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Illustration: Eniola Odetunde/Axios

As the pandemic causes many to rethink their housing choices, accessory dwelling units (ADUs) — or granny flats — are seen as viable options for multigenerational housing or singles who want to get out of apartment buildings.

Driving the news: Cottage, a San Francisco-based startup that sells ADUs to homeowners in the Bay Area, has raised $3.5 million in seed funding led by Susa Ventures and Base10.

The big picture: In U.S. cities, about 75% of the land is zoned for single-family housing only, and proposals for multifamily housing often run up against NIMBY-ist opposition.

  • But: A set of new ADU rules went into effect in California in January, making it even easier for homeowners in the state to add these extra units to their properties.
  • Most significantly, homeowners can now add a second ADU to their property, and municipalities are barred from limiting ADUs to less than 800 square feet and 16 feet tall. There are lower parking and setback requirements, faster permitting approval, fewer fees, and the ability to add ADUs to certain multifamily dwellings.
  • Cottage, founded a year ago by Alex Czarnecki, is the latest startup to join the ADU boom. In October, startup Abodu also announced $3.5 million in seed funding.

How it works: Cottage’s pitch to customers is that it offers custom units, takes care of managing much of the process like getting permits, and does it at a lower price than many alternatives, including some prefab options.

  • Cottage says that because it can cut big deals with designers and contractors, it can get lower costs for its customers, to whom it charges a fee for managing the process.
  • After checking out a property and discussing what the client wants, Cottage budgets about one to one-and-half months for the design, about two to three for permitting, and another three to four for construction, says Czarnecki.
  • The units run about $100,000 for an entry-level garage conversion, and $150,000 for a one-bedroom detached backyard unit, though it varies based on customizations.
  • It's currently open to customers in six Bay Area counties, but it plans to soon expand to more regions on the West Coast.

What they're saying: "I'm an only child and I'm trying to be with my parents in their elderly years," Harold, a Cottage customer and Redwood City resident, tells Axios.

  • He and his wife considered options like renting an apartment for his parents or buying them a house, but ultimately, an ADU would provide them a sense of privacy, their own house, and proximity to the family, he adds.

Yes, but: While ADUs can be a solution for some housing needs, they won’t solve them all.

  • "ADUs are like the scooters of housing policy — they're flashy and cute and everyone loves them,” Jenny Schuetz, a fellow with Brookings' Metropolitan Policy Program, told Axios’ Kim Hart earlier this year.
  • “Scooters are good at getting people thinking about other ways to get around, but inherently they don't scale. Even if we put an ADU on every single-family lot in the U.S. — which of course won't happen — we wouldn't solve the problem,” she added.

Go deeper

Updated 1 hour ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Health: Coronavirus may have been in U.S. in December 2019, study finds — Hospital crisis deepens as holiday season nears.
  2. Politics: Bipartisan group of senators unveil $908 billion COVID stimulus proposalFDA chief was called to West Wing to explain why agency hasn't moved faster on vaccine — The words that actually persuade people on the pandemic
  3. Vaccine: Moderna to file for FDA emergency use authorizationVaccinating rural America won't be easy — Being last in the vaccine queue is young people's next big COVID test.
  4. States: Cuomo orders emergency hospital protocols as New York's COVID capacity dwindles.
  5. World: European regulators to assess first COVID-19 vaccine by Dec. 29
  6. 🎧 Podcast: The state of play of the top vaccines.

Bipartisan group of senators unveils $908 billion COVID stimulus proposal

Sens. Joe Manchin (D-W.Va.) and Susan Collins (R-Maine) in the Capitol in 2018. Photo: Tom Williams/CQ Roll Call

A bipartisan group of senators on Tuesday proposed a $908 billion coronavirus stimulus package, in one of the few concrete steps toward COVID relief made by Congress in several months.

Why it matters: Recent data shows that the economic recovery is floundering as coronavirus cases surge and hospitals threaten to be overwhelmed heading into what is likely to be a grim winter.

Inside Patch's new local newsletter platform

Illustration: Annelise Capossela/Axios

Patch, the hyperlocal (and profitable) local digital news company, has built a new software platform called "Patch Labs" that lets local news reporters publish their own newsletters and websites, sources tell Axios.

Why it matters: It follows a growing trend of journalists going solo via newsletters at the national level.