Accessory Dwelling Units (Tiny Homes)

A few years ago, the City of Austin approved a city wide change to allow accessory dwelling units on all SF-3 zoned lots as small as 5,750 square feet in every neighborhood in Austin. Most homes in the Austin area fit this description. The City’s objective was to improve the housing crisis by allowing people to create smaller, more affordable housing. portland-ADU-1

Accessory Dwelling Units (ADUs) a/k/a Secondary Dwelling Units (SDUs) are commonly referred to as garage apartments, granny flats, or tiny homes. They tend to stand beside or behind the primary residence, and are independently fully habitable. By law, they are usually no larger than 1,100 square feet and are at least 10 feet from the main house. They can be used as a guesthouse or rented out (see limitations below).

ADUs come with fewer requirements for building permits, than a traditional construction and can be beneficial for homeowners and investors to maximize their investments. Homeowners can earn extra income through the secondary property, and investors can purchase a single property and then later split it up and sell it as two separate units, for much more money. Many ADUs are created from detached garages which increases the value of the overall lot considerably. Keep in mind though that between permitting, plans, and construction, even a modest ADU will cost close to six figures. However, there are specific types of construction and rehab loans for these types of projects. It’s also sometimes possible to place a pre-manufactured structure on the existing lot and connect utilities. This will depend on the subdivision rules and any other deed restrictions in the area. Make sure to factor everything in before making the decision to add an ADU.

At the November 2015 meeting, the City of Austin Council approved the following changes to the ADU regulations:

  • Reduce minimum lot size for ADUs on SF-3 zoned lots to 5,750 square feet.
  • Set the maximum size of an ADU to 1,100 square feet or 0.15 Floor-Area ratio, whichever is smaller
  • Reduce building separation to 10 feet (front to back and side to side).
  • Eliminate requirement that an entry be more than 10 feet from a property line.
  • Remove driveway requirement
  • Provide one parking space for the ADU in addition to main structure parking.
  • Eliminate parking requirement for ADUs within 1/4 mile of an activity corridor that is served by public transit
  • Limit use as short-term rental to a maximum of 30 days per year for ADUs constructed after October 1, 2015.
  • Prohibit use as a Type 2 short term rental (owner not living on site)

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