Ron Durand shows the apartment above his garage where his daughter and granddaughter live in Newmarket, N.H. Durand was the first to build an accessory dwelling unit since the town loosened regulations to encourage more housing options. (Kevin Hardy/Stateline)
Read more Stateline coverage of how communities across the country are trying to create more affordable housing.
NEWMARKET, N.H. — Aside from an extra mailbox, there’s little indication from the street that Ron Durand’s lot is home to two homes.
But tucked above the garage is a two-bedroom apartment, where his daughter and granddaughter live. It’s the first accessory dwelling unit to be built since the town of Newmarket eased its housing rules last year.
The idea isn’t new: For generations, some homes included extra units, sometimes called granny flats or in-law suites. But state lawmakers and city planners across the country are increasingly eyeing ADUs as one way to combat the challenges of housing affordability and availability, including in rural areas.
ADUs are cheaper to build than new single-family homes and face less of the pushback that frequently accompanies big housing developments such as apartment complexes. Still, the idea has faced opposition from some residents who worry about added density in their neighborhoods, which could bring parking, traffic and utility challenges.
Home to about 9,500 people, the town of Newmarket showcases how quickly attitudes are changing on the issue: Just a few years ago, another family looking to convert a garage attic on their rural lot gave up after facing too much red tape and resistance from town leaders.
But now, the town’s planning department is outright encouraging the units, easing restrictions on how and where they can be built.
Durand stresses that the idea won’t work for every property, but he thinks more homeowners should consider ADUs.
“Not all situations are probably this ideal,” Durand said. “This just happened to work out really, really well.”
His neighbor seemed to agree. Next door, crews are building a small ranch home in the back of the main house’s wooded lot, allowing its aging owners to downsize and bring the next generation into the larger home.
Wearing his “This Old House” cap, Durand shows the detached double garage that holds his wife’s car and his well-equipped woodworking shop, where he builds everything from birdhouses to barn quilts. Around back, a staircase and deck lead to the apartment above. At 780 square feet, it’s almost as large as the two-bedroom main home.
Durand’s conversion cost about $300,000 — not cheap, but certainly much less than the cost of new housing in the area: Just up the hill, newly built condos start at nearly $900,000.
The apartment is finished with light wood floors, granite countertops and stainless steel appliances. Just steps away from the main home’s back porch, Stacey Durand said the apartment provides enough privacy for her and her 5-year-old daughter, who gets to spend more time with her grandparents.
Crucially, it’s allowed her to stay in the pricey community, while the rent she pays offsets the construction costs.
“I couldn’t afford anything here,” she said.
Policymakers here and across the country are aiming to create more of these sorts of housing units: In recent years, 14 states and the District of Columbia have passed laws to encourage ADU creation, according to the Mercatus Center, a conservative think tank at George Mason University that tracks the issue.
California lawmakers set off an ADU boom with 2016 legislation that streamlined the state’s permitting process.
Between 2016 and 2022, more than 83,000 ADUs were permitted across the state, according to the housing organization California YIMBY. Such units have proven particularly popular in high-cost markets, including Los Angeles and San Diego. As of 2022, nearly one-fifth of all new homes created in the state were ADUs, according to the organization.
Now, policymakers are increasingly considering the idea as a way to add housing stock in small towns and rural communities.
We just need to do a lot of different things. And this is just one piece of the puzzle that we can help jump-start and get people more affordable housing.
– Montana state Sen. Greg Hertz, a Republican
“I think it can be deployed everywhere,” said Montana state Sen. Greg Hertz, a Republican who last year sponsored legislation that gave property owners the right to build one accessory unit and barred municipalities from imposing certain ADU restrictions.
It was among several housing measures challenged by Montana homeowners in court, though the Montana Supreme Court last month upheld the law.
Hertz said ADUs alone won’t solve the crisis with rising home prices, but he said they can be part of the solution.
“We just need to do a lot of different things,” he said. “And this is just one piece of the puzzle that we can help jump-start and get people more affordable housing.”
The ‘gateway drug’ for additional housing
ADUs can’t fix the housing shortage, but they can make a difference, said Jason Jordan, principal in public affairs at the American Planning Association, which includes thousands of city planners and public officials.
They’re generally more politically palatable because they can increase housing density and inventory without drastically changing the fabric of neighborhoods.
“I sometimes think of it as the gateway drug of zoning reform,” he said.
Some homeowners build backyard cottages or garage apartments to create a rental income stream. But oftentimes, the units house an aging family member who wants to downsize or a young professional who just completed school.
“It’s an easy story to tell,” Jordan said.
The planning association has for years worked with AARP to develop model legislation on ADU creation. Jordan said more states will be taking up the issue in 2025 legislative sessions.
While attitudes are changing, he said, homeowners in a majority of municipalities are still banned from adding additional units by their local zoning regulations.
Even when legislatures condone ADUs, local governments can still layer many rules and regulations that make them difficult or impossible to build, said Emily Hamilton, senior research fellow at the Mercatus Center.
Some states, including California, have refined their ADU laws in recent years to remove potential local barriers such as parking requirements and setbacks from the street.
“There are so many ways that localities can obstruct ADUs, if that’s their goal,” Hamilton said. “So like in California, it’s been a process of dozens of statewide ADU laws that have passed to get to the point where they’re really broadly feasible to build.”
Like other developments, ADUs can face resistance from neighbors who have voiced concerns about traffic, parking and decreased property values. In Montana, a group of owners of single-family homes, Montanans Against Irresponsible Densification, filed a lawsuit arguing that ADU legislation took away local control and didn’t address housing affordability, the Daily Montanan reported.
“More important than economic value is the moral, aesthetic neighborhood values that my wife and I share with the neighbors, all of which will be adversely affected if my neighborhood is impacted by development which is more dense,” Glenn Monahan, one of the organization’s members, wrote in an affidavit.
Last month, the state Supreme Court reversed a lower court decision, ruling that the group had failed to meet the requirements needed for a preliminary injunction.
Changing attitudes in New Hampshire
Perched atop a hill overlooking green farm fields, Bill and Gail Nostrom’s property offers a scenic portrait of autumn in New England.
Signs for farm fresh eggs and pumpkins dot the winding roads that lead to the house lined with maple trees and garden beds. It sits on a wide cul-de-sac but with 2 acres, the neighbors’ homes are barely visible.
Just before the pandemic, the couple wanted to convert the attic of their detached garage into an apartment for their son. But that effort was stymied by town rules that ADUs be physically attached to homes.
While the property is miles away from the neighborhoods and businesses at the heart of Newmarket, it — like all rural areas in the state — is considered part of a town and is still subject to town zoning and building regulations.
Gail Nostrom said one town official outright said they didn’t want to see “that type of housing” pop up across the community.
“We just thought, boy, what an answer,” she said. “But the powers that be are the powers that be.”
So, they set the idea aside and left the garage attic unfinished. It remains a dusty storage space with garlic bulbs drying from the rafters and odds and ends lining the floor.
“We’re over it,” she said.
But their challenges piqued the interest of state Rep. Ellen Read, a Democrat and Newmarket resident.
Earlier this year, Read introduced legislation to make it easier for property owners to create ADUs by requiring that localities allow up to two units without any special requirements over lot sizes, setbacks, aesthetics or design review.
While New Hampshire law allows ADUs, Read said local governments can still create burdensome restrictions such as multiple parking spaces for a new unit or that the unit be attached to the primary home.
“We do have that right to one ADU in place, but the towns are able to deny it for really kind of arbitrary reasons,” she said. “And it’s just kind of ridiculous.”
Her legislation passed the state House but did not advance through the Senate. Read has already submitted the bill again ahead of the 2025 session.
But her community is moving forward either way.
To spur ADU development, Newmarket last year eased zoning rules by reducing ADU parking requirements and allowing units detached from the primary home.
“The zoning was really kind of out of touch with reality and what the community wanted,” said Bart McDonough, Newmarket’s planning and community development director.
Communities across the Granite State are making similar moves.
In Dover, city leaders partnered with a credit union to allow homeowners without enough home equity to obtain construction loans to build ADUs, WMUR reported.
Organizers of a regional ADU design competition in New Hampshire were overwhelmed with dozens of applications, said Todd Horner, executive director of the Southwest Region Planning Commission, which covers 34 towns and 1,000 square miles.
“I’ve seen the interest increase drastically. It used to be like, ‘Ehh, that’s just a weird thing that some communities do,’” said Mari Brunner, senior planner for the city of Keene in the southwest corner of the state. “Now, I think almost every single community is looking at it.”
Keene, a community of about 23,000, relaxed its ADU requirements last year. While ADUs aren’t exploding, they are growing: Between 2017 and 2023, six units were added. In the past 18 months, Brunner said, five permits have been submitted, three units are under construction, and two are still under review.
Nearby, in the quaint hamlet of Peterborough, town leaders have sought to ease concerns about the housing additions by showcasing how little they change neighborhoods. Earlier this year, town leaders led a bus tour to offer a view of what the units looked like inside. They also played a game of “I Spy” while aboard the bus, said Danica Melone, the town’s director of planning and building.
“The purpose of that was to really show that a lot of these ADUs blend right into their surroundings,” she said. “They’re hiding in plain sight.”
Peterborough, home to about 6,500 people, currently has about two dozen ADUs. Each unit moves the needle by opening up a house or apartment for someone else, Melone said.
“It’s kind of a carousel of housing,” she said. “Moreover, now we have someone who’s living in the community, who’s going to continue to contribute to our tax base. … It most definitely has an impact.”
Editor’s note: This story has been updated to correct the populations of Newmarket and Peterborough.
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