The COVID-19 pandemic has served as a potent catalyst for widespread cultural shifts, often with marked impact on residential real estate. One such effect is the growth of an understandable skepticism towards traditional assisted living facilities. Nursing homes have been severely effected by the coronavirus, and families are starting to move their parents and grandparents out of them and into their own homes. In response to this cultural change, developers have risen to meet this skyrocketing new demand for multi-generational living, the Wall Street Journal reports.
The chief development in this area is the rise of the accessory dwelling unit—or ADU. Less technically know as mother-in-law suites or granny flats, ADUs are apartments sectioned off from the rest of the home. They are either attached to the main residence or in a separate building on the same lot. The construction of ADUs has risen dramatically in the past seven months.
Grand Rapids, MI, based company, Urbaneers began a line of prefabricated ADUs back in January, priced $125,000 and $200,000. They have seen a high degree of interest and already shipped out 10 units. Another company, Ed Stevenson’s SonderPods was launched in March and has fielded over 2,000 inquiries already. They plan to up their production to sell 52 or more units in 2021.
A lot of these developers are honing in on major metro areas on the West Coast. For example, in previous years San Francisco Bay area developer, Larson Shores, produced an average of 11 ADUs per year. With the influx of interest spurred by COVID, they are now working on 62. California has, even before COVID, loosened regulations on ADUs—even allowing both a regular AUD and a JADU (junior accessory dwelling unit) to be constructed on the same property—making it a prime market for such developments.
While the cost and regulations can vary widely between states and even from city to city, accessory dwelling units seem to have a bright future. Not only do they facilitate a high degree of privacy and security in multigenerational living, ADUs also allow for more efficient use of land in metropolitan areas where everywhere square foot is precious. In some regions, you can even rent them out, making them a possible source of revenue.