This California man gave his neighbors a show when a crane hoisted an ADU over his house to be installed in his backyard. But could spectacles like this be a solution for the housing crisis?

A fast, affordable way to add an extra home

ADUs are simple, small housing units located behind or in the yard of pre-existing homes. They're usually 400 to 1,200 square feet. A pre-fabricated ADU can be a faster and more affordable solution than building a home onsite from scratch.

Owen paid $300,000 for his one-bedroom, one-bath unit, including $170,000 for the unit itself plus transportation and installation costs. Now he has a place for his parents and in-laws to stay when they visit.

"They like to come visit and stay with us for a couple of months every once in a while to spend more time with their grandkids,” he said. “We thought having this dedicated space that's detached from the main house would make everyone more comfortable."

ADUs can also be used as home offices or rented out as income properties if zoning allows.

Critics say the units detract from neighborhood character, reduce available parking, depress property values and strain neighborhood amenities. And it's not always as smooth a process as Owen experiencied.

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More states are allowing ADUs

Jeremy Pearman, a spokesman for Samara, the company that built Owen’s home, said they were able to get a permit for the ADU submitted and issued in seven days thanks to California’s streamlined ADU approval process..

As HousingWire explained, California is among a number of states fast-tracking ADU approvals, along with Colorado, Ohio, Arizona, Massachusetts and Hawaii.

Governments are greenlighting ADUs in response to the nationwide need for affordable housing and buyers’ demand for smaller homes “closer to where the urban action is."

Some states are ending a ban on owner/occupancy requirements, allowing ADUs to be sold separately from main residences. This makes it easier to build ADUs on multi-family properties.

They’re requiring utilities to post connection information for services for ADUs, and require cities to develop programs to streamline ADU approval.

Is an ADU right for you?

If you are considering an ADU, it's important to think about the big picture to ensure this type of housing unit is right for you. The Colorado architecture firm F9 has some helpful guidelines.

Before starting construction, make sure you understand:

Zoning and permitting requirements. You may want to talk to a local architect that understands ADU regulations. You will want to contact your local planning department about the project to see what’s entailed in terms of zoning.

Design and layout considerations. In a smaller dwelling, every inch counts. Whether it’s going to be used for family, as a home office or as a rental income property, make sure you get an ADU that's a good fit for your needs. Designing a multi-generational, accessible space is a good way to future-proof your purchase.

Time and cost involved to get hooked up to utilities. Find out whether your existing home can supply a secondary unit with electricity, heating and air conditioning and indoor plumbing or if you’ll need separate services.

Local rules on renting out the ADU. Not all jurisdictions will allow this.

Budget and cost. An ADU can cost anywhere from $300-$800 per square foot. Make sure you budget accordingly and put away at least another 20% to account for overages and challenges in the construction process. Also consider how an ADU will affect your property taxes and insurance in the long term.

Lastly, if you plan to install a portable ADU like Owen that's going to be craned in, don't forget to alert your neighbors so they can come out and watch the show as it's being delivered.