More Home Choices for New Jersey: How Accessory Dwelling Units Can Help Solve Our Housing Shortage

May 15th, 2025 by Laurel Cooke

Laurel Cooke recently completed her MPA at Princeton’s School of Public and International Affairs. Laurel served as the Spring 2025 Social Impact Fellow at New Jersey Future.

If you’ve tried finding a home in New Jersey recently, you already know: the rent is too high, buying a home feels impossible, and competition is fierce. Rentals disappear overnight and homebuyers face bidding wars that drive prices out of reach. Why is it so difficult to find an affordable place to live?

The simple truth is that there aren’t enough homes that match people’s budgets and needs. In New Jersey, a system of “home rule” gives each town wide control over zoning, which often results in restrictive local rules that block the kinds of housing people actually need. But what if one solution is hiding right in our backyards?

Accessory Dwelling Units: A Common-Sense Solution

Known as backyard cottages, garage apartments, or in-law suites, these Accessory Dwelling Units (ADUs) are smaller homes built on the same property as an existing house. They offer affordable living for older adults seeking to downsize, young adults starting out, or essential workers who want to live close to their jobs and families. They are also environmentally friendly–using existing land and infrastructure–and they help neighborhoods evolve by adding diverse housing without drastic changes. Research from the AARP highlights additional motivations for building backyard apartments, such as caring for loved ones, earning rental income, increasing property value, and enhancing safety by having someone nearby.

Joiedevivre123321, CC BY-SA 4.0, via Wikimedia Commons

Cities across America have embraced accessory or backyard apartments, successfully increasing the supply of more affordable housing without drastically altering neighborhoods. Here’s what happened when cities in other states simplified their zoning rules:

Boise, Idaho: 9x Increase in Accessory Dwelling Unit Permits

In December 2023, Boise reformed its zoning code by removing owner-occupancy and parking requirements for ADUs. In just the first few months, ADU permit applications skyrocketed from an average of 3 per month to 27 per month—a nearly ninefold increase. These small rule changes led to 95 ADU applications in just 3.5 months, showing how fast cities can unlock affordable homes by easing red tape.

Denver, Colorado: Opening 70% of the City to ADUs

In 2024, Denver expanded ADU zoning citywide, increasing coverage from 36% to 70% of residential lots. The city now expects 200–300 new ADUs annually, building on a base of 500 permitted over the last decade.

Fort Worth, Texas: Cutting Red Tape to Build Faster

Fort Worth streamlined its approval process, making ADU construction faster and simpler. Homeowners no longer faced complicated zoning approvals and costly parking mandates. The city saw an immediate increase in these types of affordable homes, giving families and local workers more housing options right where they needed them.

Portland, Oregon: Skyrocketing ADU construction

Cities like Portland saw ADU construction skyrocket from just 30 per year to nearly 400 per year after easing zoning rules, demonstrating how practical these changes can be.

Seattle, Washington: 52% Year-Over-Year Growth

After lifting owner-occupancy and parking mandates in 2019, Seattle saw 970 ADUs built in 2023 alone—a 52% increase over the prior year. In total, the city has permitted over 4,000 ADUs since 2020, proving that smart reform drives real results.

Addressing Common Concerns About ADUs

Some residents have understandable questions about accessory dwelling units. Here’s what the research and real-world experiences show:

“Won’t these add too much parking or traffic?”
Not likely. Studies show that households living in ADUs own less than one car on average—half the national household rate. Many ADU residents are seniors, caregivers, or essential workers who already live or work nearby. This keeps neighborhood impact minimal.

“Will these change the look and feel of our neighborhood?”
ADUs are typically built to blend in. Whether it’s a converted garage, basement apartment, or a cottage behind the main house, these homes are small, discreet, and designed to match existing homes—not change the character of the neighborhood.

“Are these just a backdoor for developers?”
No. In most communities, ADUs are built by homeowners, not large developers. They’re often used to house family members, friends, or local workers.

“Will it lower property values?”
In fact, ADUs can increase property value by adding flexibility, usable space, and potential rental income. For many homeowners, they provide a financial cushion while also contributing to the community’s housing needs.

“Will this strain schools or local infrastructure?”
ADUs create housing in a gentle, incremental way—usually just one small home per lot. They support modest growth, helping towns evolve without large-scale development or infrastructure strain.

Why New Jersey Should Embrace Accessory Dwelling Units: A Better Future for Our Neighborhoods

Brett VA, CC BY 2.0, via Wikimedia Commons

By welcoming accessory apartments—granny flats, garage apartments, or in-law suites—New Jersey can provide another tool to ensure affordable homes for everyone. These small, flexible homes help neighborhoods become more inclusive and vibrant while respecting the character residents cherish. Several municipalities in New Jersey have already taken proactive steps to include ADUs as part of their broader housing strategy:

Princeton: In 2020, Princeton passed an ordinance allowing ADUs in residential zones. Since then, 38 ADUs have been built, providing more housing options while preserving neighborhood character.
Maplewood: Adopted an ADU ordinance in 2020, permitting these units under specific conditions.
Montclair: Implemented regulations allowing ADUs in designated residential zones, with specific requirements on size and occupancy.
South Orange: In 2023, South Orange Village passed regulations permitting ADUs that meet certain conditions, expanding housing options for residents.
Jersey City: The city has incorporated ADUs into its Master Plan, recognizing their potential to diversify housing options and alleviate shortages.

But instead of waiting for each municipality to take action, New Jersey can be bold. State-level reforms that would require other municipalities to adopt similar measures authorizing ADUs would expand affordable housing options on a larger scale, support multigenerational living, and enhance community resilience. Our state-level housing issues require comprehensive, state-level solutions. Let’s make room for this one solution already working well across America right here in New Jersey and welcome Accessory Dwelling Units into our neighborhoods.