New ADU Law Opens Door For More Housing Production In Mass., But Some Say It Doesn't Go Far Enough

Accessory dwelling units may seem small, tucked in backyards or basements, but Massachusetts officials hope they can be a big part of the state’s solution to the housing shortage.

A new ADU policy went into effect last month — part of Gov. Maura Healey’s $5.1B Affordable Home Act passed last year— that allows units up to 900 SF by-right in every town and city except Boston. The state estimates this could spur between 8,000 to 10,000 new ADUs over the next five years.

While housing advocates applaud the policy as moving the state in the direction toward more housing density, some local officials and developers say it may not go far enough to spur a meaningful amount of ADU construction due to cost issues and size limitations.

"People are still kind of getting their heads around it,” said Citizens' Housing & Planning Association Director of Municipal Engagement Lily Linke, adding that she expected the process of getting ADUs built would be slow at the beginning.

“The interactions I'm having with municipalities are ... mostly a lot of questions, more questions than answers,” she said.

Accessory dwelling units, also known as granny flats or in-law suites, are additional units built typically on single-family lots as a way to provide more housing to either extended family or other residents. In recent years, ADUs have been a target for local officials as a way to discreetly add density and housing, especially in the suburbs.

Many municipalities have previously allowed ADU construction before the statewide policy was passed, but some haven’t seen a large number of the units constructed, in part because of size maximums and special permitting processes that were difficult for homeowners and developers to navigate.

Since Newton's ADU law went into place 40 years ago, only 121 units have been built.

The city allows ADUs of up to 1,000 SF, higher than the state’s new policy, but City Councilor Susan Albright says that limit has made it difficult for the financial math of adding new units to pencil. She is now pushing legislation to increase the city’s maximum ADU size to 1,200 SF.

"If we want to see success here, we should allow them to be bigger all over in all the cities and towns," Albright said.

"It's not cost effective to build a house — which is essentially what you're doing when you're building an external ADU — it's not cost effective to build a house that has a kitchen and bathrooms in it for only 900 SF. You need to have a larger property,” she added.

One developer who has specialized in ADU construction, Incremental Developers founder Derek Thomas, says these units are especially challenging from a cost perspective.

"The per-square-foot cost is astronomical," he said. "We're trying to jam all of these things into such a small space."

The company has built a number of ADUs over the last few years, but due to the increasingly difficult economics of these projects, Thomas said it has been shifting away from them and focusing on larger-scale projects.

He has seen an increase in interest in ADUs since the state law passed in the form of increased visits to the ADU page on his firm’s website, but he still doesn’t think it will be economical for his firm to pursue them. Thomas said the state is trying to do the right thing, but the square footage limits create an obstacle for building ADUs.

Diana Marsh, director of urban design and planning at Dream Collaborative, said the state’s 900 SF limit "seems prudent."

"Otherwise, there are risks of displacement and gentrification if a developer sees the potential to add a lot more square footage on a lot and buys up lower-priced homes on large lots," she said in emailed responses to Bisnow questions. "Depending on community context, something a lot larger than 900 SF might be more like a full extra unit or house, and one could argue that should be a different category: the idea for ADUs is that they are unobtrusive, fit into the existing fabric, and probably only house 1 or 2 people."

Massachusetts’ Secretary of the Executive Office of Housing and Livable Communities Ed Augustus said in a statement to Bisnow that the law will make it easier to build ADUs in many cities and towns across the state. 

"Previously, if a homeowner wanted to build an ADU for an aging parent, they would have had to apply for special permits and variances, which in many cases can be outright denied due to restrictive zoning bylaws," he said. "Now, ADUs are allowed by-right statewide, making it easier for residents to build in their own backyards or onto their existing homes."

While Boston is exempt from the state’s law, the city is separately looking to build more ADUs in some areas. The city announced a new program in November to support homeowners in building ADUs, and Mayor Michelle Wu has said it is a priority for her housing efforts. 

"I would like to see the city move faster," said Abundant Housing MA Executive Director Jesse Kanson-Benanav, noting that ADUs still aren’t allowable by-right across the city.

Massachusetts housing experts look to how other states have brought on production as a hopeful sign that things can ramp up in the future.

California passed its statewide ADU zoning decades ago and saw a recent explosion in interest to develop them, leading to more than 21,000 ADU permits being submitted in 2021, up from 7,000 in 2018, The Boston Globe reported. In Seattle, Washington, local officials loosened ADU laws, allowing for ADU construction to outpace single-family development at one point.

"It's still so new in [Massachusetts] that I don't think the economics of it has caught up, because bankers and on the financing side, they don't necessarily always understand what is an ADU," Thomas said.