Prospective homebuyers and renters struggle to find affordable housing options. But there is a way to alleviate the crisis. Let’s play “Two Truths and a Lie” to find out how much you know about accessory dwelling units (ADUs). 

A.  America has an abundance of affordable housing.
B. ADUs, like in-law suites and granny flats, are widely supported by the American public.
C. ADUs can significantly benefit older women.

A. LIE! America is in the midst of a housing crisis. The average price of a home in January 2021 was $236,450, rising 12% from January 2020 to January 2021. In January of 2021, the median cost to rent an apartment was $1,639. The average price of a home in January of 2024 was $310,521 and the median cost to rent was $1,964. For renters in America, the severe housing shortage worsens unaffordability. A record 22.4 million renter households (or half of U.S. renters) paid more than 30% of their income for rent and utilities. Among these households, nearly half (12.1 million) paid more than 50% of their income on rent.

B. TRUTH! ADUs enjoy support as Americans learn about them and the financial benefits they provide to both property owners and renters. The ubiquity of the sharing economy—from Uber to Airbnb—has increased Americans’ comfort with renting out privately owned spaces to strangers. According to a 2021 HarrisX consumer poll commissioned by, nearly half (49%) of American homeowners indicated they would be interested in renting out extra space in their homes for income. 

Overwhelmingly, Millennials (67%), recent buyers (69%), and recent sellers (72%) are willing to monetize their spaces. Additionally, half of Gen X (51%) and a third (34%) of Baby Boomers are interested in the idea.

ADUs offer affordable housing options for renters. Because ADUs are located on land with a single-family house, they have no land costs. Homeowners can charge less than traditional rental apartments of similar size.

C. TRUTH! Women are living longer and working later into their older years. Yet, they are increasingly concerned about their financial futures, as they are more likely than men to have nothing saved or not enough saved for retirement. Homeownership provides long-term wealth-building capability for many women. For older single or widowed women, ADUs can be an exponential financial boost that firms up their retirement nest eggs or supplements retirement income. Renting out ADUs offers these women access to a host of benefits—including guaranteed monthly passive income, increased net worth, tax benefits, credit building, and savings for retirement.

Bottom line: Accessory dwelling units, or ADUs, are a little-known solution to the housing affordability crisis. There are many ways to expand and promote ADUs. States and localities should reform their zoning and land-use regulations and laws to permit the sensible development of ADUs. Federal policymakers could consider conditioning federal grants for housing programs on local permitting reforms or ADU incentive programs. 

To learn more, read the Policy Focus on Promoting Housing Affordability by Expanding ADUs.