Accessory dwelling unit construction in Southeast Michigan
An accessory dwelling unit, or ADU, is a second, smaller home on a lot that already has a house on it. It has its own kitchen, its own bathroom and its own entrance, and it can be detached in the back yard, built over a garage, or carved out of a basement. Wright’s Renovations designs and builds them in the six counties we serve, and the first question we answer is never about design.
It is about whether your municipality allows one at all. Michigan has no statewide ADU law, so permission is decided street by street. A family in Ann Arbor and a family three miles into a neighboring township are reading different rulebooks, and the difference decides the entire project. Everything below is written for Washtenaw, Wayne, Oakland, Macomb, Livingston and Monroe counties, which is where we build.
Where an accessory dwelling unit is allowed near Ann Arbor
Only a handful of communities in our service area clearly permit a second dwelling on a single-family lot today. That list is short enough to name, and it changes slowly. If your community is not on it, an attached suite without a second kitchen is usually still permitted, which is the path most families end up taking. Our in-law suite page covers that alternative in full.
The Ann Arbor rules in plain numbers
Ann Arbor permits one accessory dwelling unit per single-family detached dwelling in its R1, R2, R3 and R4 districts. Floor area is capped at 600 square feet on lots up to 7,199 square feet and 800 square feet on lots of 7,200 square feet or more, or the size of the ground floor of the main house, whichever is smaller. Detached units are limited to 21 feet in height and attached units to 30 feet.
Setbacks matter as much as size. A detached unit cannot sit in the required front setback area, has to stand at least three feet from any lot line, and needs fire rated construction when it sits between three and five feet away. Occupancy is limited to two people and their offspring, and leases shorter than 30 days are prohibited, which rules out short term rental use. No public hearing or site plan is required, though building permits are.
Communities with provisions of their own
Chelsea, Dexter, Ferndale and Berkley have each adopted accessory dwelling provisions, and they differ from Ann Arbor’s and from each other on size, type and placement. Some of that language is recent enough that the operative text is worth confirming with the community development office before a designer draws anything. We make that call as part of feasibility rather than leaving it to the homeowner. See our Chelsea and Michigan service area pages for where we work.
Where the answer is currently no
Several communities in this region do not permit a detached second dwelling on a single-family lot, including the city and township of Ypsilanti and Pittsfield Township. Detroit has drafted an ordinance that had not been adopted as of the spring of 2026. A few townships have amendments in progress. None of that stops an attached suite, an addition or a finished basement with a bedroom and bath, so the project usually survives in a different form.
What an accessory dwelling unit costs to build
Nationally an ADU runs $100 to $300 per square foot, or roughly $30,000 to $240,000 depending on type. In this market a detached, permitted, fully finished unit generally lands between $150,000 and $320,000 once you account for a frost depth foundation, utility trenching and a Michigan building envelope. Conversions run considerably less because the shell already exists.
New detached construction
A detached unit carries every cost a small house carries, which is the part that surprises people who expected a garden building. Excavation, footings below 42 inches, slab or crawlspace, framing, roofing, siding, windows, a full mechanical system, a kitchen, a bathroom and a trench carrying water, sewer and power from the main house. It is a house, at a small scale, and the small scale does not lower the per foot number.
Garage and basement conversions
Converting is the cheaper path. A garage apartment runs $200 to $350 per square foot, and a basement unit is usually less than that where ceiling height and an egress opening already work. Both are covered in more depth on our garage conversion and basement rental unit pages. A separate utility meter, if you want one, adds $2,000 to $5,000 on top of either.
Before you commit to a number, run your square footage through the addition cost calculator and read the Michigan addition cost guide. Both are built on this market rather than national averages, which run low for the kind of work required by our climate and our older housing stock.
The statewide picture, and why it has not changed
Legislation that would limit how local governments restrict accessory dwelling units was introduced in the Michigan House in February of 2026 as House Bill 5585. It sits in the Government Operations committee, has not passed either chamber, and has lost cosponsors since introduction. Municipal and township associations have organized against it.
What that means for a homeowner is simple. Do not plan a project on the assumption that state law will open your township within your build window. Design for the rules that exist in your community today. If the law changes later, a suite built to current code is easy to convert; a project stalled waiting on a bill is just a project that never happened.
What makes an ADU different from an addition
An addition adds rooms to your house. An accessory dwelling unit adds a household. That distinction drives the zoning review, the utility design, the appraisal and often the property tax treatment, and it is the reason two projects of identical square footage can take very different paths through a building department.
- A second kitchen is usually the line. A sink and a refrigerator read as a kitchenette; a range and a full hookup read as a dwelling.
- A separate entrance and a lockable separating door reinforce that the space is independent rather than part of the main house.
- Separate metering, a separate address and a separate mailbox make the case even stronger, for better or worse.
- Off-street parking requirements often attach to the second unit and not to an addition.
- Rental registration and inspection rules attach to dwelling units in several communities, Ann Arbor among them.
If your goal is space for family rather than a rentable unit, the attached path is faster, cheaper and permitted almost everywhere. Read our addition permits page for how that review runs, and decide early which of the two you are building, because switching from a suite to a dwelling unit halfway through design means redrawing the plans and restarting the zoning conversation.
Which configuration suits your lot
Lot size, slope, existing structures and the location of your service entrance narrow the options quickly. A quarter acre lot in an older Ann Arbor neighborhood with an alley and a detached garage at the back has an obvious answer. A half acre suburban lot on septic with the drainfield in the rear yard has a very different one, because the buildable area is smaller than the lot map suggests.
- Over an existing or new garage, where the foundation and roof are shared and the height limit allows it.
- Inside a walkout basement, where grade already delivers daylight and a code compliant exit.
- As a rear addition connected by a breezeway, which keeps the unit distinct while sharing utilities.
- As a freestanding cottage at the rear of the lot, which costs the most and delivers the most separation.
- Carved out of an oversized existing addition or wing that is already underused.
What the proposal includes, and what it does not
A detached unit proposal from us carries site work, excavation, foundation, framing, roofing, siding, windows and doors, insulation and air sealing, drywall, flooring, trim and paint, a full bathroom, a kitchen, electrical, plumbing, mechanical, utility trenching, permits and final cleaning. It is line item, so you can see the trench and the panel rather than finding them in an allowance.
Outside the number, typically: a utility meter split, a water or sewer tap fee, a county health permit, appliances beyond those specified, furniture, landscape restoration past rough grading, driveway or parking pad work, and rental registration fees. Ask for those to be named in writing on any proposal you receive. Our estimate process puts them on the page rather than in a footnote.
Utilities, septic and the parts that get missed
A second dwelling puts a second load on systems sized for one house. On municipal water and sewer that is usually a capacity question and a tap fee. On a private well and septic it is a county health review, and it can be the item that stops the project, because a drainfield sized for a three bedroom house may not carry a fourth and fifth bedroom across two structures.
Get that review started early. In Washtenaw County a septic evaluation can add weeks to the front of a schedule, and the answer changes the design rather than the finish schedule. Electrical is the other common surprise. A detached unit with its own range, dryer and heat wants capacity that many 100 amp services do not have, so a service upgrade belongs in the budget from the start rather than as a change order in month three.
How long an ADU project takes
Design and feasibility run six to twelve weeks in most of our communities, longer where a variance is involved. Construction for a detached unit runs five to eight months. A garage or basement conversion runs three to four. Michigan weather sets the front end, since foundation work between December and March costs more and moves slower.
The practical sequence is to start feasibility in winter, permit in early spring and build through the season. Families who call us in June about a detached unit are usually looking at a foundation the following spring. Our addition timeline and design-build process pages show how the phases line up.
Renting it out, and what appraisers do with it
Where ADUs are permitted, long term rental is generally allowed and short term rental generally is not. Ann Arbor requires a certificate of compliance for rental property and prohibits leases under 30 days. Plan for an inspection, and build to pass it rather than hoping to negotiate afterward.
Appraisal is the quieter risk. Lenders following Freddie Mac guidance want a comparable sale that also contains an accessory dwelling unit, and in most of this region those comparable sales barely exist yet. That can affect an appraisal at refinance or resale even when the build is excellent. Talk to your lender before construction rather than at underwriting, and see the addition financing page for how families here structure it.
Build it for who lives there in fifteen years
Most accessory dwelling units in this region get built for one of two reasons: a parent moving closer, or rental income. Both arguments point at the same design decisions. A single level unit with a curbless shower, 36 inch doors and blocking behind the bath walls costs very little more today and stays usable for a much wider range of tenants and family members later.
It also protects the investment. A unit that only works for someone who can climb stairs is a unit with a narrower future, whether you are housing a parent or renting to a stranger. The specifics live on our home accessibility page, and the finish decisions run through the same kitchen and bath teams that handle the rest of our work.
Questions homeowners ask
Will it raise my property taxes? Adding a dwelling unit increases assessed value, and in Michigan improvements are added to taxable value outside the annual cap. The increase is real and modest relative to the build cost, and your assessor can estimate it before you start. The return on an addition page covers how that sits against resale value.
Can we build it as a garage now and finish it later? Often yes, and it can be the smart sequence. Building the shell, the footings and the rough utilities while the equipment is on site costs far less than returning for them. Just make sure the height, setbacks and rough-ins are designed for the finished use from day one.
What if our township says no? Then we design an attached suite instead. In practice that gets most families the outcome they wanted, which is a parent nearby with a private bathroom and a separate door, without a second kitchen and without a second dwelling review. See master suite additions and first floor additions for how those get laid out.
Find out what your lot allows
We start with a feasibility conversation: your address, your zoning district, your lot size, your utilities. That tells you whether an accessory dwelling unit is possible before anyone spends money on design. We build out of 7101 Platt Road in Ypsilanti and work across all six counties. Check out our Portfolio or contact us today. The office line is (734) 540-0347.