This article is part of MACo’s Policy Deep Dive series, where expert policy analysts explore and explain the top county policy issues of the day. A new article is added each week – read all of MACo’s Policy Deep Dives.
During the 2023 legislative session, the General Assembly passed SB382, creating the Accessory Dwelling Unit Policy Task Force. The Task Force had three charges:
- survey and document a representative sampling of State and local codes, laws, ordinances, and policies regarding the development and operation of accessory dwelling units (ADUs) in areas zoned for single-family residential use, including those codes, laws, ordinances, and policies that address residential growth in these areas;
- study available best practices for streamlining or standardizing the application process for permits necessary to build or operate an ADU;
- make legislative or other policy recommendations, including a list of best practices for local governments in the state, that holistically address (1) the practical issues associated with the development of ADUs on owner-occupied land zoned for single-family residential use and (2) the impacts on local housing markets, neighborhood livability, and other policies and projects related to ADUs.
On May 31st, the Maryland Department of Planning transmitted the final report to the Governor and both chambers of the General Assembly. In this week’s deep dive, we examine the basics of ADUs and the report’s recommendations.
What is an ADU?
SB 382 defines an ADU as,
“..a secondary dwelling unit on the same lot, parcel, or tract as a primary dwelling unit that is constructed:
(1) attached to, or through the conversion of, a portion of the primary dwelling unit;
(2) attached to, or through the full or partial conversion of, an accessory structure located on the same lot, parcel, or tract as the primary dwelling unit; or
(3) as a new building, detached from the primary dwelling unit and any existing accessory structure.”
In layman’s terms, an ADU is an accessory and subordinate use to the primary dwelling and can take various forms. Some ADUs are attached to the primary residence, e.g., a finished basement or an attic, while others are detached structures on the same parcel of land. Detached ADUs are often associated with the growing “tiny homes” trend.
One Big Finding From the Report
The report and previous administration data estimate that Maryland needs approximately 96,000 housing units to rebalance the market and make housing costs more affordable. The task force estimates that ADUs will generate only one or two percent of that figure. Put another way, on the generous end, ADUs will only produce between 1000 and 2000 units.
Six Recommendations:
The task force found consensus around six recommendations. Four recommendations called for some form of legislation: By-Right Approval, Restrictive Covenants, Impact Fees, and Infrastructure & Facilities. The other two recommendations called for additional resources and data: Parking Requirements, Lot Requirements,
Legislative Recommendations
By-Right Approval—The state should pursue legislation which would require the permitting of one ADU as a by-right use in most areas of Maryland whose zoning permits single-family residential uses.
If implemented, this recommendation will likely impact county governments. By-right approvals are primarily ministerial and do not require review by a board or hearing examiner. Under this recommendation, counties retain authority to regulate many aspects of ADUs, but their approval would be determined administratively. Applicants must still submit all necessary information, meet all applicable standards, and receive local approval before proceeding.
Restrictive Covenants—The state should pursue legislation that would prohibit new and existing covenants for housing developments from barring or unreasonably restricting ADUs.
If implemented, this recommendation will likely have a minimal impact on county governments. Restrictive covenants are traditionally private agreements that limit what property owners can do on their private property. Some forms of restrictive covenants, primarily those based on restricting protected classes from owning a property, have already been rendered unenforceable. The task force recommends legislation to make ADU restrictions in restrictive covenants unenforceable. The report highlights several significant questions about the political viability of this policy.
Impact Fees — The state should pursue legislation that limits impact fees that would unduly hinder the affordability of ADUs. Further guidance and resources are needed to help Maryland jurisdictions prevent impact fees from presenting an unreasonable barrier to ADU development and affordability.
If implemented, this recommendation will impact county governments. Impact fees are assessed on development to fund the growth of critical infrastructure. In Maryland, counties are required to finance and operate nearly all crucial infrastructure in the state, in addition to funding the state’s K-12 education system. Without these fees as a tool, counties would be left with limited options to meet many state-mandated obligations.
The recommendation references the term “unreasonable” several times but lacks specific details, likely due to the issue’s nuances. The task force did recognize in their findings that each jurisdiction is highly varied and stressed that any legislation on impact fees must allow for local flexibility.
Infrastructure & Facilities—The state should pursue legislation that would prohibit jurisdictions from requiring an ADU developer to install new and/or separate water and sewer lines to the unit.
If implemented, this recommendation will impact county governments. This recommendation mainly focused on legislation prohibiting a county from requiring an ADU to have separate water and sewer connections. The task force attempted to account for the state’s varied landscapes and underscored that, in many cases, separate connections are the only viable way to get service to the unit. The recommendation also called for additional research into whether ADUs impact school capacity. Legislating on this issue may be difficult as certain water and sewer considerations are determined either by the Maryland Department of Environment or by the capacities of local infrastructure.
Non-Legislative Recommendations
Parking Requirements – The state should not pursue legislation governing local parking requirements for ADU approval. Rather, further guidance and resources are needed to help Maryland jurisdictions develop ordinances in which parking requirements do not present an unreasonable barrier to ADU development.
Lot Requirements – The state should not pursue legislation governing local lot requirements for ADU approval. Rather, further guidance and resources are needed to help Maryland jurisdictions develop ordinances in which lot requirements do not present an unreasonable barrier to ADU development.
Both the parking and lot requirements recommendations call for additional study and resources to assist county governments in developing more innovative policies around these issues. Both areas are nuanced, as conditions in communities are highly variable. The report outlines several considerations and potential best practices while also spotlighting where further research is necessary.
Looking Ahead
With the release of this report, it is almost certain that some form of ADU legislation will be introduced during the 2025 legislative session. One major challenge for any bill would be to find a balance between the nuances the task force emphasized throughout the report. Counties look forward to continuing the dialogue to develop better policies while balancing highly localized issues.
