Accessory Dwelling Units in Raleigh/Cary: house hacking improved

Accessory Dwelling Units in Raleigh/Cary: house hacking improved

Developer · DC & NC · Member since 2019 · 113 posts · 95 votes

Yesterday, the Raleigh City Council approved an ordinance that allows any detached house or duplex to add a second, smaller, "accessory" dwelling unit with its own kitchen and entrance. It can be in a separate building (e.g., a backyard cottage or above a detached garage), an addition to the existing house, or within the same house; it can be rented separately, even as a short-term rental or as a live/work. Any construction still has to comply with the usual UDO regulations, notably setbacks, and do note that this change to the UDO does not go into force immediately.

As has been pointed out here before, the Raleigh area has a very limited selection of multifamily properties. The housing stock in Wake County is heavily tilted towards single-family properties, and now this law means that those can legally become 2-unit properties. It's easier to rent out a fully separate, legal apartment than to rent out a room/suite within a house.

You can read the original ordinance text and background from the Raleigh City Council agenda, but per IndyWeek, the ordinance as passed does not include items 3, 6, or 7 under "D. Accessory Dwelling Unit Regulations."

Raleigh now joins Durham, Charlotte, and even Cary, which has long allowed one "utility dwelling unit" within the same structure.

ADUs have long been popular on the West Coast, so there's already lots of people here on BP who know about them:

https://www.biggerpockets.com/blog/accessory-dwelling-units-tips
https://www.biggerpockets.com/blog/accessory-dwelling-unit-cash-flow

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  • Developer · NC · Member since 2019 · 211 posts · 112 votes
    6y

    what square footage maximum did they approve?

  • Investor · Raleigh, NC · Member since 2015 · 189 posts · 102 votes
    6y

    @Payton Chung did anything change regarding the AIRBNB rules in raleigh?

    .... I think they made a law last year that you can only AIRBNB bedrooms in your own house. Cant buy a house you don’t live in and AIRBNB it.... or something like that

  • Developer · DC & NC · Member since 2019 · 113 posts · 95 votes
    6y

    Max ADU square footage in Raleigh will be 800 sq ft. (Cary's limit on ADUs/UDUs is lesser of 800 SF or 1/3 of principal structure.) Detached ADUs will have to be behind the main house and are subject to setbacks and a 26' height limit.

    No council action has been taken since the earlier thread on "homestays"; they've referred the proposed ordinance for internal review.

  • Developer · DC & NC · Member since 2019 · 113 posts · 95 votes
    6y

    ADUs are also worth considering for flippers. Many of you have doubtlessly noted the demand for dual master suites -- especially to the 20% of Americans (and growing) who live in multigenerational households, but also for the broader market. AARP surveys show that 1/3 of Americans would be interested in an ADU.

    Flippers could also add an ADU to appeal to the large pool of investors who want duplexes but don't want to handle construction themselves.

  • Developer · NC · Member since 2019 · 211 posts · 112 votes
    6y
    Originally posted by @Payton Chung:

    ADUs are also worth considering for flippers. Many of you have doubtlessly noted the demand for dual master suites -- especially to the 20% of Americans (and growing) who live in multigenerational households, but also for the broader market. AARP surveys show that 1/3 of Americans would be interested in an ADU.

    Flippers could also add an ADU to appeal to the large pool of investors who want duplexes but don't want to handle construction themselves.

    False, they're not added as square footage for the appraisal. It's better to spend that money on an addtion.

  • Developer · DC & NC · Member since 2019 · 113 posts · 95 votes
    6y

    And the most cost-effective way to add an ADU (& the only legal way in most of Cary) is as an addition. Fannie/Freddie will appraise a detached ADU as additional square footage, but FHA won't, per a reply here:

    https://www.biggerpockets.com/forums/44/topics/764555-duplex-adu-in-california

  • Raleigh, NC · Member since 2015 · 25 posts · 2 votes
    6y

    @Payton Chung are you going to be building one? If so, I would greatly appreciate the opportunity to speak with you about one of these projects. 

  • Developer · DC & NC · Member since 2019 · 113 posts · 95 votes
    5y

    Not at this time, but can answer any questions you might have!

    Both Morrisville and Apex, too, allows "accessory apartments" (ADUs) by-right in most SFH zones.

  • Developer · DC & NC · Member since 2019 · 113 posts · 95 votes
    5y

    Sure enough, a couple of companies have now sprung up to help property owners build ADUs on their lots. Can't link here, but search for, say, Raleigh ADU Builder and you'll find a few. Both site-built and prefab options are available.

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