Atlanta Accessory Dwelling Units: Backyard Homes
Atlanta accessory dwelling units (or ADUs) are surging in popularity—and if you imagine having an extra house right in your backyard, it’s easy to see why. Accessory dwelling units are self-contained living spaces that are either incorporated within a single-family home or located within the same property. Our state boasts such beautiful weather, it’s no wonder these backyard bungalows are suddenly all the rage.
ADUs offer Atlanta homeowners various possibilities and benefits. Atlantans can accommodate multigenerational living and potentially earn rental income with their accessory dwelling units. ADUs can also provide a dedicated area for remote work, or even serve as a personal retreat or home-based business location.
While cities like Portland, Austin, and Los Angeles have embraced ADUs with streamlined building processes, Atlanta is quickly catching up. Plus, we have our own unique characteristics that make us an ideal fit for these additional dwellings. Before starting construction, let's answer the most important questions about Atlanta accessory dwelling units.
What Is an Atlanta Accessory Dwelling Unit?
Atlanta accessory dwelling units can be classified as three different types. They can be newly-built structures separate from existing homes. Accessory dwelling units can describe a newly-added separate living space on an existing home. Another definition of an accessory dwelling unit is a previously existing space, like a garage or basement, converted into a separate dwelling.
ADUs are often known by different names like in-law apartments, granny flats, casitas, or backyard cottages. They were popular before World War II and are now considered a more affordable housing option. That’s because they don't require additional land—which makes up a huge chunk of housing costs.
Why Atlanta?
Atlanta features certain characteristics that make our city particularly suited for ADUs.
Good-Sized Lots
The many deep and narrow lots in Atlanta are highly suitable for accessory dwelling units. These lots provide ample space at the rear, allowing for the construction of an accessory unit while still preserving areas for a lawn, garden, or privacy fence between the primary and secondary homes. From a development perspective, ADUs offer the advantage of increasing housing supply without negatively impacting the overall scale of a neighborhood.
Thanks to the unique combination of narrow, deep lots and a dense tree canopy, most Atlanta accessory dwelling units remain completely hidden from street view. This distinguishing feature sets them apart, as no other form of urban infill can claim to have such a minimal impact on its surrounding environment.
There’s Plenty of Room
Despite the horrendous traffic conditions we experience in Atlanta, we are not overpopulated. Atlanta ranks 143rd in population density among US cities, which means there are actually fewer people per square mile compared to other major cities. Contrary to popular belief, Atlanta could benefit from an increase in population, as there is plenty of space to accommodate more residents.
“Free” Parking for Atlanta Accessory Dwelling Units
The city of Atlanta does not require homeowners to provide a parking space for an ADU. However, certain municipalities in Metro Atlanta require the inclusion of "paved off-street parking for one additional vehicle." This means that securing space for parking could be crucial in determining whether you can build your Atlanta accessory dwelling unit, taking into account factors like lot coverage and setbacks.
Diverse Community Landscape
Traditional rules for zoning single-family homes often limit the variety of housing options available in our neighborhoods. However, Atlanta accessory dwelling units play a crucial role in creating a more diverse community by offering additional housing choices. These units allow long-time residents to stay in their homes or transition to ADUs when property taxes and other expenses increase. Aging parents can find housing in the backyard, where they can receive the care they want and need. Young families can also have the opportunity to live in a neighborhood that might otherwise be too expensive. While no city is perfect, Atlanta stands out for its diverse community, initiatives for inclusive zoning, and the expansion of ADU legislation.
Can You Legally Have an ADU on Your Property?
Don’t go running to pick out tiles and fixtures for your Atlanta accessory dwelling unit before you consult with the Atlanta city planning department. This step ensures that you comply with regulations regarding what you can build, where you can build, and if you're legally allowed to build at all.
Rules for ADUs can vary significantly across the country, and even within cities in the same state. Here in Atlanta, for example, ADUs are limited to lots zoned R5, R, and R4A, with additional requirements for stormwater and sewer.
If your home falls under a Homeowners Association (HOA), it's equally important to review and follow their rules and regulations during the planning process.
Who Should Build Your Atlanta Accessory Dwelling Unit?
It can be tempting to turn your Atlanta accessory dwelling project into a do-it-yourself endeavor. However, it's important to be realistic about your expertise and the level of commitment required. Do you really want to be responsible for plumbing, electrical, and design engineering? Building a new structure involves various considerations that you may not anticipate. This includes obtaining construction permits, managing utility connections, and ensuring work progresses smoothly.
In most cases, it's practical and advisable to hire professionals for different aspects of the project, including but not limited to design, construction, and site work.
How Much Does an Atlanta Accessory Dwelling Unit Cost?
As usual, the boring answer is that the cost of constructing an ADU varies. The total price depends on factors like location and size. The long but not-so-boring answer is that Atlanta accessory dwelling units are generally not budget-friendly. Even excluding land costs, the expenses related to construction and available funding options have limitations.
A 1,000-square-foot Atlanta accessory dwelling unit will typically set you back between $80,000 and $120,000, depending on the finishes you choose. Here's an example breakdown for a rough estimate:
Survey, architect fees, permits (fixed): $5,000
Foundation and framing: $25,000
Mechanicals: $15,000
Insulation, drywall, trim, paint: $18,000
Roof, siding, windows, exterior trim: $15,000
Flooring, fixtures, cabinets, furnishings: $14,000
Please note that this example provides a general overview, and actual costs may vary based on specific choices and local factors.
In new construction, fixed costs like excavation and foundation-laying significantly contribute to the overall expense. Some homeowners choose to maximize the allowed size of their ADU to make the most of fixed costs. Check with your local building department about any potential "impact fees" imposed on larger ADUs.
Are There Financing Options?
Obtaining financing for your Atlanta accessory dwelling unit, while not unheard of, is a challenge. This is because traditional lenders typically don't offer loans for building ADUs. Those few lenders who do provide such loans usually limit them to work done by professional contractors—and these loans often come with higher interest rates and the requirement for mortgage insurance.
Many homeowners use a combination of strategies to pay for their build. This can include refinancing to access home equity, selling investments, borrowing from friends and family, and using credit cards to cover some costs.
You can also try the following:
Use existing savings.
Look into a 401K loan.
Consider a cash-out refinance.
Think about a second mortgage.
Explore a Home Equity Line of Credit (HELOC).
Apply for a construction loan.
Investigate a renovation loan.
Explore a reverse mortgage.
Consider a ground lease agreement.
Seek private financing.
Look into shared appreciation or shared equity agreements.
Investigate alternative funds available from local government or non-profit organizations.
Is an Atlanta Accessory Dwelling Unit a Solid Investment?
In Atlanta, where we are constantly dealing with expensive housing, the rental income from an ADU can help cover the costs of development quickly. This income also offers you as the homeowner the option to downsize without moving. Atlanta accessory dwelling units that are legally permitted can increase a property's overall value. While they won't guarantee instant wealth, ADUs can be a way to build wealth gradually.
It is ultimately up to you to decide if rental payments will cover expenses. But beware: in addition to financial considerations, being a landlord carries responsibilities and commitments that need to be considered.
How Much Value Could an Atlanta Accessory Dwelling Unit Add to Your Home?
This is another complicated question to answer due to the historical context of Atlanta accessory dwelling units. Although these units have been around for centuries, only in the last two decades (with their legalization in Atlanta in 2017) has data for appraisers and realtors started to catch up with the increasing demand. Homes with an ADU in Atlanta are priced 58% higher compared to those without one, which is higher than the national average of 35%.
Atlanta Accessory Dwelling Units Are Worth the Build
Atlanta accessory dwelling units aren’t just a trend or a passing fad. They’re a versatile and practical solution for our modern way of living. With so many benefits and possibilities, it's no wonder they’ve become increasingly popular in our state. As Atlantans, we have the opportunity to embrace this housing option and make the most out of our beautiful weather and spacious backyard areas.
Whether you’re considering ADUs for multigenerational living, rental income, remote work space, or simply as a personal retreat, it's important to do your research and be well-informed before embarking on such a project. And with Atlanta quickly catching up to other cities in terms of streamlined building processes, there’s never been a better time to consider adding an accessory dwelling unit to your property.