• Accessory Dwelling Units (ADUs) have become a popular alternative to traditional homes and apartments.
• Three people who built and moved into ADUs shared with BI how they improved their lives.
• One person said moving into an ADU "was the best decision we ever made."

For newlyweds Aislyn and Ali Benjamin, purchasing a traditional home in Danville, California — a small city just over an hour's drive east of San Francisco — wasn't financially feasible.

It's easy to see why. Data from Realtor.com shows that the area's median home sale price is about $1.9 million as of December.

The Benjamins weren't keen on moving too far from Danville in search of a more affordable home, nor were they interested in renting long-term. So, they opted for another solution: building an accessory dwelling unit, or ADU, in their parent's backyard.

Today, they live in a 1,200-square-foot, three-bedroom, two-bathroom ADU in San Ramon, a city neighboring Danville. The home cost $500,000 to build, which the couple paid with their parents' help.

"This was the best decision we ever made," Ali Benjamin told Business Insider. "It allowed us to save so much money and live where we wanted."

ADUs are an affordable entry to homeownership

ADUs are compact housing units, typically 150 to 1,200 square feet, depending on location. On average, they cost between $100,000 and $300,000 to design and build, though additional expenses — such as site preparation, inspections, utility hookups, and permits — can drive up the total cost.

Thanks to their affordability and minimal land requirements, ADUs have become a popular alternative to traditional homes and apartments, particularly for first-time homeowners like the Benjamins, who navigated high home prices, mortgage rates, and a shortage of available homes.

To boost the supply of affordable housing, several states, including California, New York, and Vermont, have supported ADU construction by offering grant programs to help homeowners finance the building process.

In California, where most backyard homes are built, the state's Accessory Dwelling Unit Grant Program has provided grants of up to $40,000 to qualified homeowners — it's been instrumental in driving the growth of ADUs across the Golden State.

According to an April report from the Urban Institute, ADUs accounted for just 8% of permits and 5% of completions in California in 2018. By 2022, however, they represented 18% of total permits and production.

A couple built an ADU to give their adult son more independence

People build ADUs for various reasons, including generating income by renting out the ADU or their main home. Others build ADUs to create comfortable, semi-independent living spaces for aging parents or adult children who may need assistance or support.

Take Todd Kuchta, a 58-year-old engineer who built an ADU in his Napa, California, backyard for his 26-year-old son, Jacob, who has autism.

As Kuchta's son grew older, he desired more independence from his parents but still needed their help with daily tasks like cleaning, taking medication, and preparing meals.

Unable to afford a larger home or an assisted living facility for their son, Kuchta and his wife hired Bay Area-based ADU builder Villa to construct a 480-square-foot, one-bedroom, one-bathroom tiny home on their property.

The ADU cost over $248,000 to build. The Kuchtas received financing through Napa County's Affordable ADU program, which provided a $63,000 forgivable loan. They also secured a $160,000 loan from a credit union as a second mortgage.

The new living arrangement has mutually benefited the Kucthas and their son.

"Jacob really enjoys living on his own — he's thriving," Kuchta told BI.

He added that he and his wife's "stress has significantly decreased, and they have peace of mind knowing they can still provide the emotional support he needs."

A woman built an ADU in her backyard to age in place

The growing trend of multiple generations living together, either under the same roof or on the same property, has fueled the rise of "granny pods" — small outbuildings designed to provide support while allowing older adults to age in place and maintain their independence.

Struggling with the stairs in her two-story home, 72-year-old Wilder-Abrams moved into a 560-square-foot, one-bedroom, one-bathroom granny pod in her backyard in 2022.

Meanwhile, her 34-year-old daughter moved into the home she had lived in for 35 years — a 2,000-square-foot, three-bedroom, two-bathroom home — with her 3-year-old daughter.

"I was ready to downsize and have a smaller place to live and take care of," Wilder-Abrams told BI. "The home is in an urban area, so there are a lot of possibilities for my daughter, too."

The ADU cost $350,000 to build. Wilder-Abrams secured a second mortgage on her home to finance the construction, as the original mortgage had been paid off years ago. Her daughter now pays $1,500 monthly rent, covering the new mortgage payment.

Beyond the financial benefits, home swapping has provided Wilder-Abrams with valuable physical and emotional support. She said having her daughter nearby was crucial to her recovery after knee surgery last year.

"The first few days, she stayed with me to change the ice packs regularly," Wilder-Abrams said. "It was so convenient for both of us."

• Christine Wilder-Abrams began to struggle with the stairs of her two-story house in California.
• She didn't want to leave her home of 35 years, so she built an ADU, or "granny pod," in the yard.
• Her 34-year-old daughter now lives in the main home, which Wilder-Abrams calls a win for them both.

In 2021, Christine Wilder-Abrams started to struggle with the stairs in her two-story home in Oakland, California.

She wasn't ready to give up the home or neighborhood she had lived in for nearly 35 years, so she found a solution: build a one-story accessory dwelling unit, or ADU, in her backyard that she could live in, then ask her daughter to move into the main house.

"I was ready to downsize and have a smaller place to live and take care of," Wilder-Abrams, 72, told Business Insider. "The home is in an urban area, so there are a lot of possibilities for my daughter, too."

ADUs have become a popular alternative to traditional apartments or houses, in part due to their relative affordability and how little land they require.

These smaller units, typically 150 to 1,200 square feet, cost between $100,000 and $300,000 to build on average. However, additional expenses, such as inspections, utility installations, and permitting fees, can add to the cost.

An analysis of Google search data shows growing interest in "granny pods," or small outbuildings where older relatives or family members who need extra support can age in place while maintaining independence and personal space.

Wilder-Abrams, 72, now lives in the 560-square-foot, one-bedroom, one-bathroom tiny home that she financed and built for about $350,000. Meanwhile, her 34-year-old daughter lives in the 2,000-square-foot, three-bedroom, two-bathroom main house with her three-and-a-half-year-old daughter.

The ADU was a win for mom, daughter, and granddaughter

For Wilder-Abrams, building an ADU in her backyard and having her daughter move into the main house was much more affordable than purchasing a new home in Oakland.

Wilder-Abrams said that her family home, purchased in 1987 for about $230,000, is now valued at over $1 million. As of October, the median home sale price in Oakland was $751,455, according to Zillow.

"It's hard for me to believe houses cost that much today," she said. "How can anybody afford it?"

Beyond affordability, ADUs also offer families an added sense of security. They're a practical solution for adult children or aging parents who want to maintain their independence while still having access to support.

Wilder-Abrams said that the new living arrangements have benefited her and her daughter, who was widowed in October 2023, equally.

"I get to live close to my daughter and granddaughter," she said. "It's nice that I'm here for them."

Wilder-Abrams especially loves seeing her granddaughter regularly. "It's great watching her grow up," she added.

The construction process of the ADU

Wilder-Abrams' tiny home was built by Inspired ADUs, an ADU builder operating in Oakland, Orange County, and the greater Bay Area, which she found online.

Inspired ADUs offers over 70 different layouts, ranging from 300-square-foot studios to two-story units exceeding 1,200 square feet. Prices start at $13,800 for pre-designed or custom ADU plans, $215,000 for panelized kits, and up to $314,000 for a full prefabricated unit. The company also manages the permitting process for its clients.

"The permitting process was really easy," Wilder-Abrams said. "The architect said it'll take about three months, and it took three months."

Construction on Wilder-Abrams' ADU began in 2021. By May 2022, her daughter had moved into the main house, and she had settled into the ADU.

To finance the construction of the ADU, Wilder-Abrams took out a second mortgage on her home, as the original mortgage had been paid off years earlier. She now has a monthly mortgage payment of $1,500, which her daughter pays as rent.

Downsizing can be difficult

Wilder-Abrams' ADU has an open floor plan with high ceilings, large windows, and brand-new European appliances, including a refrigerator, dishwasher, stove, oven, and stackable washer and dryer. Her new home also has its own patio and garden.

"My ADU feels very spacious," she said. "Everybody's surprised by how big it is."

Despite the generous size of the ADU, Wilder-Abrams had to part with many belongings, including most of her longtime furniture — such as her couch and dining room table — as well as items that had belonged to her husband and both of their parents.

"Downsizing is hard. You really have to want to do it," she said.

Wilder-Abrams now has an apartment-sized L-shaped sofa, and instead of a dining table, there's a built-in bench in the ADU where she eats.

"I think having less stuff is freeing. There are just fewer things for me to take care of or worry about all the time," she said.

Wilder-Abrams has more security

Swapping homes with her daughter wasn't something Wilder-Abrams had envisioned years ago, but it's turned out to be a surprisingly successful arrangement for both of them.

"I wasn't sure if she would want to return to her childhood home, but she's happy about it," Wilder-Abrams said.

Another benefit is the support she has received as she ages. Last year, Wilder-Abrams had knee surgery, and she said her recovery would have been much more challenging without her daughter nearby.

"The first few days, she stayed with me to change the ice packs regularly," she said. "It was so convenient for both of us."