What We're Seeing
To combat the nation’s housing shortage, states are turning to zoning regulations to increase the minimum density of residential areas. Also known as granny flats or mother-in-law suites, Accessory Dwelling Units (ADUs) are separate dwellings paired with a single-family home. Primarily targeted toward single-family homeowners, this policy can act as a positive tool in the toolbox to increase the supply of quality, affordable housing options for renters while simultaneously alleviating the burden felt by multifamily housing providers to keep up with the demand for housing.
The National Apartment Association (NAA) is currently tracking 12 bills across 8 states addressing ADUs, all of which were introduced in 2024. As of last year, at least 8 states have adopted policies preempting local bans against constructing ADUs. Similar legislation has been proposed this year in Arizona, Colorado, Massachusetts, Minnesota and New Hampshire. Key examples include:
- Vermont: Vermont’s proposal focuses on permitting by exempting the construction or improvement of an ADU from a municipal land use permit requirement. Additionally, the policy exempts the conversion of a commercial building into no more than 29 dwellings from requiring a permit amendment.
- South Carolina: South Carolina’s proposal would provide for a property tax exemption if the homeowner rents to an individual earning up to 80 percent of the county’s area median income and maintains the ADU as affordable housing for a minimum of ten years.
- California: The six bills currently considered by California address further implementation measures including a tax exemption for new ADUs, a directive to revise housing element plans for increased density, two bills permitting local agencies to adopt ordinances pertaining to streamlining inspections for residential use and a proposal aimed to expand ADU development on lots with existing or proposed multifamily dwellings.
Why Does This Matter?
Increasing the supply of housing is a key provision in reducing the strain of housing affordability, and a barrier to increasing the number of available housing rests in the areas zoned for multifamily development. Easing zoning restrictions on ADUs can serve as a powerful vehicle for encouraging new housing production.
Historically, neighborhoods and cities have objected to the introduction of ADUs and have thus written their prohibition into the zoning code. Reconsidering these zoning restrictions and allowing for ADUs, cities can offer households of all income levels with quality housing.
California saw the number of ADU-specific building permits increase 15,334% between 2016 and 2022 following legislation to streamline the permitting process. This effort has been a critical step toward increasing housing supply, as in 2023, one in three housing permits issued in Los Angeles was for an ADU. This is why the National Apartment Association (NAA) is a strong supporter of zoning reforms to increase housing supply across the country. NAA continues to monitor state and local trends of national significance and work with our affiliate partners to support their advocacy efforts with state governments and city and county councils.
For more information about ADU laws, please contact Ben Harrold, Manager of Public Policy.