When Asha Ellison went to tour her sixth Charlotte home in less than eight years, she couldn’t find the location.
From the street, she saw a single-story brick home. But that was much larger than the building she was looking for that day in 2024. Ellison then peeked behind the main home and saw her rental “cottage in the woods,” she told The Charlotte Observer recently.
Ellison lives in an accessory dwelling unit, also called an ADU, in the Oakhurst neighborhood of southeast Charlotte. An ADU is a secondary attached or detached residential structure on the same lot as a main house. It is often used to house family members (think “mother-in-law suite”) or as a rental property.
Ellison’s experience is what many residents want in Charlotte, a city with a growing population and rising cost of living. And it’s an experience that the city is trying to offer more people.
Charlotte officials are promoting accessory dwelling units as a solution to the affordable housing crisis and the housing shortage.
Last September, the Charlotte Housing & Neighborhood Services Department established a forgivable loan program to help homeowners build these structures. But how many people is the initiative helping to live like Ellison?
In Ellison’s case, her 714-square-foot home is on an almost 0.3-acre lot that also houses a converted duplex.
She lives alone in a two-bedroom, one-bathroom unit that comes with a kitchen and her own driveway. A privacy fence sits between her property and the main house, creating a path for animals she’s now named: Jasper the raccoon, Buzzy the squirrel and Scooter the deer.
Her base rent started at $1,550 per month and was raised to $1,580 in her third year. While the rent costs more than her previous residences, she feels like she has a home.
“It’s given us the opportunity to live in a mature neighborhood that, based on our jobs, we would not be able to afford to buy homes,” said Ellison, director of research translation and engagement at the Charlotte Urban Institute at UNC Charlotte. “This has been just a more affordable option for me to have the lifestyle that I wanted, where I have my own house.”
Accessory dwelling units in Charlotte
ADU construction has surged across the country in recent years, as municipalities face a housing shortage and increased housing prices.
The units increase housing density and provide homeowners space for aging family members or rental opportunities. From 2009 to 2019, national first-time ADU listings averaged 8.6% in year-over-year growth, including for-sale and for-rent properties.
In 2023, Charlotte updated its zoning rules to make more lots eligible for these secondary structures.
It is becoming more common for cities to prioritize ADUs and affordable housing in policy, said Eric Moore, a senior research associate at the Charlotte Urban Institute.
Last September, Charlotte announced its pilot initiative: the Queen City ADU Program. Open to homeowners with eligible properties inside the city limits, the program promised up to $80,000 in forgivable, interest-free loans to help build an accessory dwelling unit.
“This funding is designed to reduce financial barriers to development while expanding affordable housing options in Charlotte,” the city noted in a document about the program.
For the loan to be forgiven, among other requirements, participants must rent their space to those who make up to 80% of the area median income. For a family of three, that’s an income level below $80,800. The rent also has to stay at or below the fair market rent for studio units at 70% AMI, which is $1,238.
Every year, if the homeowner submits adequate leasing and income documents to the city, $10,000 of the loan is forgiven. Participants can receive half of the project cost in loans, capped at $80,000.
The city received 243 applications and 21 were selected, according to Anna Brown, a city spokeswoman. The form was open for about a month.
Two homeowners so far have used the loan to build an accessory dwelling unit on their properties, Brown said in a statement. The remaining 19 are in the permitting and building process.
The rising popularity of accessory dwelling units in Charlotte doesn’t surprise Moore. But he would need more time to evaluate the issue to see if the city program is achieving its goals.
No city of Charlotte staff members were made available to talk to The Charlotte Observer about the Queen City ADU Program or its effectiveness.
In-law suite or income source?
Danny Plueddemann used the $80,000 loan he received from the Queen City ADU Program to build a unit on his Druid Hills lot. Now, his daughter who recently graduated from high school lives there.
“As far as I know, I was the first one to get approved and go through the whole process,” Plueddemann said.
Construction took 99 days. A unit typically takes between six and 18 months to build, according to the accessory dwelling units page on the city website. The unit cost $160,000 to build, and $80,000 was covered by a forgivable loan, Plueddemann said.
He estimates that it cost $5,000 to $6,000 to prepare information for the city, including getting drawings and mechanical engineering reports. The city rejected Plueddemann’s first plan and approved his second design.
If Plueddemann continues to submit income verification of the tenant and leasing information to the city annually over eight years, the entire loan will be forgiven.
Charlotte Councilwoman Kimberly Owens also wants to build an ADU that could potentially house her adult children who have struggled to find affordable housing in the city. Primarily, she hopes her mom, who has Parkinson’s disease, could move in from her Illinois home.
“My mom’s situation may be one where she can have a degree of independence in my backyard, and yet have the support of me and my husband, where necessary, as her illness progresses,” Owens said.
Beyond the pilot program, the city features other resources on its website for homeowners interested in building accessory dwelling units.
While one of the four layouts provided by the city can be modified to fit accessibility standards, Owens is waiting for a pre-approved plan that offers maximum flexibility for mobility needs. After getting a $250,000 estimate to construct the property in her backyard, Owens said the cost may be too high but is still interested in building one.
Charlotte developers follow the housing trends
Charlotte ADU Builders, founded in 2023, constructed Ellison’s Oakhurst unit and Plueddemann’s Queen City ADU Program unit.
The company’s partner, Sean McKay, said the business is working on two accessory dwelling units for aging parents.
“They’d much rather be able to look after aging family members, have them on their own property and be able to kind of take care of them and not be leaning on third-party facilities,” McKay said. “That was not something that I thought would be a big part of the interest in these ADUs.”
When the city announced its program, McKay started receiving dozens of calls a day. Now, over nine months after the application process closed, he still receives a couple calls a day from people interested in building through the program.
“There’s a huge, huge waiting list of people that wanted that grant,” McKay said.
Plueddemann is the only person with the grant to go through Charlotte ADU Builders so far.
Ellison’s accessory dwelling unit, which was built before the city program existed, is owned by A Helping Hand Property Solutions 2 LLC.
“There’s a lot of people who have really adverse reactions to multifamily units, but I think that there’s a place for these units in our community,” Ellison said. “And it doesn’t have to change the character of a neighborhood.”
Accessory dwelling units are not just for housing
Accessory dwelling units aren’t always built for permanent housing.
In Plaza Midwood, Robbie and Heather Hodge decided to renovate their backyard to include a pool. “We just really wanted a flexible space that we could use for hosting,” Robbie said.
They decided they would need a bathroom outside the main house. Soon, the couple was applying for permits to build a 410-square-foot accessory dwelling unit.
The building, which serves as both a pool house and a space for visiting family to stay, has a living room that converts into a bedroom, a kitchen and a bathroom.
Hodge worked with a manufacturer in China to supply the glass doors for the structure. The experience led him to expand his custom builds and renovations business, now helping other homeowners source accordion-style doors for properties including accessory dwelling units.
The future of ADUs in Charlotte and beyond
The secondary structures trend is also becoming more popular across the state.
Gov. Josh Stein signed the Regulatory Reform Act of 2026 into law on Aug. 11.
It includes a provision going into effect Jan. 15 that will require some cities to allow at least one accessory dwelling unit for every single-family detached home. The policy applies to non-coastal cities with over 50,000 residents, including Charlotte and Raleigh, unless the city’s regulations already meet the requirements.
Charlotte Councilwoman LaWana Mayfield, the city council housing committee chair, said she believes the Queen City ADU Program will reopen. If it does, more residents may be eligible for it as a result of the state provision.
Homeowners can fill out the Queen City ADU Interest Form to receive updates about the program and use the MyADU Eligibility Tool to check initial building qualifications.
To address the affordability and housing crisis, Charlotte needs as many solutions as possible, said Moore from the Urban Institute. “You hope any initiative that is promoted by the city is going to work,” he said. “But again, as the researcher, we just kind of have to wait and see.”
Ellison thinks Mecklenburg County should consider a similar initiative to increase housing supply for residents around Charlotte.
For Ellison, accessory dwelling units aren’t just associated with regulations and initiatives. She saw people living in pool houses and in-law suites on TV but never imagined she would live somewhere similar. She feels like part of a settled neighborhood.
“That’s something that I love,” Ellison said. “It makes me feel like I’ve got my own little home.”