Smart Growth / Smart Energy Toolkit Modules - Accessory Dwelling Units (ADU)

Learn about the Smart Growth/Smart Energy Accessory Dwelling Units (ADU) module.


An ADU is a self-contained apartment in an owner occupied single-family home/ lot that is either attached to the principal dwelling or in a separate structure on the same property.

The Problem

The census shows that the average number of people per household has decreased significantly over the last 30 years (from 3.1 in 1970 to 2.6 in 2002). Yet, new homes continue to be built, suggesting that there is increased capacity in the existing housing stock. This has occurred while the value of homes and the resulting tax burden continues to rise. Homeowners are often forced to sell a house that is too big for their needs, especially for fixed income residents. This issue further aggravates the already existing scarcity of affordable housing options, and the land consumption and new infrastructure required for a standard single family subdivision are significant. ADU's can provide owners the additional income necessary to maintain a home when the structure becomes more than they need or can afford.

A household may wish to provide a new self-contained unit within their property to receive additional income, provide social and personal support to a family member, or obtain greater security. However, this practice is often unlawful because of basic zoning restrictions on the allowed number of units per lot.

New, young workers in a community may decide that home ownership is a longer-term goal, and a smaller rental apartment is more appropriate now. When apartments become harder to find in a community, these workers may have to live outside of the community and away from their families.

ADU's can allow homeowners to provide separate units that fit in the neighborhoods and to increase options and affordability for both homeowner and renter or family member, and not affect the quality and physical character of the neighborhood.

Introduction to Accessory Dwelling Units

Accessory units (also known as accessory apartments, guest apartments, in-law apartments, family apartments or secondary units) provide supplementary housing that can be integrated into existing single family neighborhoods to provide a typically lower priced housing alternative with little or no negative impact on the character of the neighborhood. Because the units are usually small, they are more affordable than full-size rentals.

There are three types of accessory units:

1) Interior - using an interior part of a dwelling;

2) Interior with modifications where the outside of the dwelling is modified to accommodate a separate unit (this could include a unit over the garage if the garage is attached)

3) Detached - a structure on a residential lot that is separate from the main dwelling, yet by definition still "accessory" and so smaller than the main unit (this would include a unit over the garage if the garage is detached).

Examples of detached ADU's
The common features of all accessory units are that they are self-contained  and subordinate to the existing dwelling. The approach used by most municipalities for accessory units is a zoning bylaw that permits the additional, but accessory unit, allowing certain improvements to be made to the existing dwelling. Restrictions that may be considered include whether the dwelling existed as of a certain date, the maximum allowed building and site modifications, the options for choosing inhabitants, whether the owner must occupy the main unit, and minimum lot sizes. However, the greater the number of restrictions, the fewer options there are available to homeowners and the lower the number homes capable of adding units.

Characteristics that Support Accessory Dwelling Units

It is easier to create accessory units when the following conditions are present:

  • Available housing stock. Homes built with large amounts of floor space allow accessory units to be included with a proper amount of living space. Smaller homes with sufficient lot area may also be acceptable when additional construction is permitted.
  • Preservation goals. Preservation of the older housing stock could be more strongly encouraged with an opportunity to create rental unit income.
  • Aging demographics. As families become smaller, the larger home (3, 4, or more bedrooms) is less likely to be fully occupied. Retirement may also put strains on home finances as choices are made based on fixed incomes.
  • Entry-level job growth. Job growth, especially in entry-level positions, combined with a lack of local apartments means more commuters on the road. Accessory apartments can provide low-cost rentals for newly formed households who help fill those jobs and support the local economy.
  • Supportive neighborhoods. Neighborhoods that accept small changes to maintain their stability are most likely to be supportive when their residents request accessory units for family or economic reasons.
  • Supportive local public policies. Local policies for housing and neighborhoods can accept a certain level of changes to existing homes that will not substantially change the fabric of the community or the livability of the neighborhoods.


Accessory apartments help to increase a town's supply of affordable housing and enhance the social stability and mix of neighborhoods with little or no negative impact on the physical character of the neighborhood. They effectively improve the affordability of housing for both homeowners and renters at all stages in their lives.

Accessory Units also help to maximize use of existing public infrastructure and services and reduce the pressure on open space and farmlands from sprawling development.

The practice of allowing accessory units helps communities achieve several sustainable development principles:

  • Expand Housing Opportunities: An accessory unit program helps promote rehabilitation of housing and increases the supply of rental housing for a wider range of physical abilities, stages in life and income levels.
  • Concentrate Development and Mix Uses: An accessory unit program helps promote more compact forms of development thus conserving land. Accessory units promote use of existing infrastructure, rehabilitation of existing housing and can also assist in the preservation of historic buildings. Accessory units also help to preserve the existing physical character of neighborhoods and enable residents to stay in their community throughout all stages of their lives.
  • Use Natural Resources Wisely: Accessory units help to concentrate development and thus use land, energy, water and materials more efficiently. Accessory apartments ease development pressure on farmland and open space, improve drainage with a smaller footprint, and increase energy efficiency with a more compact living space.
Typical lot layout for detached ADU's
Typical lot layout for detached ADU's

Financial Considerations

Accessory units provide benefits to:

  • Municipalities,
    • Municipalities gain additional tax revenue from accessory apartments as a result of improvements to the existing housing stock that increases the "full and fair cash value" of the properties
    • The financial impact on municipalities is also tempered by the fact that accessory units provide a housing option that enhances the moderately priced housing stock without requiring local funding.
  • Local employers
    • Local businesses benefit from accessory apartments as they provide moderately priced accommodation for employees within the community.
  • Homeowners
  • Families
  • Elderly citizens
  • Renters

Maintaining or increasing the number of people per household unit as well as number of households per lot in existing residential areas reduces the costs for municipalities to extend utilities and services, and preserves land. 

Accessory apartments also provide affordable housing for:

  • public sector employees
  • social service professionals
  • service sector workers such as day care instructors, teachers, nurses, home health care aides and security guards; seniors; and young families.

Increasing the number of more affordable units can also help to attract new businesses to the community.

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