige Book eight times a year to give a snapshot of current economic conditions across its 12 districts, providing indicators for what to expect in coming months. The report is compiled by gathering information from businesses, community organizations and other sources across each district. State of play: The Federal Reserve Bank of San Francisco oversees nine western states and three U.S. territories, including California. Economic activity in the area slowed slightly during the mid-February through March reporting period, the Beige Book found. Employment fell somewhat as businesses across multiple industries, including Big Tech, reported recent and planned layoffs. All the while, wages ticked up. Prices overall "rose modestly" at a slightly faster pace than in the previous report. The region also saw higher price pressure for imported goods and raw materials, including aluminum, steel, electrical components and apparel. Between the lines: Demand for retail and other consumer services weakened, with households and firms more cautious with spending amid anticipated downturn in labor market conditions. The cost of services like insurance, health care and utilities stayed elevated even as some leisure and hospitality businesses lowered their prices to attract customers amid softening demand. Many businesses also reported price increase notices from suppliers due to recently implemented and anticipated increases in tariff rates. What they're saying:"Contacts generally expected inflationary pressures to intensify over the coming months," the Beige Book states. "Most contacts reported that they plan to pass increased input costs on to customers, but some expected to absorb cost increases to preserve market share." Threat level: Despite continued demand, activity in real estate remained slow. Plans for construction of new commercial and residential properties were at times held back as developers faced higher costs for construction materials and elevated financing costs. "Some landlords reported an increase in rent payment issues as tenants struggled with rising costs," the report notes. That will likely pose a challenge to San Francisco as it looks to boost its housing production and office building use. What to watch: Demand for community support services like housing and food assistance remained high even as service providers struggled with "deteriorating conditions." Funding from public and private sector sources dropped due to federal policy changes and companies' reduction in discretionary and philanthropic spending. Some nonprofits had to cut programs and lay off workers as a result. That means local governments might have to shoulder a larger financial burden — something San Francisco will struggle with as it faces its massive budget deficit.
