Why Every City Should Consider ADUs

Pam Marron • February 14, 2023

Accessory Dwelling Units (ADUs) are small, separate living spaces that are built on the same property as a single-family home. They have gained popularity in recent years as a way to provide additional housing options in urban areas. In this article, we will examine how ADUs can benefit cities, including through increased revenues, multigenerational living, vacation and rental opportunities, and increased security.


ADUs Increase Revenues For Cities


One significant advantage of ADUs for cities is the potential for increased revenues. Because ADUs are separate living spaces, they can be rented out to generate additional income for the property owner. This can be especially appealing for homeowners who may be struggling to afford the mortgage on their primary residence. By allowing ADUs, cities can tap into this potential new source of income and potentially increase their own revenues through property and other taxes.


ADUs Encourage Multigenerational Living


ADUs can also provide a space for extended families to live together, encouraging multigenerational homes. This can be especially beneficial for families with aging parents or adult children who may not be able to afford a separate residence. By allowing ADUs, cities can support families in staying together and provide a more affordable housing option.




ADUs Add Vacation And Rental Units


In addition to providing additional living space for extended families, ADUs can also be used as vacation or rental units. This can be a great opportunity for homeowners to generate additional income by renting out their ADU to travelers. For cities, this can provide a new source of tourism revenue and can help to support local businesses.



Increased Security Of ADUs


Another potential benefit of ADUs is increased security. Because ADUs are often occupied by family or friends of the property owner, they can provide an additional layer of security for the neighborhood. This can be especially appealing for homeowners who are concerned about their safety or the safety of their property.



Common Misconceptions About ADUs


Despite the many potential benefits of ADUs, there are still some common misconceptions about them. Some people may believe that ADUs are inhabited by unwanted residents or run by slumlords, but this is not necessarily the case. In most instances, the owner of the property lives next to the ADU and takes care of its maintenance. Additionally, most ADUs are occupied by people who are known to the landlord.



How Fannie Mae And Freddie Mac Support ADU’s


Fannie Mae and Freddie Mac support ADU (Accessory Dwelling Unit) financing by offering unique mortgage products. Freddie Mac even offers their existing CHOICERenovation mortgage that allows an option to use a no cash-out refinance mortgage to pay off short term financing used to add on an ADU. This can help borrowers who are looking to refinance their cost of construction of an ADU paid upfront.



What City Planners And Developers Can Do To Learn More About ADUs


ADUs can provide many benefits to cities, including increased revenues, multigenerational living options, vacation and rental opportunities, and increased security. While there may be some misconceptions about ADUs, the reality is that they can be a valuable addition to communities and should be considered as a viable housing option.


If you are a city planner or developer interested in learning about unique financing for ADU’s that can benefit your city, contact Clients2Homeowners today.



Writer Pamela Marron is a licensed Loan Originator NMLS #246438 in Florida who works for Innovative Mortgage Services, NMLS #250769 in Lutz, Fl. Articles written are strictly her opinion and are published to help loan originators, real estate professionals and mortgage clients. This is not used to solicit for business.


Pam Marron | NMLS# 246438

Tara Jerse | NMLS# 2105127

Innovative Mortgage Services, Inc. | NMLS# 250769

Equal Housing Lender


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