Tiny homes, big improvements: 3 people share why they love living in ADUs

• 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."