Salt Lake City recently passed new laws around accessory dwelling units (ADUs), providing new opportunities for homeowners. The goal is to increase the supply of affordable housing options for residents of Salt Lake City. It is also suggested that ADUs provide an environmental benefit as less residents would need to commute to work, lowering transportation emissions and encouraging more substantial local development.  

Here are the Top 6 things you need to know about Salt Lake City ADUs:

  1. Expanded Areas: The new laws expand the areas where Salt Lake City ADUs are permitted; including some commercial, residential, and multifamily areas that were previously restricted. This means that more homeowners now have the option to build ADUs on their properties.
Proposed ADU Map Changes

2.  Increased flexibility: The new regulations no longer cap the size of internal ADUs. External ADUs cannot be greater than 1000 sqft on the ground floor. The regulations on height have changed as well, previously an ADU could not be taller than the primary structure, now ADUs in some areas can be up to 24 feet tall.

3.  No Short Term Rentals: Sorry my vacation rental friends! The new regulations do not allow ADUs to be used as a short term rentals or AirBnB.

4.  Streamlined permitting process: Homeowners can expect a faster and more efficient process for obtaining the necessary approvals and permits to build an ADU. The previous laws requiring the Planning Commission to review ADU requests has been removed.

5. Owner Occupied: The previous regulation requiring  the homeowner to live on site will stay in effect. Other cities that removed this requirement saw to great of an increase in ADU development and out of control growth.

6.  Lowered Parking Requirement: While it is still required for ADUs to have designated parking, the requirement has been decreased to only one parking space. This can also be negated if the property is located a quarter-mile from a public transit stop, a half-mile from a city-designated bicycle lane or path, or is in a zoning district.

In conclusion, Salt Lake City's recent laws around ADUs provide new opportunities for homeowners to build these structures on their properties. With increased cost of living, mortgage rates, and inflation cost ADUs are becoming an increasingly attractive option for homeowners in Salt Lake City. It allows homeowners to create an income earning asset, literally right in their backyard.

Do you manage any ADUs in your portfolio? Do you know some of the common issues you'd encounter with this asset class? If you are in the Salt Lake Area or if your area is seeing an increase of ADU development, now is the time to plan for how to manage this property type.