The report emphasizes the potential of Accessory Dwelling Units (ADUs) to address the affordable housing shortage in the U.S. It highlights California’s success in increasing ADU production by removing zoning and regulatory barriers, resulting in a significant rise in ADU permits and completions.  ADU permits in California surged from 1,181 units in 2016 to 24,857 units in 2022.  In 2022, ADUs made up 18% of total new residential construction in California.  While ADUs are presented as a promising solution for increasing affordable housing supply, the report identifies financing obstacles as a major barrier to further ADU expansion.  Also, it notes that current financing options are limited and often inaccessible to many homeowners. It suggests that federal financing reforms are necessary to unlock the full potential of this housing supply strategy.

https://www.urban.org/research/publication/increase-housing-supply-focus-adu-financing