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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

Is there a state law that changes any of this?

Short answer: no statewide ADU mandate, not yet. Texas has tried twice to pass a 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 those passes, your city's ordinance is the local zoning rule that governs whether an ADU is allowed — but it is not the only rule that matters. State and federal law, recorded deed restrictions, and HOA covenants can all be stricter, or can change how a unit is financed or classified. The city-by-city rules below are the zoning 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 (Public Law 119-101) became law July 11, 2026. Title III does three different things, and they are easy to mix up. §301 amends the federal definition of a manufactured home (HUD-code housing) so it may be built "with or without a permanent chassis" — that is not modular construction. §302 is a separate Modular Housing Production Act: HUD must review FHA construction-financing barriers for factory-built modular homes (built to local building codes, not the HUD code). §303 adds construction of accessory dwelling units as an eligible use of FHA Title I property-improvement loans. None of this changes city zoning — that's still local — but it is a real, if gradual, easing on the financing side.

Sources: HB 2789 (died, LegiScan) · SB 673 (died, LegiScan) · Public Law 119-101 §§301–303 (govinfo)

Where the money actually goes

The single most common surprise: the unit or shell price — the number quoted for the structure itself — is only part of the real cost. Foundation, utility hookups, permits, driveway, delivery and crane set are the rest, and on a hard site they can exceed the unit. We don't publish a universal split; a dated example budget needs real local quotes. A local professional puts a number on your address 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.

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.

The permit path, in order

1. Confirm eligibility — city + zoning (watch for Planned-Development overlays and HOAs).
2. Size & place it — apply the city's formula and setbacks to your actual lot.
3. Plans — a model that fits the number and the rules (in most Texas cities a homeowner can pull their own permits).
4. Permit submission — the city's portal, forms, fees, and reviews.
5. 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: the city's fact sheet lists long-term renting (the cottage, or the main house while you live in the cottage) as a benefit, and there is no owner-occupancy rule; the cottage cannot be sold separately, and short-term rentals (stays under 30 consecutive days) are a separate, tighter rule. Lucas and Parker: never, full stop, no exceptions. McKinney and Denton don't carry a city-wide rental ban. 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 local builders, contractors and licensed professionals, as applicable.