ADUs Make Housing More Affordable for Older Adults — When They’re Allowed

AARP wants homeowners to have the right to build tiny homes, in-law suites, granny pods and other accessory dwelling units as needed

Miriam Cross,

AARP

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Published April 17, 2026

Dori Gillam reviews the plans for her new detached unit in the basement apartment she designed in 2004.

Chona Kasinger

Key takeaways

Accessory dwelling units (ADUs) let multigenerational families stay close while maintaining privacy and independence.
Many older adults use ADUs to age in place, manage caregiving or offset housing costs.
AARP-backed policy changes are making ADUs easier to build, though costs remain a hurdle.

Dori Gillam moved out of her home of 37 years in September so her daughter’s family could rent it instead of house-hunting in pricey Seattle. But Gillam didn’t go far. In fact, she hasn’t even left the property.

The 74-year-old writer is bunking in the basement she converted into an airy one-bedroom apartment in 2004 as she prepares to break ground on a new structure. The 800-square-foot, two-story detached unit in her backyard will become her next home.

The setup for this multigenerational family is ideal. Gillam picks up her grandson from school as needed and hosts him for the occasional sleepover. Her long-term boyfriend is a 15-minute drive away. And Gillam’s daughter is prepared to take on the role of caregiver as her mother grows older — a task that will be more manageable by living next door.

The new tiny home will be accessible from the ground up, with a roll-in shower and staircase wide enough to accommodate a stair lift.

“We all have to accept that we are aging,” Gillam says. “We want to age easily, working out and driving around ourselves, but we have no idea what will happen. I would rather move into a place that will be easier if I do need a caregiver.”

Dori Gillam stands in her backyard on the site of her future ADU.

Chona Kasinger

The ABCs of ADUs

English basements, tiny homes, backyard cottages, in-law suites, carriage houses, casitas, garage apartments — these are all names for accessory dwelling units, or ADUs. These self-contained living spaces typically share the property with a single-family residence and may be attached, detached or incorporated seamlessly into the main home.

ADUs can create more affordable housing options, allowing people to stay on their properties or in their neighborhoods. Most older adults say they want to age in place, in their own homes or communities, but rent or mortgage costs top the list of reasons they might have to move, according to AARP’s 2024 Home and Community Preferences survey.

Family members or caregivers can live nearby, or these ADUs can serve as a source of rental income for the primary homeowner. One in 4 homeowners 50 and older have thought about building an ADU on their property, according to the AARP survey.

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“People want their homes to be near grocery stores, parks, libraries, maybe a loved one or relative,” says Rodney Harrell, vice president of family, home and community at AARP’s Public Policy Institute. ADUs “are a way to get more housing options in the neighborhoods where people want to be.”

Many states have regulations that prohibit or discourage this housing option. Restrictions range from complex permitting processes to rigid parking rules. But AARP is paving the way for more states to embrace ADUs.

AARP advocates have spent years testifying in state legislatures, educating elected officials and assembling coalitions that span the political spectrum to make it easier for homeowners to build ADUs without the red tape (see box).

Twenty-one states have passed laws in the past few years allowing ADU construction or updated existing laws to be more permissive, with the help of AARP, and many localities have followed suit.

Arguments for more ADUs

AARP is pushing states to allow the construction of ADUs or to loosen restrictive ADU laws. The goal is for homeowners to be able to build ADUs on their properties without needing to seek special permission, as long as they comply with local building codes.

These tucked-away units may increase the number of people living on a single lot. They are growing in popularity, particularly since several states have passed legislation to reduce barriers to their construction, says Jennifer Molinsky, director of the Housing an Aging Society program at Harvard University's Joint Center for Housing Studies.

Opponents often raise concerns that ADUs could affect property values, parking or cause an influx of absentee landlords. As a result, even if a state permits ADU construction, localities may add hurdles to the process.

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But these fears are often unfounded, says Samar Jha, an AARP government affairs director who focuses on housing. AARP supports policies that require the homeowner to stay on the property but lets them choose whether to live in the primary house or the ADU, leaving them free to rent out the other unit. That helps prevent absentee landlords from cycling renters in and out.

Opponents also worry that neighborhood streets could become clogged with cars as ADU residents move in. AARP wants homeowners to decide for themselves whether additional off-street parking spaces are necessary; otherwise, they may rack up more construction costs if they need to enlarge their driveways or build extra space.

As for fears that the neighborhood aesthetic will change, Jha points out that ADUs are typically an extension of an existing home, such as a basement or above-garage unit, meaning they are designed to fit into a neighborhood. In fact, they often increase the value of a home.

“ADUs are not a silver bullet, but they can help with housing supply,” Jha says.

Even when progress is gradual, AARP is making a difference at the state and local levels. In Fort Wayne, Indiana, homeowners once needed special-use permits to construct an ADU. AARP Indiana officials met with city council members and sent letters explaining why this hinders ADU construction, despite a lack of evidence that these tiny homes change a neighborhood’s character or lead to an explosion of short-term rentals.

The city approved zoning amendments in 2025 that meant homeowners can build attached ADUs without jumping through extra hoops; AARP Indiana hopes to win the same permissions for freestanding ADUs.

Harrell wants wary neighbors to look at the bigger picture on ADUs.

“I’ve talked to so many people who have seen their whole lives change,” Harrell says. “They bought their dream house but all of a sudden, their spouse passes and they can’t afford it. Or they can’t get up the stairs and they need a caregiver. Some of the folks worried about changes in their neighborhoods limit their own possibilities later on.”

Some older adults are surprised by the less tangible benefits of living in an ADU.

When Marianne Kelly, 72, was invited by her daughter and son-in-law to share a home with them in Johnston, Rhode Island, she initially said no. She liked her privacy and her independence.

“My goal was never to live with my children,” Kelly says

But the low rent was appealing, so she took the plunge. The 408-square-foot apartment she’s lived in for the past nine years is “the smallest place I’ve ever lived and probably the freest I’ve ever felt,” Kelly says. The apartment is part of the main house, although Kelly has her own entrance.

Kelly gets along well with her daughter and son-in-law and was grateful for their help as she recovered from two surgeries. Her two grandchildren are a door away, and “it’s wonderful for my own morale to have the little ones always bringing me things,” she says.

Overall, “I have all the privacy I want,” Kelly says. “I have experienced some serious medical issues and am well taken care of. And I feel safe and a part of something bigger than just me.”

Dori Gillam hopes to start building her two-story backyard ADU this spring.

Chona Kasinger

Cost is still a challenge

Even when ADUs result in more affordable housing units, aspiring ADU owners need to contend with the cost of building one. ADU construction is hindered by the fact that financial incentives, such as ADU-specific grants, subsidies or low-interest loans, are few and far between.

Gillam had originally solved this piece of the puzzle by refinancing her 1919 Craftsman home to transform its unfinished basement into a 480-square-foot one-bedroom apartment to rent out. (She now lives there while her daughter’s family occupies the family home and she waits to start building her detached unit.) She dug out the basement by another 15 inches to increase headroom and decked out the space with crown molding, glass tile accents and additional windows to fill the space with light. The rental income she earned from tenants more than made up for what she spent in renovations; the security of having others residing on her property was a bonus.

There is a potential bright spot for people who want to build ADUs. Housing bills pending in the U.S. House and Senate — both supported by AARP — include funding for small-scale housing, zoning reforms and reduced permitting barriers, all of which could spur ADU creation if lawmakers pass a final version.

“By supporting small-scale housing production, this bill will make it easier to build accessory dwelling units — an option that can help families meet housing needs across generations,” says Jenn Jones, AARP’s vice president of government affairs.

For now, homeowners often have to get creative.

Gillam first contemplated building a detached ADU in her backyard shortly before the pandemic. She figured she could downsize into that space one day and ultimately leave three units on one property for her daughter to inherit.

Her basement tenant at the time, an architectural graduate student, sketched out ideas. She paused the plan when COVID-19 hit, and is now hoping to break ground on the unit this spring. She is taking out a home equity line of credit to pay for construction and expects the rent she charges her daughter’s family to balance out the cost.

Gillam lucked out with the timing: In 2025, Seattle loosened ADU codes citywide.

AARP Scores Bipartisan ADU Win in Iowa

The desire to age in place in a family home or favorite neighborhood crosses party lines. In Iowa, two dozen organizations from across the political spectrum found they agreed on the value of ADUs and worked together to support legislation to benefit all state residents.

The idea started with AARP Iowa’s state office. Paige Yontz, advocacy manager for AARP Iowa, was mulling over causes that would appeal to Iowa’s Republican state legislature in 2025 when she noticed that model ADU legislation published by the American Legislative Exchange Council, a nonprofit that focuses on limited government and free markets, mirrored AARP’s language around ADUs. That discovery inspired her to find nontraditional partners with a common goal: to advance a bill in Iowa that would permit the construction of ADUs.

To start, Yontz partnered with Americans for Prosperity, a libertarian conservative advocacy group, and the Iowa Manufactured Housing Association, a membership organization for the manufactured housing industry. They drafted a bill that would let the owners of single-family homes build ADUs without onerous rules such as having to obtain a special permit or providing extra parking spaces for ADU residents.

She and her coauthors then assembled a coalition of more than 20 partners that supported this bill. Some groups joined because they believed in property rights or wanted to increase housing stock. Others focused on the caregiving angle.

“It was cool to see lots of people come together for different reasons,” Yontz says. “So often, advocates think you are pursuing [a goal] for one reason, but that’s not necessarily true.”

The bill was introduced in February 2025, signed into law in May and went into effect in July. “We got pretty much everything we wanted,” Yontz says, including a homeowner’s right to build one ADU on their lot without jumping through additional hoops. Cities and counties cannot require additional parking spots or separate utility lines unless it is necessary.

Almost every legislator Yontz spoke with noted that they had heard from their constituents about housing.

“The way we framed the conversation is that this is a housing solution that doesn’t cost the state of Iowa a penny,” Yontz says. “Our traditional model of long-term care in nursing homes doesn’t have to be the only solution. Aging in place is where older Iowans want to be.”