Accessory dwellings are all the rage, and I have some new stats to highlight explosive growth of ADU permits in the United States.
AN EXPLOSION OF PERMITS FOR ACCESSORY DWELLINGS
Some new research from Cotality shows an explosion of ADU permits in the United States, so we have a real trend on our hands. However, I’d like to see how much California means here in the data since California had 72% of the ADU permits in the country in 2025 according to Cotality research.
TOP TEN STATES FOR ACCESSORY DWELLING PERMITS
Check out the top ten states for ADU permits. If you live in one of these states, are you starting to notice more accessory units? They are extremely common here in California, though not in every neighborhood. Being that they are expensive to build, I typically see them in locations above the median sales price. I’m definitely noticing more investors adding them to their properties to create ADU compounds also.
By the way, which state would lead in non-permitted ADUs?
IT’S POLICY. NOT JUST SUPPLY & DEMAND.
It’s nice to see California on top of a list these days since the state gets so much hate online, and leading is a reflection of progressive housing policy to ease the construction of ADUs. This is a powerful reminder that policy shapes the housing market. We often say housing is about supply and demand, but policy shapes supply and demand. All that said, it’s nice to see more accessory dwellings, but we need all types of units, and ADUs alone aren’t the solution to a housing shortage (even though they will help).
THE LINE IS GETTING BLURRY
The line between an ADU and a full-fledged second unit is getting blurry. For instance, last week someone asked me if a duplex with an ADU would be considered a triplex. That’s a good question. Let me ask you this. Is a single-family home with an ADU a duplex? I’m not trying to create confusion. All I’m saying is there are some big questions ahead, and expect a growth curve for the real estate community and lenders. I believe lenders have been behind the ball already with not allowing an ADU on a duplex, but thankfully this is changing (thanks Joe for the comment (I updated this sentence)).
GETTING EASIER TO FIND ACCESSORY UNITS ON MLS
MLS added an “ADU” field a couple years ago, and this is a great feature that many people don’t know about. Check out how many properties come up with potential ADUs when I’m looking at current listings, pendings, and sales in 2026. If you don’t see the “ADU” field while doing a map search, click “fields’, and then add the “ADU/2nd Unit” category so it will show up during every search from now on. You can also try the “Other Structures” field and then select “Guest House” to see if that works. I find when searching for ADUs, we have to try different ways of finding comps. In addition to these two fields, I would also click “search criteria” and “public remarks” to type in stuff like, “ADU,” “mother-in-law,” and “guest quarters.”
The positive here is we have so many types of structures to look through, but we also have to sift through other stuff like a pool house, studio without a bathroom, she shed in the backyard, garage conversion, and other stuff. Remember, an ADU needs a sleeping area, bathroom, and cooking area, so if it doesn’t have one of those elements, then maybe the ADU field shouldn’t be selected on MLS? All that said, real estate isn’t always black and white, so I think no matter what there is going to be some sifting needed. Whatever the case, this is absolutely a step in the right direction, and I appreciate Metrolist being on top of this.