ADU Glossary
Granny Flat: Definition, Costs & How It Compares to an ADU
Understanding the most popular name for secondary dwelling units — where the term came from, what it means legally, and how costs compare.
Quick Answer
A granny flat is an informal term for an accessory dwelling unit (ADU) — a secondary living space on a residential property, originally built for aging family members.
Updated April 2026
What Is a Granny Flat?
A granny flat is a small, self-contained living space on the same property as a single-family home. The term originated from the practice of building small cottages or converting garages to house aging parents (grandparents) who wanted to live near family while maintaining independence.
Today, "granny flat" is the most commonly searched and widely understood informal name for what is legally called an Accessory Dwelling Unit (ADU). While the name implies use by elderly family members, modern granny flats serve many purposes: rental income, housing for adult children, home offices, guest suites, and more.
Granny flats typically include a bedroom, bathroom, kitchen or kitchenette, and a separate entrance. They can be detached structures in the backyard, attached additions to the main home, converted garages, or spaces carved out within the existing home (known as Junior ADUs).
Granny Flat vs ADU vs In-Law Suite: What's the Difference?
The same type of housing goes by many different names depending on the region, cultural context, and specific configuration. Here's how the most common terms compare:
| Term | Origin / Region | Typical Configuration | Legal Status |
|---|---|---|---|
| ADU (Accessory Dwelling Unit) | Legal / regulatory | Any secondary unit | Official legal term |
| Granny Flat | Australia / US informal | Usually detached cottage | Informal — same as ADU |
| In-Law Suite | US Northeast / Midwest | Usually attached / within home | Informal — may or may not be legal ADU |
| Casita | US Southwest (Spanish) | Detached guest house | Informal — same as ADU |
| Backyard Cottage | Pacific Northwest | Detached in backyard | Official term in Seattle |
| Laneway House | Canada (Vancouver, Toronto) | Rear-lane accessed | Official Canadian term |
| Ohana Unit | Hawaii | Detached family unit | Official term in Hawaii |
| Carriage House | US historical | Above or beside garage | Historical term |
| JADU (Junior ADU) | California | Within existing home, ≤500 sqft | Official legal subcategory |
Key takeaway: All these terms describe essentially the same thing — a secondary housing unit on a residential property. "ADU" is the official legal term used in building codes, while "granny flat" is the most commonly used informal name.
History and Cultural Context
The concept of secondary dwellings on residential property is centuries old. In colonial America, wealthy families built carriage houses that included living quarters for staff. In the early 1900s, many urban lots included rear cottages, garage apartments, or converted outbuildings.
The term "granny flat" gained popularity in Australia in the 1970s–1980s, where the government actively promoted building small, self-contained units for aging parents on family properties. The idea was practical: elderly Australians could maintain independence while having family support nearby, without the cost of institutional care.
The term crossed over to the United States in the 1990s, where it resonated with the growing need for multigenerational housing. However, most US municipalities had banned secondary dwelling units through single-family zoning by this point, making legal "granny flats" rare outside of a few progressive cities.
The modern granny flat / ADU renaissance began in 2016–2017 when California passed landmark legislation removing most local barriers. Today, "granny flat" remains the most Googled term (40,000+ monthly searches), even though the legal and real estate industries predominantly use "ADU."
Common Granny Flat Configurations
Backyard Cottage
400–1,200 sq ft
The classic granny flat — a standalone structure in the backyard, typically 400–1,200 sq ft. Offers the most privacy and best rental income. Average cost: $150K–$350K.
Garage Conversion
350–500 sq ft
Converting an existing two-car garage into a living space. Popular because the structure already exists, reducing costs to $80K–$180K. May require replacing lost parking.
Above-Garage Suite
400–800 sq ft
A second-story unit built on top of an existing or new garage. Preserves parking while adding living space. Good for sloped lots. Cost: $150K–$300K.
Basement Conversion
400–1,000 sq ft
Converting an existing finished or unfinished basement into a separate unit with its own entrance. Common in the Midwest and Northeast. Cost: $50K–$150K.
Attached Addition
300–1,200 sq ft
Building onto the side or rear of the existing home. Shares a wall but has a separate entrance. Lower cost than detached: $100K–$250K.
Internal Conversion (JADU)
150–500 sq ft
Repurposing existing rooms within the home to create a separate unit. The cheapest option at $50K–$100K but limited to 500 sq ft in California.
Granny Flat Costs by Type
| Configuration | Cost Range | Cost per Sq Ft | Timeline |
|---|---|---|---|
| Detached Backyard Cottage | $150K–$350K | $250–$400 | 8–14 months |
| Attached Addition | $100K–$250K | $200–$350 | 6–10 months |
| Garage Conversion | $80K–$180K | $180–$300 | 3–6 months |
| Above-Garage Unit | $150K–$300K | $250–$375 | 8–12 months |
| Basement Conversion | $50K–$150K | $100–$200 | 3–6 months |
| JADU (internal) | $50K–$100K | $100–$200 | 2–4 months |
| Prefab / Modular | $100K–$300K | $200–$350 | 4–8 months |
Legal Considerations for Granny Flats
The legal landscape for granny flats has changed dramatically in recent years. Key considerations include:
Zoning & Permits
In California and other ADU-friendly states, granny flats are approved through ministerial review — a streamlined process that requires approval within 60 days if objective standards are met. No public hearing, no neighbor notification, no discretionary review.
HOA Restrictions
California law (AB 68/SB 13) prevents HOAs from outright banning ADUs/granny flats. While HOAs can impose reasonable design standards (materials, colors), they cannot prohibit construction entirely or impose requirements that make it infeasible.
Deed Restrictions
Some properties have deed restrictions that limit construction of additional units. California law has invalidated many deed restrictions that conflict with state ADU law, but it's important to check your property's title.
Separate Sale (AB 1033)
California's AB 1033 (effective 2024) allows cities to opt in to allowing ADUs to be sold separately from the primary home via a condominium-like arrangement. This is a game-changer for granny flat affordability and investment potential.
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Get Your EstimateFrequently Asked Questions
Is a granny flat the same as an ADU?
Yes. 'Granny flat' is an informal, widely-used term for what is legally called an Accessory Dwelling Unit (ADU). The terms are interchangeable, though 'ADU' is the official zoning and legal designation used in building codes and permits.
How much does a granny flat cost to build?
Granny flat (ADU) costs range from $50,000 for a JADU conversion to $400,000+ for a large detached unit. The national average for a detached granny flat is $150,000–$300,000, depending on size, location, and finish level.
Do I need a permit to build a granny flat?
Yes, a building permit is required for any granny flat / ADU construction. However, in California and many other states, permits are approved through a streamlined ministerial process within 60 days — no public hearing or discretionary review required.
Can I rent out my granny flat?
In most jurisdictions, yes. California law explicitly allows homeowners to rent their ADU/granny flat to long-term tenants. Some cities also allow short-term rentals (Airbnb), while others restrict them. Check your local ordinance.
Does a granny flat increase property value?
Yes. Studies show that a well-built granny flat (ADU) increases property value by 20–35%. In expensive markets like California, an ADU can add $200,000–$350,000 to your home's appraised value.
Related Glossary Terms
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