Affordability and inventory continue to be major challenges for new home builders. Accessory dwelling units (ADUs) could be a way to increase housing inventory and provide builders with additional revenue streams. Let’s look at the evolution of ADUs and why, if you choose to build them, a builder’s warranty from 2-10 Home Buyers Warranty (2-10) is crucial.
A Brief Explanation of Accessory Dwelling Units
ADUs are essentially small living spaces that exist on the same plot of land as a detached single-family home. They generally include a kitchen, a bathroom, a separate entrance from the main dwelling, and at least one bedroom.
Sometimes referred to as “granny flats,” ADUs can exist inside the house itself, as an attachment to an existing house, or as a standalone dwelling on the same plot of land as an existing single-family house.
People who live in ADUs could be family members or unrelated tenants.
The Changing ADU Landscape
According to AARP, ADUs were common across post-WWII America. As time passed, ADUs began to fall out of favor, especially at city and county levels.
However, local legal landscapes related to ADUs have begun to change. Localities have started to relax resistance to ADUs, showing that they could be making a comeback in popularity.
Why ADUs Are Making a Comeback
There are two major reasons:
- Housing affordability is still a challenge, and ADUs could help this problem.
- Multigenerational housing is increasing in popularity.
On affordability, ADUs could help. It’s no secret that affordability is a constant challenge, especially for first-time home buyers. The ability for an existing homeowner to build an ADU and rent it out for additional income may help people who need a dwelling but can’t afford a house or apartment.
On multigenerational housing, it’s little wonder why ADUs are sometimes called granny flats. These spaces could allow older people a place where they can live independently without having to commit a huge sum of money for their own house. They may also serve as a transitional dwelling for adult children who can’t quite afford their own place just yet.
You Build it, We'll back you up.
Learn why so many builders enroll their homes in the 2-10 New Home Warranty Program.
How Does an ADU Warranty Work?
According to Walt Keaveny, Senior Director of Insurance & Underwriting Operations and Principal Engineer at 2-10 Home Buyers Warranty (2-10), ADUs could be eligible for enrollment in the 2-10 New Home Warranty Program.
The statute of repose may vary by state, but just like with a warranty on a single-family home (for example), it’s the law that you warrant the work you do when building an ADU.
For more information, reach out to us at [email protected].
Let 2-10 Protect Your ADUs
ADUs could be a way for you to tackle affordability challenges and add value to the homes you build. If your state allows ADUs, let 2-10 help you.
