Like many Americans, I have an aging parent that is part of the Baby Boomer generation, who is now in need of care. We have looked at options to keep her close by so we can provide care, ideally in our home or backyard.
Accessory Dwelling Units (ADUs) have been gaining in popularity as a solution to our increasing housing shortage, and sometimes ‘tiny homes’ fall into that category.
Understanding Tiny Home & ADU Regulations
There is a growing number of states in the USA that have statewide initiatives to allow ADUs. Massachusetts and Colorado have become some of the most recent additions to this list. Often times states with very high housing costs have enacted these regulations to increase the supply of housing and make it more affordable.
Overall, Pennsylvania and Maryland have stringent zoning limitations, making it challenging to place small dwellings, either as an ADU or as a stand along residence on your land. PA and MD do not have statewide regulations specifically governing ADUs. Instead, regulations are determined at the local level, meaning each municipality or County has its own zoning codes that govern ADUs.
However, for those willing to do the work, there are some pockets of deregulation, and some creative strategies for getting ADUs approved.
Types of ADUs
Attached
Some municipalities, like the one I live in, states that an ADU is permitted, but only inside the existing structure. These can be an independent living unit built in a basement, garage, or other part of the existing house.
- Often the most cost effective ADU construction strategies is to take a large master suite and turn it into a small studio apartment.
Detached
These are secondary smaller housing units on a property with a primary residence. Often these can take the form of a detached garage being turned into an ADU, or a ‘Tiny Home’ being placed in the back yard.
- ECHO Housing: If you have an aging family member that you would like to have close to your home, look at the ‘ECHO’ housing option if it is in your zoning. This is an option similar to detached ADUs meant to house family for a limited time. Usually structures must be ‘Temporary’ (Like a Mobile Home) and occupied be a senior family member.
Types of Tiny Homes
If you have extra land and would like to place a ‘Tiny Home’, what does that mean legally, and is it permitted?
One of the primary considerations for tiny homeowners in Pennsylvania is compliance with the Pennsylvania Uniform Construction Code (UCC), which applies to permanent homes but may not always cover mobile tiny homes. Understanding the classification of your tiny home is the first step in determining the applicable regulations.
1. Park Model Homes
These are ‘Tiny Homes’ which must be under 400 SF and be built on a trailer chassis, designed to be towed. Under codes they are considered ‘RV’s or temporary structures.
- They can be certified by ANSI A119.5, which is a standard for park model recreational vehicles (PMRVs), developed by the Recreational Vehicle Industry Association (RVIA), that covers construction requirements.
- When placing this type of home, the certification is presented to the code/building inspection official, dictating it conforms to the code and is safe for occupancy. Most zoning will restrict them from being suitable for ‘permanent occupancy’, dictating they are only for recreational occasional use.
- Many of these models are built with a sleeping loft, which will not confirm to UCC standards even if the home otherwise meets code requirements.
- Ownership is transferred via a vehicle title, not deed. Real Estate taxes are on ‘personal property’, similar to a mobile home.
2. Manufactured Homes
Manufactured homes, commonly known as mobile or trailer homes, are constructed under the federal Manufactured Home Construction and Safety Standards, otherwise known as the “HUD Code”
These are commonly around 700-1,200 SF in size.
- After finishing the installation of a new manufactured home, the HUD licensed installer must provide a completed HUD Form 309 to the purchaser, the retailer, maintain a copy for themselves, and a copy to the local code official in order to receive the certificate of occupancy.
- Mobile Homes transfer with a vehicle title, not a deed. Taxes are on personal property, not real estate.
Modular Homes
Built in a factory by licensed builders and brought to the site, they are assembled on a permanent foundation.
- Modular homes must be built to UCC standards like traditional stick built homes.
- The homes are fixed to the ground and become deeded real estate, with real estate taxes affixed.
A backyard ADU can take the form of any of the above, provided the zoning on your land permits it. The first step to determining if it is permitted it to provide to the officials what type of ADU and the associated code it will be classified under.
- TIP: DON’T call the zoning officer and ask if you can put a ‘Tiny Home’ in your backyard. This is not a legal term, and they will not know what classification to put you in, rendering you a ‘NO’. Understand the classification and make sure you share what Code will apply to your unit.
Steps to Getting Approved by Zoning
1. Research Local Zoning Laws
If you are searching for areas to place/create ADUs, you will need to check with each township or county as to what their rules are.
While ADUs may be listed as permitted under many residential zonings, watch out for these common restrictions that may limit the ability to create an ADU:
- Minimum/maximum square footage requirements
- No secondary living structures permitted
- Setback requirements, impervious area and lot sizes for secondary structures
- Parking requirements- many require an addition of a parking space
- Who can reside there- many municipalities restrict ADUs to only family members or caretakers for family.
- TIP: We found that some County Planning Commissions keep a running list of which municipalities allow ADUs. The detail on these lists may vary, but it can be a good starting point. Lancaster County was one of the most comprehensive lists we obtained. While many townships restrict ADUs to only family members, there are a few within Lancaster County that permit non-family occupied ADUs. This opens the door for them to become rental units.
2. Meet Building Code Requirements
If placing a secondary detached structure for an ADU, that structure will either be temporary (like a park model RV) or permanent, built on a foundation like a Modular home. Mobile Homes are a mix of the two classifications, as they are considered appropriate for permanent housing, but are placed on a ‘temporary’ foundation.
We were hoping to find a small 600 SF modular home, so it could be considered a permanent addition to our real estate. However, what we found is that most modular home sizes start around 900 SF or greater.
- Some municipalities will have minimum dwelling sizes, starting at 700 SF. This in turn causes many modular builders to provide larger models. ‘Tiny homes’ are still a small portion of the market, which limits the options modular builders provide.
- Whether stick built or modular, the ADU will need to conform to UCC and provide for basis health and safely.
- TIP: If struggling to get a detached unit approved in your zoning, try researching if a detached building for other purposes works: Game Room, Finished Shed, office or other name may work as an alternate building and provide the space you need.
3. Apply for Necessary Permits
Once you confirm that your AUD meets local zoning and building requirements, apply for the appropriate permits. This may include:
- Zoning permit
- Building permit
- Occupancy permit
Permit fees and processing times vary by municipality, so it’s essential to check with the local planning department.
Additional Considerations
Financing
- Temporary Structures like Park Model RVs and Mobile homes may be financed like an RV, with options potentially limited compared to traditional real estate financing.
- Permanent Structures, either detached or attached, may be paid for using a home equity line of credit, refinance, or ‘As Built’ financing loan. Since this is still a ‘New’ concept in this region, many appraisals may not give full value to the ADU once completed. Typically, the appraisal will provide 75% of the actual cost, so be careful not to overspend.
Taxes
Keep in mind that if a building or occupancy permit is issued, it will likely result in more taxes, either as personal property tax or real estate tax.
Homeowners Associations (HOAs)
Even if permitted under your zoning, remember that an HOA may have additional restrictions as well. Make sure you check these before proceeding!
Conclusion
Getting an ADU approved in our region requires careful planning, research, and compliance with local zoning laws. While there is no uniform statewide policy, understanding your municipality’s requirements and parameters can provide a successful solution for astute real estate investors.
As the need for affordable housing continues to grow, we encourage you to be an advocate at your local level in order to make this practical solution more attainable. Many seniors will also benefit from more options to allow them to live close to their families, which benefits all families just like mine.
Many of our clients successfully utilize unique strategies to create wealth that goes down through the generations and leaves a legacy for their community and families. Call us today for expert insight into growing your success.
Sources
- List of States that have ordinances allowing ADUs https://www.mercatus.org/research/policy-briefs/taxonomy-state-accessory-dwelling-unit-laws-2024
- Tiny home providers: https://www.newhomesource.com/learn/best-tiny-home-builders-in-pennsylvania/
