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The DFW ADU Feasibility Guide
A backyard home (an ADU — Accessory Dwelling Unit) can house a parent, an adult child, a guest, or bring rental income. But most of the money is lost before the build — on plans for a project that was never going to work. This guide is the homework that stops that, in plain language, from each city's own rules.
The 5 questions to answer before you spend anything
1 · Does my city even allow it?
Not every city permits an independent second home, and the ones that do call it different things — Backyard Cottage, ADU, Guest House, Garage Apartment. Some ban renting it out. Start here, because everything else is moot if the answer is no.
2 · How big can it legally be on MY lot?
Cities cap size by a formula tied to your lot size and your main home's floor area (e.g. "the lesser of 1,000 sq ft or 25% of your home"). The number you can build is rarely the number you imagined — check it before you fall in love with a floor plan.
3 · Will it physically fit — after setbacks and the front yard?
Legal max ≠ what fits. Setbacks, the required distance behind the main house, your driveway, and easements all eat into the buildable area. A big 2-story home on a small lot can pencil out on paper and still have nowhere to put the cottage.
4 · What will the WHOLE thing cost — not just the box?
The unit or shell price — what you'd see quoted online for the structure alone — is the small part. Foundation, utilities, permits, site work, and delivery/crane are the rest. Budget the all-in number, not the sticker.
5 · What do the private rules say?
Your HOA and your deed (recorded restrictive covenants) can be stricter than the city — some prohibit a second unit outright or set a minimum size. The city won't tell you this; it's in your deed records. Confirm it before you buy or build.
Is there a state law that changes any of this?
Short answer: no, not yet. Texas has tried twice to pass a statewide law forcing every city to allow ADUs, and both attempts died before becoming law — House Bill 2789 (2023, 88th Legislature) and Senate Bill 673 / House Bill 2480 (2025, 89th Legislature). Until one of these passes, your city's own ordinance is the only rule that matters — which is exactly why the city-by-city rules below are the real story, not a hypothetical statewide standard. The legislature meets again in January 2027; we'll update this guide if that changes.
One real, federal change did land in 2026: the 21st Century ROAD to Housing Act became law July 11, 2026. It removes the old chassis requirement for certain modular construction, adds ADU-friendly options to FHA-insured home-improvement loans, and directs HUD to reduce financing barriers for modular homes. It doesn't touch city zoning — that's still entirely local — but it's a real, if gradual, easing on the financing side.
Sources: HB 2789 (died, LegiScan) · SB 673 (died, LegiScan) · 21st Century ROAD to Housing Act
Where the money actually goes
The single most common surprise: the home itself is roughly a third of the real cost. Site work — foundation, utility hookups, permits, driveway, delivery and crane set — is the bigger share. A cheap unit on a hard site becomes an expensive project.
Illustrative split, not a quote — the real ratio depends on your site (how far utilities and the nearest pole are, soil, access). A local professional puts a real number on it once you request help.
The rules where you are
Every line below traces to the city's own published ordinance (dated and linked). This is a summary — your exact lot decides the rest.
Plano
Full Plano rules →Plano calls them Backyard Cottages — and thousands of lots qualify.
Lot size: Minimum 6,000 sq ft lot.
The catch most people miss: The owner-occupancy deed restriction: if you're an investor who won't live on the property, a Plano Backyard Cottage is not a rental play. For families housing a parent or adult child, it's ideal.
Source: City of Plano Backyard Cottage Fact Sheet · verified 2026-07-12
McKinney
Full McKinney rules →McKinney publishes its own ADU guide — a city that wants you to succeed.
Eligibility: Single-family residential zoning with room to meet regulations. Planned Development (PD) zones may not allow an ADU — address-specific check required.
The catch most people miss: PD zoning. A large share of newer McKinney neighborhoods sit in Planned Developments with their own rules — the city's general ADU rules may not apply to your address. This is exactly what our report checks first.
Source: Building an ADU in McKinney (official city guide) · verified 2026-07-12
Frisco
Full Frisco rules →Frisco allows guest houses and garage apartments — with one big string attached.
What's allowed: A Guest House (detached) or Garage Apartment (attached to a garage) as an incidental use on a single-family lot, per UDC §4.06.
The catch most people miss: The owner-occupancy-to-rent rule: rental income is only legal while you live in the main house. And Frisco HOAs are pervasive — deed restrictions can be stricter than the city.
Source: Frisco Unified Development Code §4.06 — Accessory Structure Standards · verified 2026-07-12
Denton
Full Denton rules →The CITY of Denton has some of the clearest ADU rules in North Texas. (This covers Denton city limits only — Denton-County suburbs like Flower Mound, Little Elm, and Lewisville each have their own rules.)
ADU size: Up to 800 sq ft or 75% of the main home's size — whichever is GREATER.
The catch most people miss: The design-compatibility rule surprises people: a visible ADU can't look like a shed dropped in the yard. Modular or panelized units can meet it with the right finish choices — worth planning for before you pick a unit.
Source: City of Denton — Accessory Dwelling Unit (ADU) · verified 2026-07-12
Lucas
Full Lucas rules →Lucas allows a backyard cottage on big acreage lots — but it can never be a rental.
Cottage size: Up to 900 sq ft by right. Up to 1,500 sq ft is possible with a Specific Use Permit — City Council approval, not guaranteed.
The catch most people miss: The no-rental rule is absolute. Most of our launch cities restrict rentals to owner-occupied properties — Lucas goes further and bans renting the cottage out at all, ever. This is the right city for a multigenerational family or guest suite, not an income property.
Source: City of Lucas Code of Ordinances — Ch. 14 Zoning, Div. 8 Accessory Buildings · verified 2026-07-18
Parker
Full Parker rules →Parker allows a cottage on acreage — but only for family, guests, or live-in help, never a tenant.
Lot size: At least 1 acre for an attached cottage, or a full 2 acres for a detached one — the strictest lot-size rule of any city we cover.
The catch most people miss: The rental ban is airtight, and the annual SUP renewal — required for BOTH attached and detached units — is unique among our cities — most places make you get one permit once; Parker makes you re-apply every year. This is a fit for a genuinely rural, multigenerational property, not a rental strategy.
Source: City of Parker, TX Code of Ordinances — Ch. 156 Zoning, §156.37(O) · verified 2026-07-18
The common ADU types
The right type depends on your city's rules (some treat attached and detached units differently) and what actually fits your lot — but it helps to know the vocabulary going in.
Detached backyard cottage
Its own stand-alone structure, separate from the main house. Most private, most flexible on layout — the classic "granny flat."
Garage conversion
An existing garage turned into living space. Since the shell already exists, this is often the fastest and least disruptive path.
Above-garage apartment
Living space built over a garage, existing or new. A good option when the lot is too tight for a separate detached structure.
Attached addition
Extends the main house with its own entrance. Usually the simplest to permit, since it's part of the same structure rather than a new one.
The permit path, in order
- Confirm eligibility — city + zoning (watch for Planned-Development overlays and HOAs).
- Size & place it — apply the city's formula and setbacks to your actual lot.
- Plans — a model that fits the number and the rules (in most Texas cities a homeowner can pull their own permits).
- Permit submission — the city's portal, forms, fees, and reviews.
- Build & inspect — licensed trades where the law requires them; final inspection and sign-off.
Checklist before you spend anything
- ☐ Confirm your city's current ordinance — rules shift, and the summaries above are dated; re-verify before you spend money on plans.
- ☐ Check your HOA covenants and deed restrictions at the county clerk — these can be stricter than the city, and the city won't tell you about them.
- ☐ Locate utility lines and easements before you pick a spot on the lot.
- ☐ Get the real all-in number, not just the unit price — site work, permits, and delivery are usually the bigger share.
- ☐ Decide the purpose first — family housing vs. rental income leads to very different city rules (some of our cities ban rentals outright).
- ☐ Set a realistic timeline — permit review and construction both take real months, and the exact number is specific to your city and site.
Frequently asked questions
- Can I rent out my ADU?
- It depends entirely on your city — this varies more than almost anything else in this guide. Frisco: only while you live in the main house. Plano: only to family or a caretaker, never a paying tenant, and the cottage can't be sold separately. Lucas and Parker: never, full stop, no exceptions. McKinney and Denton don't carry that city-wide restriction. Check your specific city in the rules above before you plan around rental income.
- What if my city isn't one of the six above?
- We're expanding based on real demand — every free check run against an uncovered city counts as a vote, and we watch the numbers to decide what to add next. Run the free check for your address; if your city isn't covered yet, you'll be added to that city's waitlist automatically.
- Will an ADU raise my property taxes?
- Almost certainly some — like any permitted addition, it becomes new taxable improvement value once it's finished, and your county appraisal district (not the city) sets that number at your next reassessment. We don't have a reliable one-size-fits-all figure to quote here; ask your county appraisal district or a local tax professional what it means for your specific home.
- Do I need a licensed contractor, or can I do it myself?
- Most Texas cities let a homeowner pull their own building permits on their own property. Some steps — electrical, plumbing, and installing a modular or panelized unit — require licensed trades by law regardless of who pulls the permit. Request help after your free check and we'll connect you with independent licensed professionals.
On rural land instead?
If you own acreage in Collin, Denton, Wise, Parker, Grayson, Hunt, or Fannin County, the questions are different — septic, water, floodplain, and access. See the rural land guide →
Want this answered for YOUR address?
Run the free check for your city's rules and your lot's public records. Want help building it? Request help after your results and our team contacts you within 1 business day.