ADU information

The City of Madison is pleased to announce the launch of the Backyard Homes Project and the availability of new financing to support the development of Accessory Dwelling Units (ADUs). The Backyard Home’s Project is a joint effort undertaken by the Department of Planning, Community and Economic Development to foster the development of ADUs and create more housing options through creative solutions.

ADUs come in all shapes and sizes. They are widely known as the small backyard cottage or carriage house. However, an ADU can also take the form of a new housing unit attached to an existing home, or carved out of an existing space like a garage, attic or basement, or built above a garage.

ADUs have been allowed in the City since 2013, but they required special approval through the conditional use process. In an effort to make easier the creation of ADUs, the City made ADUs a permitted use in all zoning districts where single-family homes are allowed. Thus, in these parts of the City, a property owner can create an ADU without needing any special permit or approval.  The City made other changes to the ordinance to increase the allowable size (livable square footage) to 900 square feet, and to limit ADUs to no more than two (2) bedrooms.

Easing the regulatory requirements for ADUs is an important step to encourage their development in the City. However, getting financing to create them remains a major barrier for homeowners.

The City’s Backyard Homes Project will help address that problem by offering direct loans to City home owners interested in developing ADUs. The Backyard Homes Project makes $400,000 available for loans in 2022. This is a limited opportunity and applications will be accepted on a first-come, first-served basis. Learn more about the Backyard Home’s Project by visiting the ADU loan page here.