When it comes to home improvement projects that involve making major changes to your home, accessory dwelling units (ADUs) and home additions are among the most common. However, while many people will use ADUs and home additions interchangeably, they are actually two different types of home improvement projects that accomplish different goals. Understanding the difference between an ADU and a home addition is the first step in understanding which will better achieve your goals.
Our team at Lamont Bros. Design & Construction specializes in customized home improvement solutions. We’ve constructed custom home additions and ADUs for homeowners across the Portland metro area. Having seen firsthand how the demands and outcomes for these two types of projects differ, we recognize the importance of helping homeowners understand these differences so they can make informed decisions to improve their homes.
The goal of this article is to help you recognize the difference between a home addition and an ADU. After you’re done reading, you’ll have a better understanding of what issues both of these different projects are meant to solve. With that information, you can more easily identify which of the two is better suited to fulfill the goals you have for your home. The specific topics we’ll discuss below include:
- What is an ADU and What are its Pros and Cons?
- What is a Home Addition and What are its Pros and Cons?
- How to Decide if You Need an ADU or an Addition
What is an ADU? Purpose, Pros, and Cons
An Accessory Dwelling Unit (ADU) is a secondary housing unit on a single-family residential lot. The primary purpose of an ADU is to provide a separate living space independent from the primary dwelling.
Common characteristics of an ADU include:
Smaller than the main house: Most local zoning laws limit the size of an ADU. Some provide a specific square footage cap, typically between 1,000-2,000 square feet. Others limit the ADU’s square footage as a percentage of the primary dwelling.
Fully functional living space with all necessary amenities: ADUs must include their own kitchen, bathroom, and living area separate from the main home.
Can be either detached from or attached to the main home: Although often built as secondary structures apart from the main home, an ADU can be part of the main structure, as well. ADUs attached to the side of a home are common, as well as basement or attic ADUs.
Separate utility connection and meters: Legally, one of the defining characteristics of an ADU is that it has separate meters for water and electrical consumption. This allows the residents of the ADU to be billed separately from the residents of the primary dwelling.
Pros of ADUs
Construction of an ADU on your property can have several advantages, including:
Potential for Rental Income
One of the most appealing aspects of building an ADU is the opportunity to generate additional revenue. By renting out the ADU, homeowners can create a steady stream of passive income. This can be particularly beneficial in urban areas with high rental demand. The extra income can help offset the costs of building and maintaining the unit, making it a financially viable investment.
Flexibility for Family Use
ADUs also offer a flexible solution for accommodating family members. Whether you need a space for aging parents to live independently but close by, a private suite for adult children who are not yet ready to move out, or a comfortable guest house for visitors, an ADU can meet these needs. This flexibility can improve family dynamics by providing privacy while maintaining proximity.
Good for Urban Infill & Affordable Housing
ADUs are an excellent way to promote urban infill and contribute to affordable housing solutions. They utilize existing land efficiently, helping to address housing shortages in densely populated areas without the need for new land development. By increasing the housing supply, ADUs can help stabilize housing prices and provide more affordable options for renters.
Increased Property Value
Adding an ADU to your property can significantly increase its market value. Prospective buyers often see the potential for rental income or the flexibility of additional living space as a major asset. This can make your property more attractive and competitive in the real estate market.
Cons of ADUs
An ADU also comes with its own set of challenges. Here are some of the most common:
Zoning and Permit Challenges
Building an ADU can be complicated by zoning laws and permit requirements. Many municipalities have strict regulations regarding the size, location, and usage of ADUs. Homeowners may need to navigate a complex approval process, which can be time-consuming and costly. We have seen the cost of permitting alone for some ADUs in the Portland area run over $30,000.
Impact on Yard Space
One of the trade-offs of building a detached ADU is the reduction of available outdoor space. Depending on the size and placement of the structure, it can significantly impact your yard or garden area. This might be a concern for homeowners who value outdoor space for recreation, gardening, or other activities.
Potential Neighborhood Restrictions
Some neighborhoods have covenant restrictions or homeowner association (HOA) rules that limit the construction of ADUs. These restrictions can get in the way of your ability to add an ADU to your property. It’s important to review any neighborhood agreements or HOA bylaws before planning an ADU project to ensure compliance and avoid potential conflicts.
What is a Home Addition? Purpose, Pros, and Cons
A home addition involves expanding the existing structure of your house to create more living space. Unlike an ADU, a home addition is integrated into the main home, maintaining a single living environment rather than creating a separate dwelling.
Common characteristics of a home addition include:
Expansion of existing space: Home additions are typically extensions of the existing structure, such as adding new rooms or expanding current ones.
Variety of types and purposes: Additions can include single-room expansions, multi-room extensions, kitchens, bathrooms, or any other type of space you might want in your home.
Can expand out, up, or down: An addition can go on the side of the home, on top of the home as a new second story, or even under the home as a basement addition. More complex addition configurations tend to be more expensive.
Seamless integration with the existing home: The goal of a home addition is to blend the new space with the current structure, maintaining the design aesthetic and functional continuity of the original home while adding to and enhancing the living space.
Pros of Home Additions
When looking to expand the living space in your current home, an addition has several benefits. Here are some of the most commonly sought-after:
Customization to Meet Specific Needs
Home additions offer the flexibility to expand your home while tailoring the new space to your exact requirements. Whether you need an extra bedroom for a growing family, a larger kitchen for cooking and entertaining, or a dedicated home office, an addition can be designed to meet your specific needs and preferences. This level of customization ensures that the new space integrates seamlessly with your lifestyle.
Enhanced Home Value
Adding more square footage to your home typically increases its market value. The added value of an addition is most directly impacted by the total square footage added, but may also be influenced by the features and finishes included. This increased value can provide a good return on investment when it comes time to sell your home.
Preservation of Yard Space
Unlike ADUs, which often occupy additional yard space, home additions can be designed to make efficient use of the existing footprint of your home. Vertical additions, such as adding a second story or basement, can preserve your outdoor areas while still providing the additional living space you need.
No Need to Move
With many homeowners today holding historically low interest rates, the thought of moving can be scary. For those who outgrow their home and need to upsize, building an addition rather than moving can save them the trouble of having to move and give up their rate.
Cons of Home Additions
Like any home improvement project, additions also come with a few drawbacks. Here are a few of them:
Higher Construction Costs
One of the major drawbacks of home additions is the high cost of construction. Due to the extensive work involved in integrating the new space with the existing structure, including foundation work, roofing, and possibly electrical and plumbing extensions, the expenses can add up quickly. This is especially true for complex expansion projects such as second-story or basement additions. While ADUs can also be expensive, detached ADUs don’t involve the same complexity or engineering required for attaching an addition to a home.
Disruption to Daily Life
The process of constructing a home addition can significantly disrupt the daily life of those living in the home. With workers on-site, noise, dust, and restricted access to parts of the home, living conditions can be challenging during the construction period. This can be particularly stressful for families with young children or pets, requiring careful planning and possibly temporary relocation of some household activities.
Permit and Zoning Requirements
Like ADUs, home additions require permits and must comply with local zoning laws. This process can be complex and time-consuming, involving multiple inspections and approvals. Homeowners need to ensure that their contractor’s plans meet all regulatory requirements to avoid delays and additional costs.
How to Decide if You Need an ADU or an Addition
Although they have their differences, there is some overlap between an ADU and an addition. In fact, we’ve seen some projects that qualify as both an ADU and an addition.
However, choosing between one or the other can be challenging, but by carefully considering your needs, available space, and budget, you can make a more informed decision. Here’s a more detailed guide to help you decide:
You Should Build an ADU If…
You Want a Rental Unit on the Property:
If generating additional income is a priority, building an ADU can be an excellent investment. By renting out the ADU as a long or short-term rental unit, you can create a steady stream of passive income. Done right, the income generated by an ADU can completely offset construction costs and provide long-term value to the property. This is particularly beneficial in areas with high rental demand.
You Need a Place for an Aging Parent to Live Independently:
ADUs are ideal for multi-generational living. If you have an aging parent who needs to live close by but still values their independence, an ADU provides a separate, self-contained living space. This setup allows family members to be nearby for support while maintaining privacy and autonomy.
You Have Sufficient Lot Space and Budget:
If you have ample yard space and the financial resources to invest in a major purchase, an ADU can be a worthwhile project. Carefully consider how much impact a detached ADU might have on your yard space, as well as the cost of such a project.
You Should Build an Addition If…
You Need More Space for a Growing Family:
If your family is expanding and you need more living space, a home addition is a logical choice. Adding extra bedrooms and bathrooms, or expanding common areas like the kitchen or living room can make your home more comfortable and functional for everyone.
Your Home Needs a Specific Type of Space It Does Not Yet Have
Home additions can be designed to significantly improve the functionality of your living space. Whether you’re looking to create a larger kitchen, add a family room, or build a dedicated home office, an addition allows you to tailor the space to your specific needs, enhancing your daily living experience.
You Want to Improve the Value of Your Home
Adding square footage to your home generally increases its market value. Prospective buyers often look for homes with more space and modern amenities. A well-planned addition with the right features and appliances can make your property more attractive and competitive in the real estate market, providing a good return on investment when you decide to sell. Keep in mind that the longer you hold onto a home after adding on to it, the more equity value it will gain.
Ready to Learn More About Home Additions?
After reading this article, do you have a better understanding of the difference between an ADU and a home addition? Remember, ADUs offer flexibility and potential rental income, while home additions provide customized space expansion.
While it’s important to identify the best home improvement solutions for your needs, it’s equally important to find a contractor who can execute your vision the way you need. That’s why we’ve created our free 3-Step Guide to Choosing a Contractor. Download it for free to learn from remodeling professionals how you can find and hire the best contractor for your next project.
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