How to Plan Your Backyard Home (ADU) Project
How to Plan Your Backyard Tiny Home Project:
First, let us define what we mean by “backyard tiny home” because we are not talking about “tiny homes on wheels” that don’t come with a plan for last night’s dinner...
What’s the difference between this two tiny homes?
This could be a legal backyard home.
The difference goes beyond the visible wheels.
A backyard tiny home is a residential building code compliant structure often referred to as an Accessory Dwelling Unit (ADU), granny flat, backyard cottage, micro-cottage or even a casita in Southern California. The homes are typically smaller than the existing “big” home on the property, making them relatively tiny. Often they can be up to 900 SF, much bigger than the ~150SF homes seen on Tiny House Nation.
However, the biggest difference between what we build and the image you may have in your mind is that a backyard home must home comply with state building codes. This means it’s secured to a foundation, connected to utilities (sewer, water, electric), and is thoroughly insulated like a normal, standard house. (And, in fact, with the ADUs we build, it will probably be much better insulated than your current home.)
Interestingly, this does not mean that it can’t also be street legal. This will be the subject of another post.
Ok – Moving on to the purpose of this article. How does a homeowner plan and then build a backyard tiny home in New England?
Step One: How will you use the backyard tiny home?
Nobody starts a project like this without a good reason for doing it. I (Chris Lee) have been blown away by the number of different ways homeowners are planning to use a backyard home. Here are a few of the more common uses:
Aging Parents:
The biggest increase in renters and single-member households are seniors, who are also known as somebody’s grandparents. These grandparents are using new zoning bylaws to build a separate home (aka, “detached ADU”) on their children’s properties to save money and be closer to their family. Until recently most of these dwelling units had to be attached to the existing home. That has changed, which makes this option more palatable. We’ve heard families call these homes close, but not too close.
Parents Helping Adult Children:
Given the high cost of housing, construction, and land many children cannot afford to live in the communities in which they grew up. Aging parents have begun downsizing into their backyards and selling their old “big” house to their children.
Caring For People With Disabilities:
There is a huge population of adults with a disability that could live independently if they stayed close to family. A backyard home creates the opportunity to give these persons their own space, the dignity of their own front door and keep their family close enough to provide love and care.
Veterans Housing Veterans:
There is an ENORMOUS opportunity to house pair Veteran homeowners with Veterans that are either homeless or having trouble finding a safe, comfortable place to live. Beyond housing, this approach to providing Veteran housing would create opportunities for mentorship and help Veterans integrate back into their communities.
Full-Time Office & Part-Time Guest House:
For those of us that work from home a backyard home can act as an office and guest house. When family or friends come to visit the office can be set up as a guest house. In most towns, it can even be used for Short Term Rentals, which create the opportunity to completely offset the cost of the space.
As a Rental Unit:
We are in a housing crisis and every backyard has the potential to help alleviate it and generate income for the property owner. Backyard homes can be built to rent to tenants and often produce a CAP rate over 10, which is virtually unheard of in today’s real residential estate market without excessive risk. If the homeowner is willing to rent the home to someone with a disability or senior, they may be eligible for $50,000 at 0% interest that does not need to be repaid until the home is sold.
Step Two: What Can You Build?
Homeowners should determine what they can build on their property before worrying too much about the cost and how to finance construction.
It is tempting for people to simply call their local planning department and ask “How can I build a backyard home?”
But it will serve you a great deal more to do some research on your own first, including taking a look at your town’s ADU regulations. This will allow you to prepare more specific questions and help you get the most out of your local planners’ expertise. Some examples of questions you might have are:
Could you show me where I can get more information about the rules for building an accessory dwelling unit on my property?
Just to confirm, if my ADU is <20’ tall can it still be placed directly on a side lot line?
There is also an enormous amount of information on our website (https://backyardadus.com), including links to the ADU rules of many towns. Read on to see an overview!
Free Resources provided by Backyard ADUs:
We (Backyard ADUs) have spent countless days aggregating and converting local zoning bylaws into plain English to help homeowners begin their process. You can look for your city here, and if we haven’t created a page for your town yet let us know!
We have also created D.I.Y. property evaluation guides that will walk you step by step on how to determine what you can build. Our team actually uses these guides when we create our custom property reports.
If you want to dig into your town zoning bylaw independently, here is what to look for:
The ADU bylaw
Towns in New England will title their ADU section as “Accessory Apartments,” “Supplemental Apartments,” and “Accessory Dwelling Units”. When reviewing this section you must confirm whether a “detached” ADU is allowed, review the restrictions, and what the permitting process consists of.
Set Backs
Each zoning bylaw has a section that defines how close a structure can be built to neighbors. Set back requirements are different per zoning district and can be found in separate tables often called “Area Regulations,” or “Dimensional Regulations.”
Accessory Structures
If a detached ADU is considered an accessory structure, you must review the rules for accessory structures in your town. These can include special set back rules, height restrictions, design requirements, and privacy barriers.
Parking Design:
If the ADU bylaw requires parking to be provided you will need to find the bylaw’s parking section. The zoning bylaw will define exactly how big a parking spot needs to be, where it can be located, and what materials can be used to build it.
Open Space Requirements:
Town zoning ordinances often define the maximum amount of ground that can be covered by structures. Zoning bylaws most commonly refer to this as “Building Coverage Ratios” or “Open Space Ratios.”
Environmental:
Environmental is probably the most difficult part to understand as the rules have some ambiguity and leave room for flexibility. The biggest items homes owners will see are related to restrictions on removing trees, drainage, and runoff.
Step Three: Ballpark Construction Estimate
Once you know what you can build it’s time to get a ballpark number on construction cost. Unfortunately, a ballpark number is really difficult to get from a General Contractor. They don’t like providing these types of estimates for fear of being held to them later on and they simply don’t have time!
When you do get in touch with a GC you will want to sound very confident about doing your project and your ability to pay for it. If you don’t, they will think you are “window shopping” and will not allocate the time to producing a quote. Additionally, don’t be afraid to follow up about the quote once per week until you have it.
Backyard ADU provides fixed prices for our ready-to-build homes, with our standard specs on typical lots to save you time. Check Backyard ADUs prices.
Step Four: Financing Options
First off– financing should not be a reason not to do a backyard home project. I (Chris Lee) have a background in Real Estate Financing and there are so many creative strategies to paying for a backyard home. I have also been blown away by how many publicly funded options are available in Massachusetts to help people with disabilities and seniors age in place.
Cash:
If you are consolidating households the proceeds from a home sale can be used to fund the construction of the new home.
Massachusetts’ Home Loan Modification Program:
$50,000 at 0% interest with no repayment due until the home is sold. This funding is available to help modify a home (building a backyard home counts) for people with disabilities or to help seniors age in place. An accessible backyard home does count as a modification.
Reverse Mortgage:
This option is available for seniors. It can be an extremely attractive option for cash strapped seniors that are trying to downsize. Funds from a reverse mortgage can be used to construct the backyard home, after which, the senior could rent out or even sell their old primary home to generate much-needed cash flow.
FHA “Home Style Renovation” Loan:
This is a construction loan that allows homeowners without excellent credit to do renovations on their properties and still get 30-year financings and the low-interest rates associated with mortgages.
Cash-Out Refinancing:
This is a traditional mortgage refinancing where the homeowner takes out a new mortgage on their home, resets the payment schedule and withdraws cash from their home’s equity. Depending on how much equity is in your home, your current interest and original loan balance, you could withdraw a significant amount of money without changing the mortgage payment.
Home Equity Line Of Credit:
This is a line of credit secured by your house to keep the interest rate more affordable. This option has a higher interest rate than home refinancing and shouldn’t be used to pay for the entire backyard home project.
Self Directed IRA:
An IRA can be used to invest in real estate. By setting up a self-directed IRA, a homeowner could potentially use funds from their IRA to build an ADU as an investment property. This option is somewhat experimental as it is a brand new concept and requires a third-party custodian to keep careful documentation about rental income and expense.
Step Five: Permitting & a trip to the Town Hall
If your town allows backyard homes by right (Northampton, Great Barrington, Montague, Plainfield and much of Cape Cod), your general contract just needs to pull a building permit as if an addition was being constructed.
If your town requires a special permit to build an ADU expect 2-4 months of waiting and a public hearing to review your application. This step usually sucks and can take months. It can be intense and challenging. It will be important to prepare extensively for this type of hearing and it is extremely helpful to communicate with your neighbors to gauge opinions and prevent unnecessary angst during the meeting which can cause delays.
Step Six: Construction
Finally, with a permit in hand, you can build. Depending on what construction methodology you chose, active construction could last anywhere from 2 weeks to 2 months with modular construction being on the shorter time frame.
Want someone else to do all the work?
In case you were wondering, Backyard ADUs is able to help homeowners beginning right at step one in this process. Getting a backyard home planned, approved, and built can be a daunting DIY project. At Backyard ADUs we love to help you get started early on, and can, of course, see you all the way through to completion.