They’ve been called “in-law apartments” and “granny flats.” But the small homes known as accessory dwelling units, or ADUs, are increasingly being used to house adult children, or for extra rental income for homeowners.
More than a year after Massachusetts legalized ADUs statewide in single-family housing zones, production of the small homes is climbing. More than 1,600 applications were filed in the law’s first year, and more than 1,200 permits were issued, according to state data. But a new report from Boston Indicators says that legal change alone won’t spur enough construction to help the state’s broader housing shortage.
“This was a step in the right direction, but it was still a conservative step, and that’s holding back the state from seeing as much ADU production as people need and as the state really could use,” said Amy Dain, a senior fellow at Boston Indicators who authored the report.
Overlapping state and local restrictions continue to create confusion, increase costs and slow projects, she argues. The study recommends broader statewide standards to replace many municipality-by-municipality rules governing dimensions, parking, utilities and permitting. In the face of a housing crisis — with the state itself estimating that 220,000 new homes need to be built by the end of 2035 — Dain sees ADUs as a potentially significant piece of the puzzle.
What looks like a potentially simple fix, though, may not be so easy when it comes to wresting further local control from communities.
Cities and towns have allowed ADUs in some form for decades, but supporters say the statewide change removed major barriers and encouraged more homeowners to consider building them.
The law requires every community to allow ADUs by right in single-family zoning districts, defining an ADU as a residential unit under 900 square feet built on the same lot as another home. It bars municipalities from imposing minimum lot sizes or restrictions dictating who can live in the unit or how long.
While many people think of them as detached backyard cottages, they can also take the form of basement apartments, garage conversions or additions to an existing house.
The report recommends raising the maximum allowed ADU size to 1,200 square feet, standardizing setback and height requirements statewide, removing local parking mandates and allowing additional ADUs by special permit. The report also questions whether the state will reach its projection that legalizing ADUs will yield up to 10,000 homes in the first five years.
Where are ADUs being built?
Boston, Plymouth, Lawrence, Nantucket and Lowell are leading the state in ADUs permitted in 2025, according to state data compiled in the report.
Despite lingering restrictions, Dain said the law is already helping families by giving them more space or a new form of rental income.
“It’s like thousands of people are solving problems now — for themselves — now that the state is enabling them to,” Dain said, “ADUs help them to figure things out, make ends meet, make things work for their families.”
Arlington began allowing ADUs several years before the state law passed. Town Manager Jim Feeney said town residents have been generally supportive.
“It became a very viable option for different family circumstances to permit multiple generations to live together, or to allow seniors to downsize and stay on the lot,” Feeney said.
Building inspectors around the state have reported a “surge in calls” from property owners asking about ADUs, according to the report. But many homeowners are inexperienced at navigating construction financing, contractors and complex permitting systems.
“A range of regulatory requirements ... add cost, time and uncertainty to projects that are already financially marginal for many households,” the report states.
Confusion over a patchwork of regulations
Boston, for one, has partnered with the company Backyard ADUs to promote use of the units. CEO Chris Lee says demand has increased since the law took effect, but inconsistent local rules continue to raise costs.
“It’s extremely difficult to scale production, and also keep costs down when we are dealing with about 351 separate permitting authorities — each of which can enforce state building code differently, and also invent their own survey requirements, conservation policies, utilities hookup requirements, Title 5 overlays, stormwater requirements and so on,” Lee said.
The Boston Indicators report argues that one of the biggest obstacles is the patchwork of local regulations layered on top of state rules. It recommends regionalizing some permit reviews, like Franklin County, especially where smaller communities may lack staff with expertise.
Malden City Councilor Ryan O’Malley said his city is supportive of ADUs and that more uniform rules could be helpful, with limits.
“Within that, if that was to be done, allowing some type of local control and local review — I think — is essential,” he said. “If someone has a nice serene backyard and then all of a sudden you have a house dropped directly next to their oasis, I think that that could create a lot of conflict in the community, which we don’t really want either.”
Utilities are also a major source of confusion, the report found. Homeowners must navigate separate requirements from local governments, utility companies and the state. The report recommends consolidating them into one centralized statewide guide.
The complex layers, Dain said, are keeping costs to build ADUs higher than they need to be. The report also recommends comprehensively reviewing and streamlining environmental and infrastructure regulations, including septic and stormwater, and wetlands rules, while preserving protections.
“It’s almost hard to convey the complexity of our land use regulation system … you’ve got zoning, wetlands, septics, stormwater regulation, building code, fire code, other codes,” Dain said.
Still, she thinks the success of the state law shows how relatively small policy changes can quickly increase housing production.
“The good news is that we have it in our control to change this,” Dain said, “and immediately you see an uptick of housing production.”
Feeney in Arlington cautioned against eliminating all local control over ADU regulations.
“There’s no such thing as one size fits all,” he said.
