The 4 Types of ADUs You Can Build in Massachusetts (and What They Cost)

Massachusetts homeowners now have more options than ever when it comes to adding Accessory Dwelling Units — or ADUs — to their properties. Thanks to the Affordable Homes Act, effective February 2025, ADUs are now allowed by right on any residentially zoned property, including multifamily homes.

This is one of the most significant housing reforms in recent Massachusetts history. To date, there have already been over 550 ADU permit applications statewide, showing that homeowners and investors alike are taking advantage of the opportunity.

If you’re considering an ADU, here’s an overview of the four main ways to create one in Massachusetts — including costs, timelines, and what to watch out for.

1. Interior Conversions

An interior conversion involves turning part of your existing home into a self-contained apartment. It’s the most cost-effective ADU option since it uses your existing structure and utilities.

Homes with finished basements, split-level ranches, or spaces above attached garages are great candidates. In many cases, especially older homes, an “in-law apartment” may already exist — sometimes all you need is to apply for a permit and update the space to code.

Costs & ROI:

• Typically the least expensive type of ADU to create.

• A one-bedroom or studio ADU in Greater Boston can rent for $2,000–$2,500 per month, often enough to significantly offset a mortgage.

Who it’s best for:

• New homeowners looking to supplement income.

• Empty nesters who want to downsize without selling their home.

Some homeowners even move into the ADU themselves and rent out the main house — a smart strategy in today’s high-interest-rate environment, where selling often means giving up a 3% mortgage for one at 7% or higher.

Key Consideration:
If you’re adding an ADU to a two- or three-family building, know that adding a third unit triggers sprinkler requirements under the Massachusetts State Building Code. Installing a sprinkler system can add $30,000–$50,000 to project costs.

2. Exterior ADU Conversions

An exterior conversion transforms an existing detached structure—most often a garage—into a standalone ADU.

This option is especially attractive for investors and multifamily owners, since many older properties in the Greater Boston area already have garages or carriage houses that aren’t being fully used.

Benefits:

• No new setback requirements for existing nonconforming structures under the Affordable Homes Act. That means you can convert an older garage even if it sits right on the property line.

• Sprinklers usually not required, since the ADU is a detached structure. (Always confirm with your local building department.)

Costs & ROI:

• Average cost: $250,000–$300,000.

• In urban areas like Somerville, Cambridge, or Dorchester, a 900 sq. ft., 2-bedroom ADU can rent for $3,000+/month.

• Typical ROI: 10–15%, plus long-term equity gains.

Detached ADUs also tend to add more value per square foot than interior units, since they function like independent homes. Appraisers are still catching up to this new product type, but as more of these sell, we’ll likely see stronger valuation trends.

3. New Build ADUs

A new build ADU is ground-up construction — a full additional structure built from scratch.

This is the most expensive and time-intensive option, but it offers maximum flexibility in terms of design, layout, and placement on your lot.

Timeline:

• Typically 6–9 months from design to completion, depending on complexity and municipal permitting speed.

Regulations:

• Must meet local setbacks and lot coverage limits (since there’s no pre-existing structure).

• Must comply with the Massachusetts Stretch or Specialized Energy Code, which means energy-efficient design, heat pumps, and potentially all-electric systems.

Costs:

• Generally $350,000–$400,000, depending on site work, excavation, and utility connections.

Upside:
A brand-new 1–2 bedroom ADU in high-demand markets like Arlington or Brookline can rent for $3,000+ per month, and adds significant resale value thanks to modern design and energy efficiency.

4. Modular (Pre-Fabricated) ADUs

Modular ADUs are built in a factory, shipped to your property, and installed on-site — usually by crane. These have become popular in states like California and Oregon, and are now starting to appear across Massachusetts.

Advantages:

• Lower cost: 1BR modular ADUs typically cost around $250,000, while 2BR models with site work included are closer to $300,000.

• Faster build time: Projects can be completed in roughly half the time of a traditional build.

• Simplified inspections: Much of the code compliance is handled in-factory, reducing on-site permitting complexity.

Challenges:

• Lot size & access: Modular units are often single-story and require space for both installation and crane access.

• Limited local suppliers: Most modular ADUs in Massachusetts are still shipped from out of state, which adds transport costs.

Despite those challenges, modular ADUs are likely to become one of the most scalable solutions for homeowners and investors as demand grows under the Affordable Homes Act.

Which ADU Type Is Right for You?

Choosing the right ADU depends on your budget, property layout, and investment goals.

• Interior conversions: Lowest cost, fastest to complete.

• Exterior conversions: Best ROI and flexibility.

• New builds: Highest design control, strongest long-term appreciation.

• Modular ADUs: Fastest and most turnkey option — ideal for straightforward lots.

If you’re interested in adding an ADU to your property, my company Your MA ADU can help you navigate the process — from design to permitting to construction.

Schedule your free site visit today at YourMAADU.com.