Accessory Dwelling Units (ADUs) in Phoenix: A Smart Solution for Modern Living

The traditional model of single-family homes on expansive lots, while once ideal, is increasingly being re-evaluated in rapidly growing urban and suburban areas like Phoenix. Most urban and suburban lots are governed by zoning ordinances and laws that (among other things) restrict the number of dwellings allowed on a given parcel. A dwelling (including an Accessory Dwelling Unit – ADU) is technically defined as a place for habitation that contains cooking, sleeping, and bathing facilities. By limiting many lots to a single dwelling unit, municipalities have historically imposed density restrictions, inadvertently promoting suburban sprawl. However, cities and towns across the nation, including Phoenix, have begun to recognize the pressing need for more flexible zoning arrangements to meet the diverse needs of their residents and address the increasing demand for housing.

ADUs – A Possible Solution for Phoenix’s Housing Needs

By strategically relaxing density restrictions and rethinking how we utilize existing land, particularly in developed areas, we can significantly increase housing options. The accessory dwelling unit (ADU) is an elegant solution: an additional, self-contained home located either within or adjacent to an existing primary residence on the same lot. Because it’s on the same parcel, it cannot be sold separately (unlike a condominium), and in most jurisdictions, it must be owner-occupied (meaning the owner must reside in either the primary home or the ADU). Essentially, it creates multiple distinct living units on parcels that previously supported only one, offering a flexible and efficient use of existing Phoenix real estate.

When separated from the existing home, the ADU is often referred to by various names such as an in-law cottage, a casita, a guest house, a backyard cottage, or a detached accessory dwelling unit (DADU). The very multiplicity of terms we’ve invented to describe them suggests their inherent versatility. It’s this flexibility that makes ADUs so attractive to Phoenix homeowners and urban planners alike. One year, it might be a rent-generating apartment providing valuable rental income for the owner-landlord, helping offset mortgage costs and property taxes. The next year, it could transform into a much-needed home office, an art studio, a dedicated gym, or a flex space. A detached unit, in particular, offers remarkable adaptability for changing lifestyle needs.

Key Benefits of Building an ADU in Phoenix

The advantages of developing an ADU in Phoenix are numerous and resonate strongly with current housing trends and homeowner needs:

• Rental Income Potential: For the owner-landlord, an ADU can generate significant rental income, providing a valuable passive revenue stream that helps offset the primary mortgage cost, property taxes, and the initial investment in ADU construction. This is particularly attractive in Phoenix’s growing rental market.
• Affordable Housing Solutions: ADUs provide a crucial source of affordable housing sized to a renter’s needs, utilizing existing housing stock more efficiently without requiring new land development. This contributes to the broader goal of increasing housing accessibility in the Phoenix area.
• Multi-Generational Living: An ADU offers an ideal solution for multi-generational families. It can provide a comfortable, independent starter property for a young adult child or a supportive living space for an elderly family member who requires some assistance but wishes to maintain their privacy and autonomy. This is often referred to as a “granny flat” or “in-law suite.”
• Adaptability to Changing Lifestyles: The inherent flexibility of an ADU allows it to adapt to changing homeowner needs over time. What starts as a rental unit could later become a spacious home office, an artist’s studio, a dedicated hobby room, or simply valuable flex space as family needs evolve.
• Urban Infill and Reduced Sprawl: By adding density within existing developed areas, ADUs contribute to urban infill, helping to reduce outward suburban sprawl. This promotes more compact, walkable communities and leverages existing infrastructure.
• Efficient Use of Municipal Resources: ADUs better utilize fixed municipal resources such as existing roads, water lines, sewer systems, and other utilities. It’s far more cost-effective for cities to utilize existing infrastructure rather than extending public utilities and roads to new developments.
• Expanded Housing Choices: For residents, ADUs expand the range of housing choices within an established, developed area, offering alternatives to traditional single-family homes or large apartment complexes. This diversification of housing stock benefits the entire community.
• Increased Local Tax Rolls: Because an ADU increases the value of the property, local tax rolls benefit from increased property tax revenues, providing additional funds for public services.
• Addressing Non-Permitted Units: Accepting higher-density standards and adopting clear ADU ordinances also acknowledges the fact that many cities already harbor large numbers of non-permitted (i.e., illegal) ADUs. Legalizing and regulating these units ensures they meet health and safety standards for their residents.
• Economic Impact: Having more members in a community due to increased density often means more local shopping and economic activity, benefiting local businesses.

Navigating ADU Constraints and Regulations in Phoenix

Despite the numerous benefits, not every locale has fully embraced this modified living arrangement. The zoning changes required often necessitate hard-fought battles with prolonged public debate. Resistance to the adoption of ADUs can be found in various forms, stemming from concerns that increased density will change the character of neighborhoods and place an undue burden on local resources, potentially overtaxing services, schools, and water, sewer, and other support systems.

However, Phoenix has made significant strides in embracing ADUs. As of recent changes, the City of Phoenix now allows two ADUs per lot (and even three on certain lots), and each ADU may be up to 75% of the gross floor area of the main house (not to exceed 1,000¹ sq ft for lots up to 10,000 sq ft or 3,000 sq ft for lots over 10,000 sq ft). Crucially, a new state law effective January 1, 2025, now permits ADUs in Phoenix to be used as short-term rentals, overriding previous city prohibitions, though the City of Phoenix initially intended ADUs for long-term affordable housing.

While the specific regulations governing the size and configuration of the ADU vary with each municipality and property zoning, the general limitations are similar:

• Size Limitations: There are minimum and maximum size limitations that need to be verified with local authorities. While the 2015 International Residential Code (IRC) allows an accessory dwelling to be as small as 88 square feet, Phoenix has specific maximums. For lots up to 10,000 square feet, the maximum ADU size is 1,000 square feet. For lots over 10,000 square feet, the maximum size is 3,000 square feet or 10% of the net lot area, whichever is less, but in no case can an ADU exceed 75% of the primary dwelling’s gross floor area.
• Parking: Dedicated onsite parking is usually required. In Phoenix, for lots up to 10,000 square feet, at least one parking space is often required for the ADU.
• Owner Occupation: Owner occupation is typically required for one of the structures (either the primary home or the ADU). This usually also demands a deed amendment-covenant that makes it legally binding, though this can vary by specific Phoenix ordinance.
• Separate Entrance: A separate (lockable) entrance must be present for the ADU.
• Setback Requirements: All setback requirements for both the lot and the structure’s use must be met. For example, converting an existing garage into an ADU might be limited if the garage doesn’t meet the more stringent dwelling setback requirements.
• Current Codes: The ADU must meet all current building codes, which can be limiting if converting an existing older structure.
• Utility Avoidance: You won’t be able to build over any existing buried utilities (power, sewer). These should be surveyed and identified prior to undertaking the project, as they may limit development possibilities.

The ADU Permitting Process and Costs in Phoenix

The permitting process for an ADU in Phoenix can be complex. The City of Phoenix has an established process, including site planning approval and residential submittal. ADU permit costs in Phoenix can range significantly, with some estimates starting around $3,000 to $10,000 and up for permits alone, in addition to construction costs. While it’s difficult to give an exact figure for ADU construction costs in Phoenix due to variations in size, configuration, and local building costs, initial estimates suggest starting around $150,000 and ranging from $550 to $700 per square foot. The higher per-square-foot cost compared to a typical home is due to the fact that you’re fitting all essential living accommodations (kitchens and baths are expensive) into a smaller footprint. A freestanding unit is fundamentally more expensive than a unit within a home.

An architect or a designer will be best positioned to help you understand your specific local development constraints and help you navigate the often-complex permit process in Phoenix. You’ll need a detailed design to apply for the permit, secure financing (if necessary), and solicit accurate construction pricing.

As cities like Phoenix adopt smart-growth planning policies that focus less on the automobile and more on creating inclusive communities with a variety of housing options, some jurisdictions have begun to offer incentives for the development of ADUs: technical assistance for prospective landlords, pre-approved plans, low-interest loans, and even waived permit fees. This continued development pressure to provide more housing means the ADU is ripe for architectural experimentation and sure to see wider adoption across the Phoenix metropolitan area.

Your Phoenix ADU Partner: Homework Remodels

For high-end home design, build, and remodeling in the greater Phoenix area that reflects your vision, Homework Remodels is your trusted partner. We understand the specific nuances of ADU construction in Phoenix, including local zoning ordinances, permitting requirements, and maximizing the functionality and aesthetic appeal of these versatile spaces. Our NARI-certified, award-winning designers and craftsmen are eager to work with you to make your vision for your Phoenix home a reality, whether it’s building a new backyard casita, converting an existing garage into an in-law suite, or integrating a flexible living space into your current home.

Start your ADU project in Phoenix by calling us at (602) 932-6981 or emailing steve@homeworkremodels.com to discuss your remodeling project. We offer no-obligation in-home consultations to explore your possibilities and guide you through the process. See our portfolio of exceptional home renovations in Phoenix here, and find more informative blogs on our website to help you make informed decisions about your Phoenix home improvement journey.