The growing popularity of ADUs, or accessory dwelling units, is becoming increasingly evident in West-Coast housing markets. Increasing demand for more housing and affordability are driving their increased prevalence. In these areas, builder investments and, in some cases, state and local government incentives, are contributing significantly to ADU investment.

ADUs provide a valuable solution to the lack of housing supply in the West-Coast region by creating additional housing stock. ADUs are often described as backyard cottages and garage apartments and allow owners to expand the housing supply within existing communities. These properties are also beneficial to renters, who often find more affordable rents due to increased competition. Additionally, by creating more housing units, they can also reduce traffic pressures that often occur in densely populated areas.

In order to incentivize ADU investment on the West-Coast, many states and municipalities are offering zoning and tax discounts. California notably extended its existing state density bonus program to promote ADU construction, allowing for two ADUs on a single-family lot. Oregon and Washington have also implemented incentives, such as fast-track permitting, reduced fees and fee waivers.

ADUs are proving to be a positive solution for West-Coast housing stock. Not only do these properties increase the number of available homes for owners, renters and visitors, but also help create an affordable housing environment. In addition, state and municipal incentivization plans have proactively encouraged residents to invest in the concept. As the idea gains more traction in this region, it is likely that more areas will eventually adopt similar incentives.

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