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Published Date 10/17/2023

Tiny House The latest amenity for homeowners is another, smaller home, (now known as ADUs — accessory dwelling units). Realtor.com’s Nicole Friedman, reporting on the explosive phenomenon for The Wall Street Journal, says these little cuties can be free-standing miniature homes as small as a studio apartment and tucked away in a backyard. They can reside above a garage or in a basement and extend to more than 2,000 square feet. “ADUs are growing in popularity as states encourage their construction through zoning changes and homeowners seek ways to lower their housing costs by renting out these units,” says Friedman. “The typical cost to construct one is around $100,000, according to building-permit data company Builty,” she says, which sounds like a deal in every man’s market when it comes to any kind of new housing, even in tiny form. “It’s gone from a small niche in the market to really a much more impactful part of new housing,” said Scott Wild, senior vice president of consulting at John Burns Research and Consulting. “Municipalities love it, existing homeowners love it, developers love it.” Even homebuilders have jumped into the game, offering ADUs as amenities. In Alpine Springs, a new-home community in Saratoga Springs, Utah, half of the 16 homes sold include an ADU in the basement at an added price of $35,000 to $70,000, said Chris Bley, chief investment officer at investment firm IHP Capital Partners. Friedman reports a Freddie Mac study in 2020 that identified 1.4 million single-family U.S. homes with ADUs, with the actual number no doubt being much higher by now. “ADUs are difficult to track on a national basis, in part because they can be described in a variety of ways, such as casita, backyard cottage or garage conversion,” says Friedman, who adds that some homeowners also build them without permits. It makes sense that the proliferation of ADUs comes as homeowners and renters around the U.S. grapple with housing shortages and high home prices...

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