TRENDING: BACKYARD BUNGALOWS

TRENDING: BACKYARD BUNGALOWS

They’re not just granny pods or tiny homes. The latest housing trend in the backyard is now front and center for a new breed of homebuilder and landlord.
Second homes, formally called accessory dwelling units (ADUs), are cropping up in back and side yards across America, acting as either rental units or additional space for aging parents and still-nested adult children.

Growth in the sector has been fueled by changes to local and state zoning rules. Some municipalities are struggling with a lack of affordable housing and see these additional units as one remedy.

In 2010 Portland, Oregon, waived impact fees for ADUs, making them significantly less expensive. As a result, the number of ADU permits jumped from 86 in 2010 to 660 in 2018, according to a count by accessorydwellings.org.

In California, when a 2017 state law forced cities to relax ADU regulations, permits jumped even more dramatically.

And that all translates into big growth for ADU builders, like Prefab ADU, based in the California Bay Area. It built and installed about 100 ADUs this year but expects to expand that to at least 1,500 next year.

They say their focus is to expand the market and really drive the number of ADU installations across the Bay Area and California up dramatically, who admits that the market is really just starting to find its way, especially when it comes to financing, according to Steve Vallejos, CEO of Prefab ADU, as reported by NBC News.
Financing is a concern for the larger homeowner universe and ADU is still really for the most part an affluent homeowner product, meaning you have to have cash on hand to take this on.

Vallejos said inquiries from potential clients are evenly split between those looking to address housing for family members and those seeking rental income. Pricing at Prefab depends on the size of the unit, of course, but the most popular model, a 288-square-foot home, will run about $105,000 installed.
These second homes, formally called accessory dwelling units (ADUs), are cropping up in back and side yards across America, acting as either rental units or additional space for aging parents and still-nested adult children.

Growth in the sector has been fueled by changes to local and state zoning rules. Some municipalities are struggling with a lack of affordable housing and see these additional units as one remedy.

While it is definitely becoming easier to build ADUs in some local areas, there are still battles big and small, from zoning to neighborhood opposition. Some don’t want to see their neighborhoods crowded with renters, pushing density and services beyond capacity.

Do you think this is a potential money making business or even applicable in your area? Let us know what you think in the comment section below!

About the writer:
Shaura Cuyan writes about all the hottest Real Estate trends and predictions for Summit VA Solutions! She has previously written for a number of freelancing gigs and writes her own blog on lifestyle and current issues. She is a Graduate of Bachelor of Arts in Communication, taking up her Masters in Development Communication.

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