Courtesy Adobe Stock Photographer: Dave Denby
JP Morgan Chase awarded a $3.5 million grant to nonprofit lenders Housing Trust Silicon Valley and Genesis for a pilot program that will offer low-cost flexible loans to Bay Area homeowners who rent out accessory dwelling units (ADUs) to low- and middle-income earners.
Photographer: Dave Denby Courtesy Adobe Stock

Call them granny flats, accessory dwelling units or sheds, but small backyard structures are popping up out West. CNBC's Diana Olick reports:

Second homes, formally called accessory dwelling units (ADUs), are cropping up in back and side yards across America, acting as either rental units or additional space for aging parents and still-nested adult children.

Growth in the sector has been fueled by changes to local and state zoning rules. Some municipalities are struggling with a lack of affordable housing and see these additional units as one remedy.

In 2010 Portland, Oregon, waived impact fees for ADUs, making them significantly less expensive. As a result, the number of ADU permits jumped from 86 in 2010 to 660 in 2018, according to a count by

In California, when a 2017 state law forced cities to relax ADU regulations, permits jumped even more dramatically.

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