• UK-based architecture firm Koto makes cabins that are available in the US for the first time.
• The Niwa collection of minimalist tiny homes comes in four sizes from 67 to 403 square feet.
• The sleek cabins, priced from $52,000 to $187,000, could be used as a backyard office or a sauna.

Call it a cross-cultural connection: Koto, a UK-based tiny-home firm that fuses Scandinavian and Japanese design, is now delivering to US customers.

Founded in 2017, Koto specializes in cabins, modular homes, and sculptural small-scale architecture for residential and wellness-focused spaces, including hospitals. Its flatpack collection, Niwa, is a series of sustainably crafted cabins that can be delivered as panels and assembled on-site.

"Our designs are like Ikea," Koto cofounder Jonathan Little told Business Insider. "But instead of a box, they go into a container. They can be shipped around the world and installed pretty much anywhere."

The Niwa comes in four sizes: small (67 square feet), medium (135 square feet), large (269 square feet), and extra large (403 square feet). Prices range from $52,000 to $187,000, with additional costs for custom features and upgrades. It is the brand's first modular design that is available worldwide.

Following a consultation, customers can purchase a design license from Koto, priced between $938 and $2,152. This cost is not included in the cabin price and is refunded after the cabin is purchased. While clients are responsible for securing permits and hiring local contractors for site prep and installation, Koto offers support throughout the process. It can also be hired for concept site design and landscaping.

Each Niwa unit is constructed in a European factory and shipped to the US in panel form. Depending on the location, it is delivered via truck, helicopter, or boat.

Koto began shipping Niwa units — which can be used as backyard offices, saunas, gyms, guest houses, Airbnbs, or anything else — to the US in April. It has already built units for customers in Massachusetts and has other planned installations in Los Angeles.

Tiny homes — also known as accessory dwelling units, or ADUs — are popular across the US. Several states, including California, Vermont, and New York, even offer grants to help homeowners build them on their properties. For some, ADUs provide a more affordable path to homeownership. For others, they offer an income-generating opportunity through rentals or a practical way to create additional living space when the square footage in a main house is limited.

"We're seeing such a diverse requirement for our cabins, both from private individuals all the way up to hotel owners," Little said.

Take a look inside the three Niwa models available in the US.

The design of the Niwa cabins channels clean, contemporary minimalism.

Each Niwa unit has essential features, lighting, and a heating and cooling system. Depending on the size of the unit ordered, a bathroom or kitchenette can also be included.

Koto designed the Niwa collection of tiny homes with nature in mind.

Niwa units are designed to blend into their surroundings and support both on-grid and off-grid living.

Koto builds its cabins using natural materials. The structure is built with sustainably sourced timber. Meanwhile, the exterior cladding is made from Shou Sugi Ban timber — wood treated with a traditional Japanese charring method that makes it fire-resistant.

Koto builds its cabins using natural, sustainably sourced materials. The main structure is made from responsibly harvested timber, while the exterior features Shou Sugi Ban — wood charred using a traditional Japanese method for added durability and fire resistance.

Interior finishes vary by unit type; studio cabins and units people can sleep in typically feature oak or birch plywood, while saunas are finished with hemlock, spruce, or cedar.

Koto wants the people who buy its homes to reconnect with the outdoors.

Little told Business Insider that Niwa's nature-centered design was inspired by his own move from busy London to Norway, where the pace of life is slower, and there's a greater emphasis on the outdoors.

"London has a real fast-paced life," he said. "You work a lot of hours, then go home, rest, and do the same thing the next day. Moving to Norway was the opposite. It was like, yes, get your work done, but be outside with your friends and family, be in the woods in nature."

Each cabin can be installed in under a month.

Niwa cabins typically take eight to 12 weeks to manufacture, with shipping adding another two to four weeks, depending on the destination.

Shipping costs vary by location, but the company estimates US deliveries cost around $9,000.

According to Koto's website, installation for each unit may take four to 14 days.

The collection comes in four sizes: small, medium, large, and extra-large.

According to Koto, the Niwa small unit, which measures about 67 square feet, is ideal for use as a studio or sauna. The ceiling height ranges from 5.9 feet at its lowest point to 11.8 feet at its peak.

The design license fee for this unit is about $940, and the base price starts at $55,286.

The cabins' interior design is simple yet stylish.

The interior finishes of the Niwa units typically feature wood and soft, earthy tones like browns and greens.

This medium-sized Niwa cabin comfortably fits up to six people when used as a sauna.

A medium-sized Niwa measures about 135 square feet and can include a kitchenette, a small bathroom with a shower, and a bed. It's best suited for a single-room sleep cabin, studio, or sauna.

According to Koto, the cabin makes an ideal private office or garden studio. If used as a sauna, it features upper and lower benches with tiered seating for six to eight people. The sauna also includes a separate changing area.

The licensing fee is $1,603, and the cabin's base price starts at about $72,957.

Koto also sells furniture for its cabins.

Customers can also purchase furniture packs from Koto for an additional price. These packs, which range from $7,119 to $9,379, include items like lights, couches, desks, chairs tables, and shelves.

The large Niwa has space for a full-size bathroom.

The large Niwa cabin offers enough space for a living room, a kitchen, and a full bathroom with a shower. Like the smaller models, it's ideal as an office or sleep cabin and can also be used as a gym, according to Koto.

The unit measures about 269 square feet, has a licensing fee of $2,156, and starts at $116,100.

The extra-large Niwa comes closest to a traditional ADU structure.

With 403 square feet of space, the XL Niwa cabin is well-suited as a self-contained studio, gym, or guesthouse. Its generous size makes it the closest match to a traditional ADU within the modular flatpack collection and the best option for long-term stays.

Its licensing fee matches the large model at $2,156, with pricing starting at $187,000.

"I think this one is closer to the ADU market, while the slightly smaller models are better suited for Airbnb or hotel use," Little said.

• Azadeh Weber, 44, lives in rural Washington, about 20 minutes from the closest grocery store.
• She built a greenhouse ADU out of rammed earth and plans to grow fruits and veggies this spring.
• She is excited for her family to be more sustainable and self-sufficient.

This as-told-to essay is based on a conversation with Azadeh Weber, 44, who built an accessory dwelling unit on her rural Spokane, Washington, property. The interview has been edited for length and clarity.

My family and I moved from San Francisco to Spokane, Washington, in 2022.

I'm a clinical psychologist, and both my husband and I have the flexibility to work remotely. We wanted to live somewhere we could buy a larger piece of land.

Our home is in a rural wooded area, with the closest grocery store more than 20 minutes away. We're also in a location where Uber won't pick us up.

We live in a large home of about 9,000 square feet, with four bedrooms and five bathrooms. In 2024, we built a 200-square-foot accessory dwelling unit, or ADU, on our 140-acre property.

We didn't need an ADU for extra space. Instead, my husband and I wanted to make our family more self-sufficient by growing vegetables and fruit on our property.

So we built a passive, solar, rammed-earth ADU that would function as a greenhouse. It will allow us to grow food during the winter when there is less sunlight and warmth in Spokane.

We spent $40,000 on the greenhouse ADU

Rammed earth building is an ancient technique with one of the lowest carbon footprints. It was used to build structures like the Great Wall of China and has been employed in the Middle East.

It's similar to adobe: you take soil, clay, and gravel and mix them together to form solid walls. Traditionally, the walls are held together with lime. However, our project used about 10% cement.

The rammed earth method is better for growing food than a traditional greenhouse because its walls help maintain a more stable temperature.

It took us about a year to complete, and we finished six months ago. We took a lot of breaks, especially during the winter when it snowed.

The project was self-financed. In total, we spent $40,000. Although it took a lot of work, we are happy with the results. The ADU has a modern feel — I absolutely love how it looks.

Construction was challenging but worth it

My father, an architect specializing in passive solar design, inspired this project. In the 1970s, he received a grant from the US Department of Energy to build five rammed earth structures across Utah. In them, he grew fruits and vegetables.

He and my brother helped my husband and me with our ADU construction. We also hired two contractors who assisted with the labor. We spent about $25,000 on labor and $15,000 on materials.

We purchased our materials from a local store, including polycarbonate sheets, doors, Glauber's salt, wood, cement, clay, gravel, soil, PVC pipes, and paint. We also used some of the soil from around our home.

The construction process involved a lot of labor.

To build the walls of the ADU, we filled five-gallon buckets with material, mixed it with water in a mixer, poured it into the forms, and used a pneumatic tamper to compact it. After that, we let it set overnight. We repeated this process until we had enough material to form an entire wall.

The rammed earth walls are one foot thick. To optimize passive solar heating and cooling, the building features two north-south walls twice as long as the east and west walls, with a 10-inch gap between them. Beneath the footing, PVC pipes run between the walls and into the structure.

Holes at the top of the walls create a heat pump that circulates air to enhance passive solar heating. The ADU's roof is also covered with transparent polycarbonate sheets that allow sunlight to enter, while their double panels help retain heat.

In the summer, you can open the vents to release warm air, but in the winter, you close them to keep the air circulating. To further regulate the temperature, we added a Glauber's-salt bin to the ADU, which will maintain the temperature inside within a range of 40° to 85° Fahrenheit.

We're still working on the Glauber's salt system, and its installation is being completed in phases.

We'll begin growing food this spring

We plan to grow our fruit trees and vegetables in the ADU this spring.

In the meantime, we're using the space as a yoga studio. I teach yoga online but don't make much from it. With childcare costs, having a dedicated space at home to teach online is incredibly helpful.

Beyond the practical uses of the ADU, it's been great for my confidence.

I'm from Iran, where rammed earth is an indigenous building method. This technique connected me to my roots and heritage and brought me closer to my identity.

Having the ADU has also provided an opportunity to teach our kids about growing food and the importance of wellness, which is essential because it will allow us to live fuller lives and better pursue our goals.

I don't have any major regrets about the project, but I wish I had been more precise rather than figuring things out as we went along. If I were to do it again, I would try to use more building materials sourced directly from the site.

I would also recommend that anyone consider a rammed-earth building experiment with a test wall or even a fire pit before starting the project, as it can be a difficult process.

Overall, my family is enjoying the ADU. We loved watching our vision come to life and anticipating reaping the fruits of our labor.

• Justin Mauldin built an accessory dwelling unit, or ADU, in his Austin backyard for $41,500.
• Mauldin said the ADU office allows his family of four to live comfortably in a smaller home.
• The ADU also boosted his home's property value, according to his real-estate agent.

This as-told-to essay is based on a conversation with Justin Mauldin, 40, who built an accessory dwelling unit, or ADU, in his Austin backyard. The interview has been edited for length and clarity.

I'm the founder and CEO of Salient, a PR agency that partners with tech startups.

By 2019, before the COVID-19 outbreak, my team had already shifted to a mostly remote setup, with many freelancers working from home or shared office spaces like WeWork. My wife and I decided to make the most of our property and build a dedicated home office.

Our property is within Austin city limits. We live on a quarter-acre lot with a relatively small main house of about 1,200 square feet. At the time, our large backyard was undeveloped, with only a small farmhouse shed on the property.

We added an accessory dwelling unit of just under 200 square feet to our backyard. The cost for the ADU was $32,542, which covered the products, shipping, and installation. I believe prices have increased since then, but we were able to take advantage of a sale and a 10% discount at the time. The total cost of the entire project was about $41,500.

It's been the best decision we could have made for our property. We purchased our home in 2020 for around $450,000, and its value has definitely increased. When we asked our real-estate agent for an estimate, she said it could be worth $750,000 today. (Editor's note: The median home price in Austin has increased 12.8% since 2020, according to Redfin.)

Working from the ADU has been fantastic — it's allowed me some quiet time. We have two young children, so I can "go to work" without being in the main house with all the chaos and noise. It's truly been a game changer.

The construction process was simple and fast

Even though it's separate from the main house, the home office is the most beautiful room on the property — everyone who sees it is completely wowed.

I went all out with super-tall, dramatic ceilings and a massive wall of windows. We also built a fire pit in front, which has become a real focal point.

When we decided to build an ADU, COVID made it difficult to get bids, materials, and reliable contractors, so a pre-fabricated option seemed like the best choice. I went with Studio Shed, a Denver-based company that builds the structure in their warehouse and then ships it to be assembled on-site.

The process was simple, like building with Lego bricks or designing a car. You pick your model, customize the size, ceilings, and windows, and select your upgrades. You can go as basic or as fancy as you want. It's all done online — just like ordering anything on Amazon — and you get the price immediately.

Before the ADU arrived, I cleared the site and poured the concrete pad, which cost about $1,500.

When it was delivered, I didn't want them to just drop off the materials and leave me to figure it out, so I paid a few thousand dollars for them to assemble the structure. The walls, windows, and roof were up in just two days.

After the structure was assembled, a local handyman and I worked on the finishing details, including installing the flooring, painting, adding door handles, electrical work, and other touches. Since the ADU was too far from the main house to connect to our central AC, I also added a mini-split system that I purchased for $600 and paid about $500 to install.

Everything was built and finished quickly. The ADU was delivered on February 1, 2021, and completed by the end of the month.

The ADU allowed our family of 4 to live more comfortably in a smaller house

Given the price of our home, it's clear we're not in a fancy, McMansion-filled neighborhood. Most homes here are 1950s bungalows.

When we first moved into our home, instead of following the common trend — where people tear down these homes to build new constructions — we took the opposite approach.

We wanted to preserve the character, so we did a lot of renovations: replacing the siding, repainting, completely redoing the interior, and reworking the landscaping. I think the neighbors really appreciated that.

Still, we have two girls, so a 1,200-square-foot home with just one bathroom can be a challenge, especially when we have visitors.

Of course, we'd love a bigger home, but with prices still unaffordable, it's tough. When we bought our home, our interest rate was locked at 2.5% — rates now are much higher. Most homes in desirable areas are in the $1.5 million range, and with the high property taxes here, it's just not realistic. We could not afford a place in Austin now without doubling or tripling our housing costs.

For now, we're happy with our place, and maybe we'll add a bathroom one day.

ADUs are becoming popular in Austin, and I can see why

Austin has a housing crisis, yet people still want to live here and continue moving to the city. I think creative solutions like ADUs are necessary.

Over the past few years, the city has made it much easier to add ADUs to properties, especially the type I built, which is under 200 square feet.

Historically, with a permit, you could divide a quarter-acre or smaller property into two lots — one for your main home and the other for an ADU, often for uses like Airbnb. But now, with relaxed regulations, you can simply add a small structure in the back of your property without needing a permit.

While some may have concerns about homes being closer together, I believe this is the best solution for making it easier for people to build ADUs and own homes — and it's working well.

The office has certainly made living in our house much more comfortable.

In today's world, there's so much background noise, whether you're at the office or working remotely, making it hard to focus and be creative. You can try blocking it out with headphones, but there's a big difference between that and being in a truly quiet space.

I'm used to my kids running in and out — that's just part of being a dad — but when I close the door, it's so serene.

Beyond avoiding interruptions, sometimes you just need real focus time, especially for the creative stuff. With all the noise around us, having a quiet space feels like a complete escape.

• Skyrocketing home costs have made it harder for Americans to live where they want.
• New laws in some states allow denser housing, enabling friends and families to live closer together.
• New companies are cropping up to respond to the demand for affordable, community-focused housing.

Phil Levin got an idea that would later inspire his next business venture when he and his wife, Kristen Berman, decided to move out of their San Francisco group home to have more space for kids.

One big hangup was that the real estate founder and behavioral scientist couple didn't want to leave the friends with whom they shared their lives.

Suspecting others felt the same, they founded a compound in Oakland, California, named Radish, where they live with about 20 adults and several babies in a variety of houses and apartments on a one-third-acre lot. They share an outdoor space, hot tub, trailer for guests, and a few communal indoor spaces. The friends watch each other's kids, cook together, and just hang out.

That personal experiment inspired Levin to start a company called Live Near Friends, which helps clients who want to live closer to family and friends find suitable real estate, such as a duplex or a lot that can house multiple small homes.

Levin is convinced that having a support network within a five-minute walk is the key to a happy life.

It might also be the key to more affordable housing. States and cities nationwide have legalized so-called "missing middle housing," which includes duplexes, townhomes, small apartment buildings, backyard tiny homes, and converted garages, creating a business opportunity for entrepreneurs like Levin.

These diverse housing types offer cheaper options and more housing diversity — and they're more conducive to communal living than the detached single-family homes on large lots that dominate the American urban landscape. This can help urban dwellers stay in their neighborhoods rather than being priced out of the city to isolating suburban subdivisions.

"We're sort of opening up these new categories and types of real estate for people and trying to show them how they apply them to their own fantasy of living near friends and family," said Levin, who previously co-founded a car-free real estate development company called Culdesac. He connects his clients with real estate agents, developers, and architects, who can bring their vision to fruition.

Levin says he wants to show developers and city planners that there's growing demand for more community-oriented, medium-density housing. He compares his business model to Airbnb, which has aggregated and juiced the demand for short-term rentals and reshaped housing markets around the world.

"We want the people that build real estate and actually determine the physical form of our built environments" to think of housing and neighborhoods "as a web of social connection, rather than just a bunch of isolated, atomic housing units," he said.

A family in Fremont, California, is taking advantage of the new state laws to keep their multigenerational household together. Anjan, a Silicon Valley software engineer, wanted his parents as close as possible, so he and his wife are building a second home on the same lot their single-family house sits on so his parents can live steps from their two grandchildren.

Having his parents so close "makes a huge difference in the quality of life," said Anjan, who asked to go by just his first name to protect his privacy. "It really does help having the person close by or live right next to you."

A demand for community-focused housing

Catherine Woodiwiss is evidence of that demand. The 38-year-old design researcher spent her 20s and early 30s living in a series of group houses with fellow creatives and do-gooders in Washington, DC. When she moved to Austin for graduate school, she built her new community around another shared house. It was more affordable to live with housemates, but it was also fun and supportive, she found. She built some of her closest relationships with her housemates and collaborated on projects like activist trainings and music nights.

"I made friends with people I never would have found or made friends with otherwise," she said.

But that came to an abrupt end in 2023 when Woodiwiss' Austin group house disbanded. She wanted to stay in her neighborhood, but there were few affordable options outside of an apartment designed for one.

For the first time, Woodiwiss moved into her own place — a smaller apartment in a large building. There are perks of living alone that she's since grown to appreciate, chiefly the time, energy, and "headspace" she's reclaimed. But 18 months in, she still doesn't know the names of anyone in her building, as she said her new neighbors keep to themselves and the building lacks spaces that could foster casual social interactions.

Recently, Woodiwiss visited friends who live at Radish. The community offers the kind of casual, but structured connection she craves.

"I'm both really happy with where I am and can feel that there is a level of commitment and a level of intentional community or intentional collective living that I still really long for," she said.

Legalizing missing middle housing

In recent years, California has loosened zoning restrictions to facilitate more infill housing across the state as part of its effort to address soaring home prices and rents caused by a housing shortage.

Some real estate companies and developers are already responding to the demand — and the changing laws. The Oakland-based firm BuildCasa was founded in 2022 in response to a California law making it easier to subdivide lots and build additional homes on them. The company works with homeowners — including Anjan — who want to split or purchase lots, and with developers who want to build starter homes and other infill housing.

The houses and condos built on properties like Anjan's tend to be between 800 and 1,200 square feet and sell for between 30 and 40% less than the average single-family home in the same neighborhood, said BuildCasa's co-founder and CEO, Ben Bear.

BuildCasa co-founder and architect Paul Steidl grew up in an old mixed-use neighborhood of townhomes in Pittsburgh that he says informs his support for missing middle housing. "When I was younger, when my parents were both working, I could go over to a neighbor's house right next door, or be able to walk down the street to the corner store," Steidl said. "That's an important aspect of my upbringing that I realized growing up wasn't really common for a lot of people that grew up in the US."

Bear and Steidl said they've seen growing demand from developers and philanthropic organizations, which view infill construction as both a business opportunity and a way to address the housing shortage and affordability crisis.

Greenville, South Carolina, is one of the places expanding more sociable living options. Grant Taleck, a content creator who's made videos about communal living for Live Near Friends, is starting the process of building an ADU in his backyard. The city's recently loosened development code makes this possible.

Taleck realized he wasn't alone in wanting to live near friends when his videos about so-called "cottage courts" — clusters of starter homes — and how Americans love the college experience because campuses are walkable communities went viral. The Florida native has already convinced his mother and one of his best friends to move to Greenville, selling them on the city's plentiful "third spaces," walkability, and mixed-use design. He hopes a friend will move into his ADU.

"It's not that hard to convince people," he said. "Once they visit here, they're like, Okay, I want to be here. It's really special."

Do you live near or with friends or in a communal living arrangement? Or do you aspire to? Share your story with this reporter at [email protected].

• 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."