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Get ADU QuoteOr call: (323) 591-3717In September 2023, the Phoenix City Council made a landmark decision: it voted 6–3 to allow accessory dwelling units (ADUs) across most residential areas citywide. The move positioned Arizona’s capital as the largest city in the state—and one of the largest in the country—to embrace gentle density via ADU reform.
Often known as “granny flats,” “casitas,” or backyard homes, ADUs are secondary residential units located on the same lot as a primary residence. These small homes are increasingly being seen as a powerful tool for addressing housing shortages, especially in cities like Phoenix where a rapid influx of residents and constrained supply have driven housing prices to record highs.
But Phoenix's embrace of ADUs is not just about affordability—it’s also about climate, aging in place, and redefining the form and function of suburban neighborhoods in a city long shaped by sprawl.
Phoenix is the fastest-growing large city in America, gaining more than 160,000 residents between 2010 and 2020, and tens of thousands more since. Yet, housing supply hasn’t kept pace. Rents rose more than 70% in the past decade, with many low- and moderate-income families getting priced out of neighborhoods they’ve long called home.
Statewide, Arizona’s housing deficit is estimated to be over 270,000 units, according to the Arizona Department of Housing. This gap has worsened post-pandemic, as migration from other states accelerates and construction costs remain high. For many local leaders, allowing ADUs became a logical—and overdue—step toward unlocking underused residential land.
The new ADU ordinance removes previous restrictions that largely prohibited secondary units on most residential lots. Here's what Phoenix now allows:
Importantly, owner-occupancy requirements were dropped—meaning property owners can rent out both the main house and the ADU without living onsite. Short-term rentals (like Airbnbs) are prohibited in ADUs unless the owner occupies the main home, a compromise intended to avoid undermining housing goals.
Phoenix’s move didn’t come out of nowhere. In fact, the city had allowed “guest quarters” and “accessory living quarters” in certain cases, but these came with limits—they couldn’t have full kitchens or be rented separately. For decades, that limited the practical use of ADUs.
In 2020, Mayor Kate Gallego and the City Council began studying how to make the permitting process for accessory dwellings more flexible. Housing advocates, planners, and climate resilience experts backed the reforms, arguing that modest density was both necessary and inevitable.
Pushback came from some neighborhood associations, who feared parking shortages and changes to neighborhood character. But with support from younger residents, advocacy groups like Arizona Housing Coalition, and planning staff, the reforms passed after months of community meetings.
Phoenix is a unique city when it comes to land use. With no natural boundaries like oceans or rivers, the city has historically solved housing problems by building outward—endless subdivisions on the urban fringe. But this pattern has contributed to car dependency, rising infrastructure costs, and environmental stress.
ADUs offer a different path. By allowing more people to live in existing neighborhoods without fundamentally changing their character, Phoenix is now testing whether infill growth can take pressure off its sprawling edges.
Here are four key ways ADUs could reshape Phoenix:
ADUs are often built by homeowners using private financing. That makes them a rare form of unsubsidized, naturally affordable housing—smaller, more modest, and accessible to renters priced out of full-sized homes. Some local officials hope ADUs can relieve pressure on the limited supply of subsidized housing.
In Phoenix, where Latino and Indigenous communities often live in multigenerational households, ADUs allow families to live close—but not too close. A backyard home can house aging parents, adult children, or extended family with dignity and independence.
By encouraging backyard units instead of far-flung subdivisions, Phoenix reduces the heat island effect, shortens commutes, and supports infrastructure efficiency. Building in already urbanized areas is also more water-efficient—a growing concern in a desert city.
With rising property taxes, many older homeowners struggle to stay in their homes. ADUs give them a new option: build a small rental to generate passive income or downsize into the ADU and rent out the main house.
As of early 2025, Phoenix is still in the early stages of ADU adoption. City officials say they’re working to streamline permitting and create design templates to help homeowners navigate the process.
Some architects and builders have already reported a surge in inquiries, particularly from midtown and central Phoenix neighborhoods with alley access and larger lots. However, barriers remain:
The city is expected to release an ADU builder’s guide and offer permit fee waivers for low-income homeowners. Nonprofits are also stepping in to provide design and financing support.
Phoenix joins a growing list of Sun Belt cities rethinking their zoning laws. Tucson legalized ADUs in 2021. Austin and Dallas are gradually expanding ADU rights. But few have taken as bold a step as Phoenix by eliminating owner-occupancy and parking minimums outright.
Compared to cities like Los Angeles or Portland, Phoenix still has relatively low ADU production—but that may change quickly as word spreads and more residents explore what’s possible in their backyards.
ADUs won’t solve Phoenix’s housing crisis alone, but they are a critical piece of the puzzle. As city leaders look to update their general plan and respond to state-level housing pressure, ADUs are likely to remain a central strategy.
The success of Phoenix’s ADU experiment will depend on implementation: streamlining permits, offering financial support, and ensuring equity in who can build and benefit from these units.
But if done well, backyard homes could quietly reshape how the city grows—not through skyscrapers or subdivisions, but through casitas, cottages, and a new vision of neighborhood living.
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